Northwest Arkansas Democrat-Gazette
Parks board eyes increasing fees
FAYETTEVILLE — The city could have more money to build parks by increasing a fee for developers of new properties.
The Parks and Recreation Advisory Board on Monday will review the one-time fee builders incur with new residential developments. The city uses the revenue from parkland dedication fees to buy land, build amenities and put money down toward grants and partnerships.
Any developer of 24 or more residential units, whether single- or multi-family, has two options under city code. Either he can dedicate a portion of the land for a park, or pay a fee instead.
The city’s Parks Department uses the National Recreation and Park Association standard when figuring how much park land it needs to serve residents. The
standard is 10 acres per 1,000 residents. It uses that to figure how much land a developer should dedicate, should he choose that option.
The city also has a formula for calculating the fee. The formula uses the land value, acres per person and number of people living in a unit. The rate is $920 per unit for a single-family development and $560 per unit for multi-family.
For example, if a developer builds 25 homes without dedicating a portion of the land for a park, he would owe the city $23,000. A developer building a 200-unit apartment complex with no park land would owe $112,000.
The parkland dedication ordinance has been on the city books since 1981. One of the parks board’s responsibilities is reviewing the formula and updating the numbers if necessary. The numbers making the rate have stayed the same since 2013.
Shana Kasparek, executive officer of the Northwest Arkansas Home Builders Association, said it makes sense an increase may be necessary after five years of staying the same. However, too many fees and regulations can dissuade development, she said.
“If they could come up with some staggered fee structure over the next few years, that would be something I believe our local homebuilders would accept more readily,” Kasparek said.
THE FORMULA
The ordinance has resulted in about 300 acres of donated land and nearly $7.3 million in revenue generated since its inception, Parks Director Connie Edmonston said. Parks that have been created include David Lashley, Rodney Ryan and Doc Mashburn, as well as a number of trails and other amenities.
For instance, a rowing dock is under construction at the Lake Fayetteville marina. The project was made possible through an $8,000 Rotary Club donation, $5,000 from the Rowing Club of Northwest Arkansas and $25,000 from the parkland fund for the northeast parks district.
“The impact has been extremely significant,” Edmonston said.
Each quadrant of the city has its own parkland dedication fund. College Avenue serves as the east-west divider and Wedington Avenue/ North Street/Mission Boulevard divides the city northsouth.
The City Council on Tuesday raised the time limit with which the money has to be spent in each quadrant from three years to five.
Department staff gave the parks board a presentation on the fees last month. Land value is higher than the amount the city uses, and more people are living per unit in multi-family housing, according to staff.
The formula is based on a land value of $40,000 per acre. Using information from the Washington County Assessor’s Office for land sales in the city from January 2016 to December 2017, the number should be $57,214.
However, staff trimmed the most extreme top and bottom land sales in their recommendation, which lowers the figure to $54,462.
Additionally, staff at the Northwest Arkansas Regional Planning Commission analyzed U.S. Census data to come up with updated occupant rates. The current formula has 2.32 people per single-family unit and 1.39 people per multifamily unit.
The updated numbers have single-family staying about the same at 2.31, but multifamily increases about 45 percent at 2.02 occupants per unit.
The new fee for single-family developments would rise from $920 per unit to $1,258 per unit. The rate for multifamily would go up from $560 per unit to $1,100 per unit.
THE DECISION
Nothing is set in stone. The parks board will discuss options with staff and take public comment during Monday’s meeting. The City Council will have final say on any changes.
One option might be to hire a consultant who would recommend rate changes periodically. Another would be to stagger the increase.
Parks staff recommends implementing the fee increase over two years — half the amount next year, the rest in 2020.
Ted Jack, park planning superintendent, said the department wants to avoid having a developer who started his project with the lower number in mind get caught with a sharp increase.
“We are government, but in my mind, we also have a customer-service type fairness way to operate,” he said. “It’s not just ‘Well, here are the numbers. Sorry.’”
Coincidentally, members of the development community have been engaged with planning commissioners over proposed changes to design standards for subdivisions. Several spoke during an October meeting, saying they worried imposing new regulations would increase the cost of building, effectively increasing the price to homeowners.
The first workshop session on the topic was held Tuesday. The plan is to bounce ideas around over several months and eventually write an ordinance.
Aaron Wirth with Cobblestone Homes questioned the $50,000-plus land value that could potentially be used in the formula. Any increase in fees has a multiplier effect passed on to the home price, he said. Developers don’t build $50,000 houses on $50,000 lots, he used as an example.
Raising prices eliminates potential buyers, Wirth said.
“There’s a value to the parks in Fayetteville. I have no doubt there’s value,” he said. “The question is: what is that number? That’s a hard thing to pin down.”
THE APPROACH
Other cities in Northwest Arkansas approach park development differently. For example, Springdale and Rogers have no parkland fee or dedication requirements.
Bentonville takes a similar-but-different approach to Fayetteville. Bentonville has impact fees applied across city departments. The money for the park portion is put toward community and neighborhood park development, recreational improvements and trails.
Effectively, it’s the same system but with a different name, Bentonville Parks Director David Wright said. The difference, however, is Bentonville doesn’t have a land-donation option — just the fee.
Also, the parks impact fee is wrapped up in the impact fees for police, fire and the library. In 2016, Bentonville’s City Council adjusted its impact fees based on the recommendations of a consultant. The total amount for all impact fees, $3,234, was lower than what it was before. The city had completed a number of projects, and water and sewer was taken out of the equation, leaving more for other areas.
The portion for parks went up. The fee for single-family became $2,192 per unit and for multifamily it became $1,381 per unit. The rates had been $791 for single-family and $568 for multifamily, according to city documents.
“We didn’t hear a lot of pushback from the development community, and I’ll tell you why — the overall impact fee went down,” Wright said.
Dana Smith, parks board member, said it makes sense to increase the fee in Fayetteville given land market value and Census data.
After all, having an abundance of parks is part of what the makes land value what it is, she said.
“Any change like this is going to have an impact. But I think the value of this is so great,” Smith said. “At the rate we are developing right now in Fayetteville, I think it’s important the numbers we use — the variables in that equation — reflect the growth that’s happening in the city.”
“There’s a value to the parks in Fayetteville. I have no doubt there’s value,” he said. “The question is: what is that number? That’s a hard thing to pin down.”
— Aaron Wirth with Cobblestone Homes