HomeMy WebLinkAbout24 - PH-1 - Proposed 2015 Update to the Park in-lieu - 8/4/2015CITY COUNCIL AGENDA REPORT
MEETING DATE: August 4, 2015 ITEM NUMBER: PFI -1
SUBJECT: PROPOSED 2015 UPDATE TO THE PARK IN -LIEU IMPACT FEES (PARK FEES)
DATE: JULY 29, 2015
PRESENTATION BY: DANIEL INLOES, AICP, ASSOCIATE PLANNER
FOR FURTHER INFORMATION CONTACT: DANIEL INLOES (714) 754-5088
daniel.inioes@costamesaca.gov
RECOMMENDATIONS:
Adopt attached Ordinance and Resolution to:
1) Give first reading to the Ordinance to institute new park fees for apartment projects
(multi -family residences, renter);
2) Adopt resolution to update the City's parkland impact fees for residential
subdivisions and apartments, including the corresponding formula.
•'
1) Provide direction to staff regarding the park fee update and continue the meeting
to a future specified date.
Development Type
Current
Fees Based
Park Fee Alternative 1:
Park Fee Alternative 2:
Fees
on Existing
Formula
Park Expenditure Trends:
Based on 10 -year
Costa Mesa Housing
Trends:
Historic Trends in
Based on 10 -year
Park Expenditures
Historic
Trends in Housing
Development
Single -Family
MM
11.
'- • -
Condominiums -
Residence,
•
1 1
11
Owner
units -
Multi -Family Residence,
Renter
Apartments 50 units or
more
I R 'd
I.
1
oMult'F
mwilmm
BACKGROUND:
The proposal is an update to the City of Costa Mesa's park in -lieu impact fee, ("park
fee"). California Government Code Section 66477, the Quimby Act, and section 66000
authorizes the legislative body of the City to allow the payment of park fees for
recreation purposes for these specified residential projects. These new fees will ensure
a fair fee assessment per development type while also reflecting the current cost of
parkland acquisition and construction for:
• Single Family Residences;
• Multi -family Residences (Owner);
• Apartments 50 units or less;
• Apartments 50 units or more.
Quimby Act of 1975
The municipal responsibility to set aside parkland and open space for its residents is
additionally burdened by future development, and therefore Cities have been
authorized since the passage of the 1975 Quimby Act to pass ordinances that require
developers to set aside land, donate conservation easements, or pay fees for park
acquisition or improvements.
AB 1600 of 1987
This bill allowed for development impact fees to defray all or a portion of the cost of
public facilities related to new development projects. Since apartment developments do
not require a subdivision, new fees for apartments are not secured by Quimby;
however, apartments do place additional burdens on the City's public open space. The
City has a General Plan goal of 4.26 acres of park space per 1,000 people; therefore,
apartments may be assessed a fair and proportionate park fee through AB 1600. It is
this additional fee and its methodology which requires an ordinance to be established.
Current Park Fees
The current park fees were adopted in May of 2005 and only apply to residential projects
requiring a subdivision and do not apply to apartments.
The City Council approved the park fees for new residential subdivisions at $13,572 for
single family homes per unit and $13,829 for multi -family homes per unit. The current
park fee only applies to new subdivided residential projects and not apartments.
Single Family Residence per Unit $13,572
Multi -Family Residence per Unit $13,829
Using the current park fees formula with the updated cost of land, people per household
averages, and our general plan goal, the fees would be $29,713.50 for a single-family
residence, $23,110.50 for a multi -family owner residence, and no fee for apartments
since they are not subdivided. These fees would be thousands of dollars over any other
park impact fee in the county and would hamper immediate development within the City.
Due to this alternative park fees and their associated methodology was investigated.
The Planning Commission provided feedback on Park Fee Alternative #1. Subsequent to
the Planning Commission meeting, staff further developed Park Fee Alternative #2 to
address some issues that were raised at the meeting. (Attachment 4, PC staff report and
minutes).
ANALYSIS:
Objectives of Updated Park Fee Program
Following are the objectives of the park fees update:
• To establish apartment categories. The park fees would apply to all major forms
of residential development within the City including apartments.
• To update the persons per household factor based on current demographic
information.
• To update the per—unit-cost per development type.
• To update the parkland acquisition cost and construction cost based on historic
park funding trends, development trends within the City, and future park
acquisition goals.
Types of Residential Developments Subject to Park Fee
The updated fee program is intended to account for all types of new residential
development, including apartments.
Residential Development Subject to Park Fees
Residential Projects subject To Park Impact Fees Residential Projects exempt from Park Impact Fees
• New common -interest condominium 0 Conversion of apartments to
• New single-family "detached" subdivisions condominiums without changing the unit
• New townhouse "attached" subdivisions count.**
• New condominiums in mixed-use 0 Granny units and accessory apartments
developments 0 Single-family home remodels or additions
• New condo conversions increasing units 0 Multi -family remodels or additions
• New apartments*
Note: A new category for Apartments is being proposed in the Updated Park Impact Fee Program.
`Note: Additional units will be subject to a fee for new apartment conversions resulting in an increase in units
Eligible Expenditures for the Park Fee
All park fees for all types of residential development will meet the same Quimby Act
requirement as to the eligible expenditures of park fee funds. The fees will be used only
for the purpose of developing new or rehabilitating existing neighborhood or community
parks or potential school district properties based on a specified formula that meet the
State Law requirements.
New Methodology to be Adopted
State law requires that new parkland impact fees be adopted and that the fee schedule
be set pursuant to Council conducting a public hearing and approving an ordinance. A
general methodology for calculating park fees is described in the Quimby Act, but AB
1600 also allows Cities to adopt their own methodology granted that; the purpose and use
of the fee is identified, there is a reasonable relationship between the fee's use and the
type of development on which the fee is to be imposed, there is a reasonable relationship
between the need of the public facility and the type of development project on which the
fee is imposed, the fee is proportionate to the cost of the associated use. Within Article 5
of Chapter XI of Title 13 of the City's Municipal Code the procedures for obtaining park
land dedications or assessing and collecting park fees are established. Because this
section strictly applies to new residential subdivisions and not apartments, an ordinance is
required to be adopted to allow application of park fees to rental projects and a resolution
to institute all updated and established fees.
PROPOSED PARK FEES ALTERNATIVES
David Taussig & Associates, Inc. and Stanley R. Hoffman Associates were contracted by
the City to assist in the park fee update process and assist in developing park impact fees
that would meet AB 1600 benefit requirements. The following summary table provides
park fee alternatives for Council to consider in the adoption of new park fees:
Development Type
Existing
Fees with
Park Fee Alternative 1:
Park Fee Alternative 2:
Fees
Updated
Rates but
Park Expenditure Trends:
Based on 10 -year
Costa Mesa Housing
Trends:
same Quimby
Formula
Historic Trends in
Park Expenditures
Based on 10 -year
Historic
Trends in Housing
Development
Sin•
• 1
11•
Residence
Condominiums -
•
units -
Multi -Family Residence,
Renter
Apartments 50 units or
more
esidence
RRenter
_
1
PARK FEE ALTERNATIVE #1: Based on Historic Park Fee Expenditures
Park Fee Methodology
Based on Park Fee Expenditure Trends Over the past 10 years
Cost per Acre = 390,000 +.2238(2,500,000) = 949,500
949500
cost
4.26
acre
2.79
people
$11,285.19 per unit
1
acre
1000
people
1
unit
•
949500
cost
4.26
acre
2.17
people
$8,777.37 per unit
1
acre
1000
people
1
unit
949500
cost
4.26
acre
2.62
people
$10,597.56 per unit
1
acre
1000
people
1
unit
Methodology for Per Unit Cost
• Park land -to -population ratio established by 2000 General Plan. General
Plan Policy 0SR-1A. 1 establishes the park land -to -population ratio of 4.26 acres
per 1,000 people. Any adjustment to this rate requires a General Plan
amendment.
Population density standard based on the US Census.
Since the last update, demographic trends resulted in changes in the average
household size of the various types of residential units within the City. This data
was gathered by Stanley Hoffman & Associates from the 2013 ACS 5 -year
estimates from the US Census.
People Per Household by Dwelli
Single Family 19,861 55,491 2.79
Multi -Family Owner 1,138 2,469 2.17
Multi -Family Renter 18,349 48,125 2.62
• Park land acquisition & construction costs based on 2014 study by David
Taussig & Associates, Inc. For purposes of determining land costs an analysis
of multiple park acquisitions and developments within our region were gathered
and assessed to determine the fair market value of park land acquisition and
construction. This methodology was utilized because there were few recent
comparable land sales to analyze specifically in regards to infill parks which are the
most likely park acquisitions the City can make moving forward.
David Taussig & Associates, Inc. reviewed land sales price data for eight (8)
properties sold within the City since 2003. The weighted average sales price based
on such review was $2,500,000.00 per acre, whereas the cost of construction or
upgrades on existing park space is estimated at $390,000.00. The total cost of
acquiring and constructing park space would be $2,890,000.00 per acre.
Park Fee Expenditures in the Past 10 (Years 2005 — 2015)
Fairview, stairs and signage
2010
$488,550
2.00
$488,549.73
Fairview, constructed wetlands
2013
$5,589,220
45.00
$5,589,220.33
Joann Street Bicycle Trail
2011
$1,262,934
2.00
$1,262,934.40
Wilson Park, picnic shelter
2014
$45,000
0.05
$45,000.00
Del Mesa Park, new picnic shelter
2014
$45,000
0.05
$45,000.00
Brentwood Park
2011
$3,262,581
1.20
$3,262,580.52
Brentwood Park Upgrades
2011
$315,734
1.20
$315,733.60
Volcom Skate Park Dev
2006
$1,761,429
1.25
$1,761,428.57
Angels Playground
2008
$1,869,232
2.00
$1,869,231.73
Lions Park/Davis Field Baseball
2011
$526,223
2.50
$526,222.66
Bark Park
2008
$208,914
2.00
$208,914.13
Shalimar Park, new playground
2014
$120,000
0.16
$120,000.00
Total
$15,494,816
59.41
$12,232,235.15 $3,262,580.52
Due to the lack of land and priority to upgrading existing parks only 1.2 acres of
land was acquired over the past ten years. This represents 22.38% of the 5.36
possible acres the City could have acquired. Therefore, having a cost per acre
which includes the full cost of construction and only 22.38% of land acquisition is
a reasonable approach. This comes out to $949,500.00 per acre.
Average Units Developed Per Year
Based
on Actual Units
developed over
the last 15 years.
7 9 units
u
6
ung
47
■ ■ ■
■ ■ ■ ■ ■
I L� LJ i
■ j — ■ ■ �
Single Family Housing
Condominium
Apartments
2000
r
2001
r
2002
r
•
2003
r
2404
r
•
2005
r
•
2006
r
•
•
2007
r
2008
•
r
2009
+
•
•
2014
+
2011
•
2012
•
•
2013
+
2014
r
•
■
Total 712
94
1187
35%
5%
60%
Source: CAR and nOF
data 1— 2000 to 21115.
PARK FEE ALTERNATIVE #2: Based on Historic Costa Mesa Housing Trends
Park Fee Methodology
Based on Historic Housing Development Trends Over the past 10 years
Cost per Acre = 390,000 +.45 (2,500,000) =1,515,000
Single -Family Residential
1,515,000 cost 4.26 acre 2.79 people
1 acre 1,000 people 1 unit $18,006.38
1,515,000 cost 4.26 acre 2.17 people
1 acre 1,000 people 1 unit $14,005.96
Cost per Acre = 390,000 +.11 (2,500,000) = 669,750
669,750 cost 4.26 acre Uses an average people
per unit of 1.7723 for
1 acre 1,000 people large apartments.* $5,056.61
*This average was calculated byfindingaverage people per unit for various apartment sizes and
calculating one rate by using the average proportions for various apartments sizes in atypical
developmet with 50 units of more.
Previous park expenditures were hampered by only receiving funds from 40% of
the overall units developed in the last 15 years and therefore limited the potential
projects that could be developed by this fund. This is shown in the infographic
above. This graphic also confirms that if apartments are paying park fees in the
future the potential fund overall will grow and perhaps will be sufficient for more
opportunities for acquisition in the future. This alternative proposes to increase
the weighting of the cost of acquisition to 45% for single family residences and
multi -family projects. This provides further funding for park upgrades and
acquisition but does not raise the fee much higher than the existing fees. Some
of the high-end apartment projects (entitled or completed) are listed below.
Aoartment Proiects
Blue Sol (Occupied)
421 Bernard Street
113
Symphony Apartments
585 and 595 Anton Boulevard
393
Baker Street Apartments
125 Baker Street
240
Anton Midrise Residential
580 Anton Boulevard
250
Azulon (OCCUDied)
1500 Mesa Verde Drive
230
Data Used to Calculate the $5,056.61
Park Fee for Apartments
1�
AVG PEOPLE PER
SfUD10
if*
2.1
AVG P EOPLE PER 2
BEDRODOM UNIT
HfTle"11W5 —
Park Acquisition Weighted at 509'o Less �
APPLIED TO APARTMENTS WUH
50 UNITS OR MORL
3 Bedroom
4%
3.2
AVG PEOPLE PER 3
BEDROOM UNIT
#4
1.5
AVG PEOPLE PER 1
BEDROOM UNIT
Source: Percent Share calculated from data collected on 60 apartment complexes
with SO un its ormore withinthe City of Costa Mesa: Data from Costar. Average
people per u nit type gathered from case study of recent apartment development
in the Citywith lessthan 1 percentvacancy and morethan 100 units: Blue Sol.
The threshold of 50 units was taken from the Zoning Code as a starting point for
discussion. The Zoning Code already recognizes 50 units as a threshold for large
developments. To account for the common space amenities and the complexities of
person per household ratios within apartments the information below was used to
create an apartment park fee, for developments with a significant number of units, of
$5,056.61.
COMPARISON OF PARK FEES IN OTHER OC CITIES
The following table indicates park impact fees of other Orange County cities. Because
cities vary in their approach to calculating park impact fees, and demographic and
housing characteristics also differ from city to city, the following table is provided for
reference purposes only and is not intended to be a direct comparison.
City
Park Fee
(Per Unit
City of Laguna Beach
$4,580
City of Santa Ana
Varies;
up to $4,823
City of Seal Beach
$5,000 to $10,000
City of Anaheim
$5,388 to $6,936
City of Garden Grove
$5,500
City of Tustin
$5,931 to $6,386
City of San Clemente
$6,823
City of Newport Beach
Varies; $6,894 to $26,125
City of Brea
$6,945
City of Fountain Valley
$7,421
City of Laguna Hills
$7,700
City of Orange
$8,894
City of Seal Beach
$10,000
City of Huntington Beach
No Subdivision:
Detached $11,540
Attached $8,576
Subdivision:
Detached $17,857
Attached $13,385
City of San Juan Capistrano
$11,600
City of Irvine
Fee varies based on acreage
value of land to be dedicated.
May be as low as $1,150 per acre
of land dedication.
City of Costa Mesa
$13,572 to $13,879
Automatic Adjustment of Park Fee based on Consumer Price Index Every Year
The current park fees have not been adjusted for ten years. The consultants propose
that the park fee be increased on July 1st of each year, starting July 1, 2016, based on
the change to the Los Angeles — Riverside -Orange County Consumer Price Index in
comparison to the previous calendar year. This would adjust for escalation and allow for
the City to update the park fees in 5 years as opposed to biennially as stated in the
code.
New Park Fees to be applied for Pending Entitlement Projects
State law requires that the new fees shall not go into effect until after 60 days of Council
adoption of the resolution. Park fees may be applied to all pending projects, including
rental projects. Staff recommends that the new park impact fees shall apply to any
live/work or residential development project which meets any of the following criteria:
(1) Any discretionary application for a live/work or residential development project which
was approved by the final decision making body after the effective date of the resolution;
OR
(2) Any pending ministerial application for a residential development project which was
not subject to discretionary review and which was submitted into plan check after the
effective date of the resolution; OR
(3) Any previously -approved live/work or residential development project which has
expired after the effective date of this resolution.
Note: If park fees are reduced, Council would need to direct staff to modify the resolution
to reflect whether or not reduced fees will be applied retroactively to previously -approved
projects.
LEGAL REVIEW:
The City Attorney's office has approved the attached resolution as to form.
ALTERNATIVES:
The City Council may select one of the following actions with the Park Fees;
• Existing Fees: Keep current park fees; however, Council may wish to add new
park fees for apartments as identified in Alt #1 or Alt #2.
• Park Fee Alternative #1: Adopt this alternative based on trends in park fee
expenditures.
• Park Fee Alternative #2: Adopt this alternative based on Costa Mesa housing
trends.
• Continue hearing: Provide direction to staff to research and identify other
alternatives.
The resolution would be modified to include the selected alternative and park fees.
Development Type
Existing
Fees
with
Park Fee Alternative 1:
Park Fee Alternative 2:
Fees
Current
but
Rates
same
Park Expenditure Trends:
Based on 10 -year
Historic Trends in
Park Expenditures
Costa Mesa Housing
Trends:
Based on 10 -year
Historic
Trends in Housing
Development
Quimby
Formula
Single -Family
MM
11•
Residence
Condominiums -
Residence,
MM
11
• wner
Apartments 1
units -
Multi -Family Residence,
Renter
Apartments 1 units or
more
-
'Renter
_
1
CONCLUSION:
The City's park fees have not been updated for over ten years. Council may select a
methodology for calculating park fees and adopt new park fees. Important note: Staff
recommends that the park fees be updated automatically every year based on the
consumer price index and that the new park fees be applied to pending/future
development projects that have not received zoning entitlements to date.
DANIEL INLOES, AICP GARY ARMSTRONG, AICP
Associate Planner Economic Development & Development
Services Director / Deputy CEO
Attachments: 1. Draft Council Ordinance
2. Draft Council Resolution
3. Redlined Version of Proposed Ordinance Changes
4. Minutes from Planning Commission Meeting
5. Justification Study by David Taussig & associates, Inc.
6. Letter of Support from BIA
Distribution: Director of Economic & Development/Deputy CEO
Assistant Development Services Director
Sr. Deputy City Attorney
Public Services Director
City Engineer
Transportation Services Manager
Fire Protection Analyst
File (2)