Bill calls on developers to chip in for new parks

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February 18, 2013
By: Nick Halter
Proposed legislation would require developers of new buildings, like the Soltva in the North Loop, to help pay for parks.
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Nick Halter

The North Loop neighborhood, long before the condos and restaurants, was an industrial hub with brick warehouses and factories.

As the neighborhood has transitioned into a residential area, its park amenities haven’t kept pace. Unlike much of the rest of the city, it was never built as a place for people to play.

Neighbors want to change that. They’ve had a study done about how and where the community could build a new park for the surging population, which has grown from 1,500 residents in 2000 to 4,300 in 2010.

“The neighborhood wants to continue to grow,” said North Loop Neighborhood Association President David Frank. “Part of what that means is providing amenities —  not just a place for people to live and park their car and work — but a place for people to hang out, throw a Frisbee, exercise their dog or lay on the grass.”

But North Loop leaders aren’t sure exactly where they will get funding for the project, as the Minneapolis Park Board has been wrangling with tight budgets for several years.

A bill before the Minnesota Legislature would likely help neighborhoods like the North Loop get funding for a new park.

The bill would require Minneapolis developers to pay $1,500 for every residential unit they build, or $200 per employee for new commercial space. To put that into perspective, the 204-unit, $28 million Third North project would have to pay the Park Board just over $300,000.

Estimates from the Park Board say that the fee would give the city $1.5 to $2 million a year for parks.

The Park Board could only use that money to build a new park or make capital improvements to existing parks, not for maintenance and operation. The money would have to be used in the neighborhood or less than a half-mile from the development project.

“This legislation really provides exactly the type of tool we would like to augment the type of necessary infrastructure necessitated by growth,” Park Board Commissioner Anita Tabb said, testifying in a Minnesota House committee meeting on Feb. 13.

A park dedication fee is not a new idea. Most suburban cities impose one on subdivision developers, but because Minneapolis has an independent parks authority, it was never given state authorization to impose the fees.

The Legislature has twice passed bills to authorize the dedication fee — in 2008 and 2011 — but technical difficulties and disagreements between the city and Park Board prevented it from being implemented in Minneapolis.

This year’s bill is authored by Rep. Frank Hornstein (DFL-61A) in the House and Sen. Scott Dibble (DFL-61) in the Senate. Most Minneapolis lawmakers have signed onto the bill.

Republicans in the House took a few jabs at the bill, arguing that Minneapolis parks already get funding from Local Government Aid and Legacy Amendment sales tax revenue, but ultimately supported the measure.

Dibble said he’s confident this year’s bill will do the trick.

“I have no doubt, the third try will be a charm,” he said.

The bill could provide a windfall for several Minneapolis neighborhoods. Uptown was under heavy construction last summer, as at least 700 units were built, mostly on the Greenway. Finance & Commerce reported that 522 units were built in the North Loop in 2012.

It’s unclear exactly how much revenue would be generated, because some properties can receive exemptions and because the city didn’t immediately have detailed new construction numbers. Also, the fee would be assessed for commercial properties at $200 per employee. 

Based on the Finance & Commerce report, development in the North Loop would have generated roughly $783,000 in 2012 if park dedication fees had been authorized. The North Loop’s study on potential parks have cost estimates at roughly $2 million to $3 million. It’s more expensive in the North Loop because of high land values in the area.

In previous years, developers have fought the dedication fee, arguing that it was more expensive than in neighboring suburbs. This year, a representative for the Builders Association of Minnesota told the House committee that the Association did not oppose the fee.