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Page 2 <br /> Commercial and Industrial Dedication Rate <br /> The City currently has a park dedication rate of ten(10) percent for commercial and industrial properties.As <br /> was noted in at the June City Council Workshop,the park dedication survey HKGi completed this spring found <br /> communities had park dedication rates ranging from two(2)to ten(10) percent with half using 10%. It is <br /> recommended that the rate be maintained at 10%at this time. <br /> Method of Cash in Lieu Dedication <br /> The following table was developed to provide an overview, as well as the pros and cons of each potential <br /> method for collecting cash in lieu of a land dedication. <br /> Method Overview <br /> Set based on Use the fees set by other • Easy to implement • May not be reflective of real <br /> neighboring communities as the basis for • Ensures City is estate market <br /> communities the fee in Elk River competitive • Potential for legal challenge <br /> as does not meet state <br /> statute requirements <br /> County Assessors Use estimated market value of • Easy to identify • Lags behind marketplace so <br /> Value the land for fee collection • Generally accepted may collect too much or too <br /> method little <br /> Appraisal Study Hire an appraisal firm to • More accurate to • Study estimated to cost <br /> conduct a study evaluating the market conditions $5,000 to$15,000 depending <br /> average market value of vacant • Established fee that on the number of classes and <br /> properties by class.The study developers can be firm selected <br /> would take about 2 to 3 certain of • Potential for market lag <br /> months to complete and could depending on the frequency <br /> be paid for from park that City conducts study <br /> dedication.This would be used <br /> to set the fee amounts. <br /> Require appraisal Require that the developer • Establishes fee at • Adds time to development <br /> at time of submit an appraisal as part of exact land value process <br /> development the final platting process.Fee • Reflects each unique • Additional cost for developer <br /> collection would then be based situation —one firm estimated an <br /> on that value. appraisal to cost$2,500+for <br /> commercial/multi-family <br /> projects <br /> Sale Price of Require that the developer • Relatively simple to • May not include value gained <br /> Property provide the sale price of the implement through entitlement process <br /> property and use that value for • Sale may have occurred a <br /> fee collection. significant time ago <br /> • Potential for developers to <br /> manipulate <br /> Negotiation Require that each park • Uncertainty for • Potential to be challenging to <br /> dedication fee be agreed to developers come to an agreement <br /> through negotiation between • Starting point will still need <br /> the developer and the City. to be established <br /> • Staff time <br /> 0 Potential for legal challenge <br />