HomeMy WebLinkAbout18 - In-Lieu Park Dedication Fee AdjustmentCITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
COUNCIL Gr, 'A
NU. l6 -
3113t o-7
Agenda Item No. 21
February 27, 2007
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Planning Department
Brandon Nichols, Associate Planner
(949) 644 -3234, bnichols(a)city.newoort- beach.ca.us
SUBJECT: In -Lieu Park Dedication Fee Adjustment
Appraisal of Eastbluff and Bob Henry Park
INITIATED BY: City of Newport Beach
ISSUE
Should the City Council increase the City's In -Lieu Park Dedication Fee by adjusting the
fair market land value per acre used in the fee calculation?
RECOMMENDATION
Adopt the attached City Council Resolution adjusting the fair market land value per acre
to be used in assessing In -Lieu Park Dedication Fees.
DISCUSSION
Background
Chapter 19.52 of the Newport Beach Subdivision Code (the Subdivision Code)
establishes parkland dedication and In -Lieu Park Dedication Fee (in -Lieu Fee)
requirements for new residential subdivisions. Per the Subdivision Code, when a fee is
required to be paid in -lieu of land dedication, the fee is computed by multiplying the
acreage of land, which would otherwise have been required to be dedicated, times the
fair market value per acre. Fair market value per acre is to be established by periodic
appraisal prepared by the City (Section 19.52.070). Periodic appraisal ensures that the
In -Lieu Fee remains current with property appreciation. The City Council last adjusted
the fair market land value used to calculate In -Lieu Fees in .1988. The adjustment
established the current fee of $6,894.37 per residential unit.
In -Lieu Park Dedication Fee Adjustment
February 27, 2007
Page 2
Assessing and Calculating Fees In Lieu of Dedication
California State Statute 66477 (the Quimby Act) establishes the methodology for
assessing and calculating park land dedication and in -lieu fee requirements. Consistent
with the Quimby Act, the Subdivision Code requires park dedication, and /or payment of
In -Lieu Fees, for residential subdivisions resulting in additional dwelling units. In -Lieu
Fees are assessed as a condition to the approval of tentative map or parcel map. In-
Lieu Fees are used to help fund the City's acquisition or rehabilitation of parkland to
meet the park and recreational demands of new residential development.
In accordance with the Quimby Act, if a proposed subdivision contains fifty parcels or
less, the subdvider may pay an In -Lieu Fee equal to the value of parkland that would
otherwise be required for dedication. If a proposed subdivision contains fifty parcels or
more, the decision making body shall determine whether land dedication, in -lieu fee, or
a combination of the two shall be required.
Pursuant to the Subdivision Code, the following factors are to be used in the
computation of parkland dedication and fee requirements:
The City's established parkland dedication ratio of five (5) acres of parkland per
1000 people expected to reside in a subdivision (or .005 acres per person)
The average number of persons per household in the City based on data from
the most recent available federal or state census (currently 2.09 persons per unit)
The per -acre value of land in the City as established by periodic appraisal
Using the above factors, the In -Lieu Fee per new residential unit can be computed as
follows:
.005 acres per person X 2.09 persons per unit = .01045 acres of park land dedication per unit
.01045 acres x fair market value per acre = Required In -Lieu Fee per unit
Appraisal to Determine Fair Market Land Value
Since 1979, appraisal of the Eastbluff Park Site has been used to establish the fair
market value per acre to be used in computing In -Lieu Fees. Subsequent appraisals of
the Eastbluff Park Site resulted in three prior adjustments to the In -Lieu Fee, the last
being in 1988. The results of Eastbluff Park appraisals are summarized in Attachment
C.
In 2006, the City retained the firm of Reinhart- Fontes Associates Inc. to provide an ~
appraisal of the Eastbluff Park site and a second site, Bob Henry Park. Two sites were ,__,.
In -Lieu Park Dedication Fee Adjustment
February 27, 2007
Page 3
appraised to provide a more accurate representation of average land value in the City.
Consistent with previous appraisals, the value of each property was assessed assuming
the sites had the following characteristics:
• Residential Zoning
• Density of 10 units per acre
• Utilities available
• Sites assumed to be vacant and unimproved
• Sites assumed to have relatively level topography
• Sites assumed to have no view potential
Since the fee applies only to residential subdivisions, residential use of the properties is
assumed in order to establish the fair market value of vacant, residentially zoned land in
the City. The table below contains the results of both appraisals and the adjusted In-
Lieu Fee if the appraisal results are used to establish fair market land value (calculated
using the methodology outlined in the previous section of this report).
Park
11111111W.
RESULTS, NOVEMBER 2006
$31
For comparison, a table summarizing In -Lieu Fees for other Orange County cities is
provided in Attachment C.
Certification of Appraisal Results
If the City Council concurs with the results of the current appraisals, a resolution has
been prepared establishing a fair market land value of $3,250,000 per acre for use in
the calculation of In -Lieu Fees. In accordance with State Law, the updated fee would
not go into effect until 60 days after City Council approval.
Environmental Review
This action has been reviewed and it has been determined that the proposed action is not
a project subject to review under the California Environmental Quality Act (CEQA Section
15378 (bx4))
Public Notice
Notice of this hearing was published in the Daily Pilot a minimum of 10 days in advance
,, t of the hearing consistent with the requirements of the Municipal Code. Notice was also
In -Lieu Park Dedication Fee Adjustment
February 27, 2007
Page 4
mailed to interested parties who submitted written requests for notification regarding
matters relating to fee increases. Courtesy notices were also sent via U.S. Mail and e-
mail to parties staff believed would have an interest in the potential fee adjustment.
Additionally, the item appeared on the agenda for this meeting, which was posted at
City Hall and on the City website.
Prepared by:
5ra ndoiT Nichols, Associate Planner
Attachments:
Submitted by:
Sharon ZWood, Assistant C' Manager
A. Draft Resolution
B. Chapter 19.52 of the Subdivision Code (Park Dedications and Fees)
C. Tables (East Bluff Appraisal Results, Comparative Park In -Lieu Fees)
(T. Attachment A
Draft Resolution
r
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT
BEACH ESTABLISHING THE FAIR MARKET VALUE PER ACRE TO
BE USED IN ASSESSING IN -LIEU PARK DEDICATION FEES
PURSUANT TO SECTION 19.52.070 OF THE NEWPORT BEACH
MUNICIPAL CODE AND RESCINDING RESOLUTION NO. 88-12
WHEREAS, Chapter 19.52 of the Newport Beach Municipal Code establishes a
parkland dedication standard of five (5) acres per thousand population expected to
reside in new residential subdivisions; and
WHEREAS, in subdivisions containing 50 lots or less, the subdivider may pay
an in -lieu fee equal to the value of land required for dedication; and
WHEREAS, in subdivisions containing more than 50 lots, the decision making
body may require land dedication, in -lieu fee, or a combination of the two; and
WHEREAS, Chapter 19.52 establishes that when a fee is required to be paid in-
lieu of land dedication, that fee shall be equal to the acreage of land which would
otherwise be required to be dedicated, multiplied by the fair market value per acre as
established by periodic appraisal prepared by the City; and
WHEREAS, the City has retained a qualified appraiser to update and establish
the fair market value per acre; and
WHEREAS, the results of the appraisals of two park sites in the City have
established an average value of $3,250,000 as the fair market value per acre; and
WHEREAS, said fair market value would establish an In -Lieu Park Dedication
Fee of $33,962.50 per new residential unit created by an approved subdivision; and
WHEREAS, Resolution 88 -12 previously established the fair market value per
acre to be used in computing In -Lieu Park Dedication Fees, and said Resolution is to be
hereby superseded and rescinded; and
WHEREAS, the City Council has reviewed the appraisal reports and determines
the average fair market cost per acre to be appropriate,
NOW, THEREFORE, the City Council of the City of Newport Beach resolves as
follows:
�rv1,
r.
City of Newport Beach
City Council Resolution No. _
Pave 2 of 2
Section 1: To establish the amount of $3,250,000 as the fair market value per acre
to be used in assessing In -Lieu Park Dedication Fees pursuant to Chapter 19.52 of the
Newport Beach Municipal Code.
Section 2: To keep current with property appreciation, said fair market value per
acre shall be reviewed and adjusted, if necessary, at least every three (3) years from the
date of adoption of this Resolution.
Passed and adogted by the City Council of the City of Newport Beach at the regular
meeting held on the 27 day of February, 2007
MAYOR
ATTEST:
CITY CLERK
AYES, COUNCIL MEMBERS
NOES, COUNCIL MEMBERS
ABSENT COUNCIL MEMBERS
iii
Attachment B
Chapter 19.52 of the
Subdivision Code (Park
Dedications and Fees)
CHAPTER 19.52
PARK DEDICATIONS AND FEES
Sections:
19.52.010
Purpose and Intent
19.52.020
Applicability
19.52.030
Use of Park Dedications and Fees
19.52.040
Parkland Standard
19.52.050
Determination of Land or Fee
19.52.060
Dedication of Land
19.52.070
Fee in Lieu of Dedication
19.52.080
Credit for Private Recreation Facilities
19.52.090
Timing of Dedications and Fees
19.52.010 Purpose and Intent (66477)
This Chapter is intended to provide for the dedication of land, the payment of fees in lieu
thereof, or a combination of both, for park or recreational purposes in conjunction with
the approval of residential development. These provisions are in accordance with the
Recreation and Open Space Element of the General Plan and with Section 66477 of the
Subdivision Map Act (known as the "Quimby Act').
19.52.020 Applicability (66477)
A. Applicability. The provisions of this Chapter shall apply to all residential
subdivisions except those exempted per Paragraph B of this Section.
B. Exemptions. The provisions of this Chapter shall not apply to
nonresidential subdivisions, nor to condominium projects or stock
cooperatives which consist of the subdivision of air space in an existing
apartment building which, at the time of tentative map filing, is five or
more years old when no new dwelling units are added.
19.52.030 Use of Park Dedications and Fees (66477)
A. Rules for Use of Dedication and Fees. The following rules shall apply to
the use of dedicated park land and in -lieu fees per Section 66477 of the
Subdivision Map Act:
A
1. The land, fees, or combination thereof shall be used only for the
purpose of developing new or rehabilitating existing neighborhood
or community park or recreational facilities to serve the
subdivision.
2. The park and recreational facilities provided for by the land
dedications and/or in -lieu fees are in accordance with the policies
and standards contained in the City's General Plan Recreation and
Open Space Element.
3. The amount and location of land to be dedicated or the fees to be
paid shall bear a reasonable relationship to the use of the park and
recreational facilities by the future inhabitants of the subdivision.
4. The City shall develop and maintain a schedule specifying how,
when, and where it will use the land or fees, or both, to develop
park or recreational facilities to serve the residents of the
subdivision. This schedule is provided for in this Chapter and in
the adopted City Council policy entitled "Park Fee Policy".
B. Credit for Improvements. If a subdivider provides park and recreational
improvements to dedicated parkland, the value of the improvements,
together with any equipment located thereon, shall be a credit against the
payment of fees, or dedication of land, required by this Chapter.
19.52.040 Parkland Standard (66477)
Per figures from the 2000 federal census and the City's Recreation and Open Space
Element, the amount of neighborhood and community park acreage in the City is 5.1
acres per 1,000 population. Per Section 66477 of the Subdivision Map Act, the City may
use its existing parkland ratio, based on data from the most recent available federal
census, as its park dedication standard for new subdivisions, provided required
dedications do not exceed 5 acres per thousand persons residing within a subdivision.
Therefore, the City's park dedication standard shall be 5 acres per thousand population.
19.52.050 Determination of Land or Fee
The tentative map decision - making body shall determine whether land dedication, in -lieu
fee, or a combination of the two shall be required in conjunction with its approval of a
tentative map in accordance with the following criteria.
A. Land Dedication. The following criteria shall be used in making a
determination to require land dedication:
lb
1. General Plan. Whether a park site is shown within the subdivision
in the General Plan's Recreation and Open Space Element.
2. Accessibility. Whether the proposed site has access to a public
street.
3. Topography. Whether the terrain of the proposed site is suitable for
the intended park development.
B. In -Lieu Fee. If no park or recreational facility has been designated in the
General Plan's Recreation and Open Space Element to be located within
the proposed subdivision, or if the proposed subdivision contains 50 lots
or less, the subdivider shall pay a fee in lieu of land dedication, except that
when a condominium project, stock cooperative, or community apartment
project exceeds 50 dwelling units, dedication of land may be required
notwithstanding that the number of parcels may be less than 50. The in-
lieu fee shall be equal to the value of the amount of land prescribed for
dedication pursuant to Section 19.52.060. The fee amount shall be
determined in accordance with Section 19.52.070.
C. Both Dedication and Fee. In subdivisions of more than 50 parcels, the
tentative map decision- making body may require the subdivider to both
dedicate land and pay a fee in lieu thereof in accordance with the
following criteria:
When a park site shown within a proposed subdivision is smaller
in area than the acreage which is required for dedication pursuant
to Section 19.52.060, such park site shall be dedicated for park
purposes and a fee, computed pursuant to Section 19.52.070, shall
be paid for the remaining acreage which would have been required
to be dedicated.
2. When a major part of a park or recreational site has already been
acquired by the City and only a small portion of land is needed
from the subdivision to complete the site, such remaining portion
shall be dedicated and a fee, computed pursuant to Section
19.52.070, shall be paid for the remaining acreage which would
have been required to be dedicated.
Any in -lieu fees paid per the preceding criteria shall be used for the
improvement of the park and recreational site dedicated by the subdivider
or for the improvement of other local parks and recreational facilities
serving the subdivision.
"t 19.52.060 Dedication of Land (66477)
Where a park or recreational facility has been designated in the General Plan's
Recreation and Open Space Element to be located in whole or in part within the proposed
subdivision, the tentative map decision - making body may require the subdivider to
dedicate land for the park per the parkland dedication standard of Section 19.52.040. The
amount of land to be dedicated shall be computed as follows:
A. Persons per Dwelling Unit. The City shall determine the average number
of persons per dwelling unit for each dwelling unit type, based upon the
average household size for that dwelling unit type (e.g. single family
detached, apartment, etc.). Data from the most recent available federal or
state census shall be used to make this computation unless the City
determines that there is substantial evidence to support a finding that a
different household size is appropriate for some or all of the dwelling units
proposed;
B. Computation of Dedication Acreage. The number of persons to occupy the
new subdivision shall be computed by multiplying the average number of
persons per dwelling unit by the number of dwelling units. The parkland
to be dedicated shall then be determined by multiplying the number of
persons by 5 acJ1,000 persons. (For example, if the new subdivision will
house 500 persons: 500 x 511000 = 2.5 acres of land to be dedicated).
19.52.070 Fee in Lieu of Dedication (66477)
A. Computation of Fee. Where a fee is required to be paid in lieu of land
dedication, such fee shall be computed by multiplying the acreage of land
which would otherwise have been required to be dedicated pursuant to
Section 19.52.050 times the fair market value per acre, as established by
periodic appraisal prepared by the City.
B. Use of Money. The in -lieu fees collected pursuant to this Chapter shall be
used only for the purpose of developing new or rehabilitating existing park
or recreational facilities which serve the subdivision, either by way of the
purchase of land for park purposes or, if the City Council determines that
there is sufficient land available, for the improvement of such land for
park and recreational purposes.
C. Time Limits. Any fees collected pursuant to this Chapter shall be
committed within five years after the payment of such fees, or the issuance
of building permits on one-half of the lots created by the subdivision,
whichever occurs later. If such fees are not committed, they shall be
distributed and paid to the record owners of the subdivision in the same
proportion that the size of their lot bears to the total area of all lots within
the subdivision. t
17
D. Use of Interest. Any interest earned on the accumulated in -lieu fees may
be used for the maintenance of any existing park or recreational facilities.
19.52.080 Credit for Private Recreational Facilities (66477)
A. Authority to Grant Credit. The tentative map decision - making body may
grant credit for private recreational facilities provided within common
interest developments, as defined in Section 1351 of the Civil Code,
against required land dedications or in -lieu fees in accordance with the
provisions of this Section.
B. Standards for Granting Credit. In approving credit for private recreational
facilities against required park fees, the tentative map decision - making
body shall find that all of the following standards are met:
1. The credited private recreational facilities include active recreation
facilities such as playfields, turfed play areas, tot lots, recreation
buildings, swimming pools and playing courts, and similar
facilities. Also eligible are bicycle or hiking trails which are
privately maintained, which connect to trails outside the
development, and which are open to the public. Passive open
space, such as setback areas and passive greenbelts shall not be
granted credit.
2. The private recreational facilities are suitable for use for active
recreational purposes, taking into consideration such factors as size,
shape, topography, access, and location.
3. The use of the private recreational facilities is restricted to park,
recreation, or trail purposes and their private ownership and
maintenance are assured by recorded covenants which run with the
land and which cannot be eliminated without the consent of the City.
C. Amount of Credit. Credit granted for private recreational facilities shall be
from 0 to 20 percent of the amount of required land dedication or in -lieu
fee imposed pursuant to this Chapter. In no case shall credit exceed 20
percent. The amount of credit granted shall be determined by the tentative
map decision - making body in accordance with the following criteria:
" 13
1. The degree to which the private recreational facilities complement
existing or proposed public park facilities serving the subdivision, as
shown in the General Plan's Recreation and Open Space Element.
2. The degree to which the private recreational facilities reduce the
burden on existing or proposed public park facilities serving the
subdivision.
19.52.090 Timing of Dedications (66477.1)
Land dedications shall be offered at the time of final map filing, either on the final map itself
or by separate instrument. The City Council shall accept, accept subject to improvement, or
reject the offer of dedication at the time of final map approval.
iJ4
Attachment C
Tables
1L-
COMPARTIVE PARK FEES - ORANGE COUNTY CITIES
Costa Mesa Single Family Dwelling
$13,572 ` July 2005 4.26 acres
Multi -Family Dwiling
$13,629
Dana Point North of Salve Road
$9,300 March 1995 5 acres
South of Salve Road
$10,540
Capistrano Beach
$9,920
Seal Beach Subdivisions of less than 50 units
$10,000 December 2004 5 acres
Effective July 16, 2007
EASTBLUFF PARK APPRAISALS 1979 -2006
a
1979
,a
$2,250,000
$162,221
Na
1981
$4,140,000
$298,486
84.00%
1984
$6,200,000
$447,008
49.80%
1987
$8,500,000
$612,833
37.10%
2006 current appraisal),
$41,610
$3,000,000
389.52%
"RECEI DpfTERAGFNDDA —�` _f \�
March 9, 2007 PRUITEV' . . 0 R �_ ._ % IF- w - D
The Honorable Steven Rosansky
Mayor
7007 P' >, -9 PH 3-- 52
City of Newport Beach 1;
rI
3300 Newport Blvd. I.,r
Newport Beach, CA 92663
RE: Public Hearing Item. 18 In -Lieu Park Dedication Fee Adjustment
Dear Mayor Rosansky,
On behalf of the membership of the Building Industry Association of Southern
California, Orange County Chapter (BIA /OC), I appreciate the opportunity to
comment on public hearing Agenda Item 18 the In -Lieu Park Dedication Fee
Adjustment.
The members of the BIA/OC are very concerned by the staffs proposal to
dramatically increase the fee by more than 475 %. This is a staggering proposal
that will have immediate negative affects on new home construction
throughout the city.
The BIA /OC has expressed our opposition to such an enormous increase that
appears to be based solely on arbitrary land appraisals. There are many other
factors that are considered part of the standard practice methodology used to
determine a "fair share" contribution that will be imposed on the future
residents of Newport Beach.
Recently members of the BIA were able to meet with city staff to discuss our
concerns. During that meeting several questions were raised. The following
is a list of issues and questions raised by affected stakeholders.
Ratio Calculations and Assumptions
1. What is the actual description of lands within the City that have been
used for the current ratio calculation?
a. Does the city include the state, county, school district, and
privately owned lands including beaches made available to the
public that are within the city boundaries? Also, the
government code actually specifically calls out "community
gardens" to be included in the calculation. Were community
gardens figured into the calculations?
Orange County
Chapter
Building Industry Association
of Southern California
17744 Sky Park Circle
Suite 170
Irvine, California 92614
949.553.9500
fax 949.5519507
www.biam.com
PRESIDENT
TIM McSUNAS
THE SHOPOFF GROUP
VICE PRESIDENT
DAVID GREMINGER
FIELDSTONE COMMUNITIES
2"" VICE PRESIDENT
PAULJOHNSON
RANCHO MISSION VIEJO
TREASURER
DEBRA PEMBER
JOHN LAING HOMES
SECRETARY
DAVE BARTLETT
BROOKFIELD HOMES
IMMEDIATE PAST PRESIDENT
TOM GRABLE
WILLIAM LYON HOMES
TRADE CONTRACTORS AWANCE VP
JIM YATES
GOLDEN WEST PLUMBING
ASSOCIATE VICE PRESIDENT
LAER PEARCE
LAER PEARCE & ASSOCIATES
MEMBER-AT -LARGE
BILL WATT
BAYWOOD DEVELOPMENT
MEMSER-A.T -LARGE
ANDY BERNSTEIN
JACKSON. DEMARCO,
TIDUS & PECKENPAUGH
KRISTINETHALMAN
CHIEF EXECUTIVE OFFICER
2. Ratio: The NB ordinance indicates the ration of parkland as of the 2000
census is 5.1 acres per 1,000 population. Does this figure include
recently dedicated open space from The Irvine Company in the
Newport coast?
a. Has the city checked that the 2000 census number is correct as it
must be used to set the limits of the new ratio? As the
government code reads:
However, the dedication of land, or the payment of fees, or both, shall not exceed the
proportionate amount necessary to provide three acres of park area per 1,000 persons
residing within a subdivision subject to this section, unless the amount of existing
neighborhood and community park area, as calculated pursuant to this subdivision,
exceeds that limit, in which case the legislative body may adopt the calculated amount
as a higher standard not to exceed five acres per 1,000 persons residing within a
subdivision subject to this section.
Land Valuation and Appraisal Method
3. Because there is very limited flat undeveloped space in the city that
could be developed, staff has determined that the fair market value is
around $3 Million per acre. The truth when it comes to parkland
however, is that the parks can be located on lands that are not
"buildable" due to soils issues, right of ways, easements etc.
Accordingly, opportunities for the city to increase its parkland may
be found in "distressed" pieces of property that the city will not pay
premium dollars for. Were any of these types of opportunities
addressed in staffs initial assessment?
Nexus and Projected Expenditures
4. While there seems to be an argument that the amount and location of
land to be dedicated or the amount of fees to be paid MUST bear a
reasonable relationship to the projected use of the park and recreational
facilities by the inhabitants of the subdivision, there is decisional
authority establishing the right to use the money for facilities that are
not located in the subdivision or set aside exclusively for the
subdivision .... problem arise when the new facility bears no
relationship to the inhabitants of the new subdivision. See - Grupe v.
California Coastal Commission (1985) 166 CAM 148.
When dealing with a fee increase of this magnitude, it is important to fully
examine all components and potential alternatives. Due to the complexity
and the numerous unanswered questions of this particular issue, the
BIA/OC respectfully requests that the City Council continue Item 18 for 30
days to allow staff the time to address stakeholder questions and concerns.
The BIA /OC is confident that adjustments to the current methodology will
lead to a reasonable compromise that will benefit both current and future
residents of Newport Beach. To that end, we look forward to working with
the City in the near future.
Thank you for your thoughtful consideration.
All the Best,
Kristine E. Thalman
Chief Executive Officer
Cc: City Council
City Manager