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Page <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 <br />Oven'iew <br />Pros <br />COFIS <br />Set based on <br />Use the fees set by other <br />■ <br />Easy to implement <br />■ <br />May not be reflective of real <br />neighboring <br />communities as the basis for <br />■ <br />Ensures City is <br />estate market <br />communities <br />the fee in Elk River <br />competitive <br />■ <br />Potential for legal challenge <br />as does not meet state <br />statute requirements <br />County Assessors <br />Use estimated market value of <br />■ <br />Easy to identify <br />■ <br />Lags behind marketplace so <br />Value <br />the land for fee collection <br />■ <br />Generally accepted <br />may collect too much or too <br />method <br />little <br />Appraisal Study <br />Hire an appraisal firm to <br />■ <br />More accurate to <br />■ <br />Study estimated to cost <br />conduct a study evaluating the <br />market conditions <br />$5,000 to $15,000 depending <br />average market value of vacant <br />■ <br />Established fee that <br />on the number of classes and <br />properties by class. The study <br />developers can be <br />firm selected <br />would take about 2 to 3 <br />certain of <br />■ <br />Potential for market lag <br />months to complete and could <br />depending on the frequency <br />be paid for from park <br />that City conducts study <br />dedication. This would be used <br />to set the fee amounts. <br />Require appraisal <br />Require that the developer <br />■ <br />Establishes fee at <br />■ <br />Adds time to development <br />at time of <br />submit an appraisal as part of <br />exact land value <br />process <br />development <br />the final platting process. Fee <br />■ <br />Reflects each unique <br />■ <br />Additional cost for developer <br />collection would then be based <br />situation <br />— one firm estimated an <br />on that value. <br />appraisal to cost $2,500+ for <br />commercial/multi-family <br />projects <br />Sale Price of <br />Require that the developer <br />■ <br />Relatively simple to <br />■ <br />May not include value gained <br />Property <br />provide the sale price of the <br />implement <br />through entitlement process <br />property and use that value for <br />■ <br />Sale may have occurred a <br />fee collection. <br />significant time ago <br />■ <br />Potential for developers to <br />manipulate <br />Negotiation <br />Require that each park <br />■ <br />Uncertainty for <br />■ <br />Potential to be challenging to <br />dedication fee be agreed to <br />developers <br />come to an agreement <br />through negotiation between <br />■ <br />Starting point will still need <br />the developer and the City. <br />to be established <br />■ <br />Staff time <br />■ <br />Potential for legal challenge <br />