Home City park Planning Commission postpones decision on park fees for commercial development

Planning Commission postpones decision on park fees for commercial development

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Tuesday July 19th, 2022 by Jonathan Lee

Should new commercial developments provide land and/or money for new parks? If so, how? These were the questions the Planning Commission considered last Tuesday regarding a proposed rule that would require offices, retail, hotels and industrial buildings to include on-site park space or pay a fee to fund new parks nearby.

The push for the designation of commercial parks builds on the city’s current ordinance regarding the designation of parks for residential development. The commercial version works similarly, using a formula to estimate the increased demand for parks resulting from development:

The business requirement would use the current formula of 9.4 acres of parkland for every 1,000 new park system users. Commercial uses would be calculated based on the number of employees per square foot, discounted by hours of operation, occupancy, and commuter percentages.

The idea for a commercial park designation first came from the Parks and Recreation Board. Council voted in 2020 and again in 2022 to recommend that City Council adopt the policy. In April, Council began the process of incorporating the policy into city code.

Replacement fees are tied to the cost of land for new parks and are updated annually as land values ​​change. Last year, soaring land prices caused the residence fees to be doubleddrawing criticism from housing affordability advocates who argued that the fees would increase the cost of construction and, therefore, the price of new homes.

Although business fees are not passed on to tenants and buyers in the same way, they were still criticized on Tuesday for increasing the cost of construction.

“This study just came out showing Austin has by far the highest homebuilding costs in the state,” Commissioner Greg Anderson said. “Looks like we’re trying to do the same for commercial offices with the same broken formula.”

“I don’t believe the formula is broken,” replied Randy Scott of the Parks and Recreation Department. “I believe the formula is now beginning to reflect the true cost to the Parks and Recreation Department of providing park land and facilities to new residents coming to Austin.”

Staff members added that the fee would amount to approximately 0.42% of a project’s construction costs.

Commissioner Jennifer Mushtaler had the opposite concern of Anderson. “I guess I’m worried we’re cutting too much,” she said.

Because royalties have to be spent some distance from the development, Commissioner Claire Hempel questioned how they would work downtown, where land is scarce and expensive. Staff members said that after a year, if there is no land available for purchase, the city may spend on improving the park or purchase a park elsewhere.

Commissioner Awais Azhar argued that the parks formula should take into account the trend of increased remote working, which likely means less demand for park space in commercial developments.

Parks staff recognized that the need for new parks following commercial development is less evident than it is for new residential development. At the meeting, they went through the legal precedent for the ordinance, which requires a direct connection — or “essential connection” in legalese — between increased park use and new commercial development.

“The critical link between commercial development and park use is made in part by recognizing the measurable peak in park use before and after construction,” said PARD’s Robynne Heymans.

Anderson argued that the order could be on shaky ground — not only legally but also politically. “The parks are amazing, but when you have these staggered fees that just double year after year, and we use the same formula to get here, the state is just going to take that power away from us,” Anderson said.

With many questions remaining on the proposed order, commissioners voted to postpone a recommendation until August 9. A public Council hearing was scheduled for July 28, although the postponement of the Planning Commission may push that date back.

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