Parks and Recreation BoardJuly 25, 2022

8-1: REVISED Parkland Dedication Requirements for Commercial Developments Presentation — original pdf

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Austin Parks and Recreation Department Presentation on: Parkland Dedication Requirements for Commercial Developments Paul Books, Planner III; Robynne Heymans, Planner Senior; Thomas Rowlinson, Principal Planner; Randy Scott, Program Manager - Parks and Recreation Department July 25th, 2022 Proposed Formula Required Parkland = 9.4 acres X Functional Population 1,000 people • 9.4 acres per 1,000 people equals the established parks level of service • Functional Population • The estimated commuter workforce of a new development discounted by their relative opportunity to access parkland, representing the full-time equivalent population of new development • Functional Population = Total Employees X Occupancy Rate X Operation Time X Percent Commuter from Outside City Limits x Percent working on-site (applies to office only, other uses are assumed 100%) Employee Density (SF Per Employee) Occupancy Rate Operational Hours Percent Commuter Industrial Retail Office Hotel 2,500 SF 550 SF 300 SF 1,500 SF 94% 95% 92% - 70.8% 37.5% 23.8% 70.8% 58% 58% 58% 58% Percent Working On- Site 100% 100% 86.6% 100% 2 Proposed Requirements Land Dedication – 9.4 Acres per 1,000 functional population Fee-in-Lieu – $3,781.32 per functional population Development Fee – $351.85 per functional population Per SF by Use Category: Fee-in-Lieu Development Fee Office $1.3862/SF $0.1290/SF Total: $1.5152/SF Retail $1.4206/SF $0.1322/SF $1.5528/SF Industrial $0.5838/SF $0.0543/SF $0.6382/SF Hotel $1.0352/SF $0.0963/SF $1.1315/SF Figures are preliminary and subject to change 3 Example of Application - Mixed Use Commercial Step 1: Calculate Estimated Employees in Office Space Total SF SF/Employee Total Employees 136,000 300 453 Commercial Step 2: Derive Functional Population of Office Space Total Employees Occupancy Operation Hours Percent Commuter Percent Work On Site Functional Population 453 A 92% B 23.8% C 58% D 86.6% 49.51 E Formula = A * B * C * D*E Commercial Step 3: Calculate Requirements of Office Space Commercial Land Owed 0.47 acres Formula = (Functional Population/1000) x 9.4 acres Commercial Fee-In-Lieu $188,523 Commercial Development Fee $17,544 Formula = SF of Development x $1.3862 Formula = SF of Development x $0.1290 Total Requirement: Land Owed 5.48 acres Fee-In-Lieu $1,088,383 Development Fee $180,299 Residential Step 1: Calculate Residential Population Residential Step 2: Calculate Residential Requirements Total Units SMART Units Resident Population 309 0 525 Residential Land Owed 4.94 acres Residential Fee-In-Lieu $899,681 Residential Development Fee $162,685 Figures are approximate Formula = (Total Units x 1.7 / 1,000)*9.4 Formula = People x $2,912.17 Formula = People x $526.49 4 Urban Office Hypothetical Example of Application - Office Step 1: Calculate Estimated Employees Total SF SF/Employee Total Employees 325,000 300 1,083 Step 2: Derive Functional Population Total Employees Occupancy Operation Hours Percent Commuter Percent Work on Site Functional Population 1,083 A 92% B 23.8% C 58% D 86.6% 119.14 E Formula = A * B * C * D*E The functional population subject to parkland dedication requirements is 119.14 Step 3: Calculate Requirements Land Owed 1.12 acres Fee-In-Lieu $459,515 Development Fee $41,925 Formula = (Functional Population/1000) x 9.4 acres Figures are approximate Formula = SF of Development x $1.3862 Formula = SF of Development x $0.1290 5 Projected Parkland Funding Sources How PARD Pays for Growth • If a commercial PLD ordinance was adopted, PARD anticipates collecting approximately $4.3 million in fees.1 • For FY23 PARD will be appropriating $26 million from residential PLD. • Bond funds are anticipated to be spent at a rate of $30 million annually (2018 bond amounting to $149 million over five years). 1. Based on DSD annual reporting of permitted commercial SF for FY21 6 Community Input SpeakUp Austin – 328 Respondents May 9 - July 10th Reoccurring Themes Changes in commuting patterns due to COVID-19 Impacts on affordability Applicability and Exemptions Procedures and Clarifications • • • • How often do you access public parks before, during, or after work? How do you think a commercial parkland dedication ordinance might impact a business' operations for employees, visitors, or patrons? 57.1% 7.7% 14.5% 9.3% 11.4% 12.1% 13.9% 74.0% 7 Stakeholder Engagement • 6 stakeholder meetings held: • May 25, June 6, June 7, June 8, and July 7 (two sessions on same date) • Minimum of 40 stakeholder groups engaged: • Parks Groups: Austin Parks Foundation, The Trail Foundation, Save Barton Creek Association, PODER, Tree Folks, Pease Park Conservancy, Shoal Creek Conservancy, Austin Outside, SOS Alliance, Go Austin Vamos Austin, Hill Country Conservancy, Keep Austin Beautiful, Barton Springs Conservancy, Waterloo Greenway, Environment Texas, River Watchers, Norwood Park Foundation • Development Groups: Downtown Austin Alliance, Real Estate Council of Austin, Austin Board of Realtors, Civilitude, Austin Chamber of Commerce, Thrower Design, Austin Hotel and Lodging Association, Austin Tech Alliance, US Hispanic Contractor’s Association of Austin, Austin Contractors and Engineers Association, Austin Black Contractor’s Association, Austin Permit Service, American Institute of Architects, Asian Contractor Association, Drenner Group, Associated General Contractors of Austin, Austin Tech Alliance, Austin Independent Business Association, DPR Construction, Garza EMC, Coleman and Associates, Endeavor Real Estate, McLean & Howard • Multiple social media posts across Instagram, Facebook, and Twitter • Newsletter announcements via Development Services Department • Public notices mailed and posted in paper of record for public hearings 8 FAQs: Requirements PARD staff utilize code criteria to determine if parkland will be satisfied by land or fee, including location within the park deficient map and proximity to existing parkland. Only about 10% of residential developments dedicate land, the rest pay 100% fees. When land is required, it is most common for parkland to be satisfied by a combination of land dedication and fees. d n a L s v e e F The park deficient map determines a development's land context and impacts the requirements. A commercial development inside the ‘Urban Core’ has a smaller distance between park deficient areas than projects outside the 'Urban Core', creating a more frequent occurrence of parkland dedication requirements being satisfied with land dedication. t x e t n o C d n a L l n o i t a u c l a C t n e m e r i u q e R Fees and land requirement calculations are based on building size, measured in square feet. As with the residential ordinance, the fee schedule would be posted on the City's website. Commercial properties would be included in the early determination process to provide certainty on the requirements to new developments. 9 FAQs: Applicability and Exemptions There are no explicit exemptions in the ordinance, however it does not apply to Civic uses as defined in the Code 25-2-6 including: Schools, Hospitals, Daycares, Group Homes and Community/Cultural services Commercial Parkland Dedication will only apply to net new square footage or units. Square footage or units that have previously satisfied parkland dedication requirements would not be required to satisfy them again. Existing commercial buildings will not be charged until they go through a redevelopment requiring a building permit, site plan or subdivision that proposes additional square feet that did not previously satisfy the requirement. There is no proposed minimum development size. 10 FAQs: Changes to Commuting patterns due to Covid-19 Requirements are adjusted annually to accommodate changing market and commuting trends: The commercial formula includes a reduction based on market occupancy percentages. This percentage would be updated annually. Requirement is based on square footage; if future new office spaces become smaller to account for a decrease in usage resulting from new work models, then the requirement will decrease as a result. Square footage by use is included in the ordinance and will be revisited with any update to the nexus study. The commercial formula includes a reduction based on commuting patterns. This percentage is based on the latest available longitudinal employer- household dynamics origin- destination employment statistics published by the United States Census Bureau. This data was published in 2021 and reflects 2019 commuting patterns. This percentage would be updated annually. 11 FAQs: Procedures and Clarifications Timing of requirements: At the time of subdivision, site plan, or building permit, after the effective date of the new ordinance. The proposed effective date for this ordinance to take effect is January 1, 2023. Credit for Open Space: Parkland can be counted toward open space requirements, such as Subchapter E. Parkland will always be open to the public, whereas open space can be private. Offset for residential requirements: Setting the fees of parkland dedication is a policy decision made by City Council. City staff provides a fee schedule annually to City Council based on the methodology established by City Code. Fee change over time: Existing ordinance refers to annual fee schedule based on a codified formula reflecting the average costs of parkland acquisition and development, and this will be the same for commercial. PARD conducts public outreach annually to inform stakeholders of new parkland dedication fees. 12 FAQs: Impacts on Affordability • Typical hard costs for commercial developments range between $148/sq ft - $657/sq ft, depending on use and construction type • This does not include the cost of land acquisition, building design, or contractor/developer overhead. • Cost of parkland dedication fees currently range from $0.64/sq ft to $1.51/sq ft depending on the commercial building category. This is equivalent to about 0.27- 0.42% of the ‘hard costs’. • Commercial fee rates are expected to be comparable to those seen in other municipalities • Variation is likely due to costs associated with parkland acquisition and development Office Retail Industrial Hotel $3.16 per SF $1.90 per SF $1.27 per SF $569 per room $1.20 per SF $0.54 per SF $0.23 per SF $538 per room Austin, Texas $1.51 per SF $1.55 per SF $0.64 per SF $1.135 per SF City Belmont, California* Atlanta, Georgia* *impact fees 13 Fees Relationship to Pricing • Recent report by the Texas A&M Real Estate Research Center surveyed development fee rates across Texas municipalities, but did not draw a correlation between fee rates and the price of homes. • Development fees are a one-time cost only assessed to new units, and are one of the many factors that impact the cost of housing construction including materials and labor cost. • Dr. Crompton of Texas A&M University argues that passing all costs to the consumer is unlikely, as market forces dictate price. Top: other Texas cities saw comparable increases in housing prices despite lower fees. Left: Choices available to municipalities when assessing their parks system 14 Demonstrated Benefits Over 100 parks have been acquired or expanded through parkland dedication Over 125 new acres of parkland has been added from parkland dedication since 2018 Over 76 park development projects have been funded through parkland dedication since 2018 Tillery Pecan Neighborhood Park Lawrence Street Pocket Park Brashaw Crossing Vistas Neighborhood Park Triangle Commons Pocket Park Goodnight Ranch Pocket Park Saltillo Plaza Pocket Park d n a l k r a P d e t a c i d e D l t n e m p o e v e D k r a P Armadillo Neighborhood Park Auditorium Shores Trailhead Battle Bend Neighborhood Park George Washington Carver Juneteenth Memorial Ponciana Neighborhood Park Mustang Button Park n o i t i s i u q c A d n a l k r a P Tillery Street Pocket Park Great Hills Neighborhood Park Slaughter Creek Greenbelt Walnut Creek Greenbelt Williamson Creek East Greenbelt 15 Updated Anticipated Timeline • Continued Meetings with key stakeholders in small groups to receive feedback on ordinance language. • Draft Commercial Dedication Ordinance ready for stakeholder review • Draft Commercial Parkland Dedication ordinance language to Planning Commission Action Postponed • Draft Commercial Parkland Dedication ordinance language to Codes and Ordinances Joint Committee Cancelled • Draft Commercial Parkland Dedication ordinance language to Parks and Recreation Board • Draft Commercial Parkland Dedication ordinance language to City Council • Draft Commercial Parkland Dedication ordinance language returns to Planning Commission May-July Late June / Early July July 12 July 20 July 25 July 28 August 9 16 Thank you If you have any questions, Please contact: Dedicated Email Randy Scott, Parkland Acquisition/PLD Program Manager, Robynne Heymans, Senior Planner, Paul Books, Planner III, Thomas Rowlinson, Principal Planner, 17