2022-021 Parkland Dedication and DevelopmentMarch 25, 2022 Report No. 2022-021
INFORMAL STAFF REPORT
TO CITY COUNCIL
SUBJECT:
Parkland Dedication and Development
EXECUTIVE SUMMARY:
City staff presented proposed updates to the parkland dedication and development ordinance to
City Council on March 1, 2022. With this update, a new methodology was introduced that outlines
the implementation of a new impact fee structure.
Beginning in 2019, staff engaged the development community in Developer Town Halls and Focus
Group meetings to help draft the ordinance and develop the proposed fee structure. In addition to
these meetings, staff also held meetings with the Dallas Builders Association to review fee updates.
The proposed ordinance and fee structure reflect current levels of park service and costs to acquire
and develop park land.
DISCUSSION:
During the March 1, 2022, Work Session, City Council had several questions regarding the
proposed updates to the ordinance. The summary below provides additional information and
clarification to the discussion.
Can affordable housing receive a reduction or waiver?
Community Services is currently exploring incentives through an Affordable Housing Toolkit
program. Staff recommends including park dedication and development in the review and as part
of a comprehensive strategy for affordable housing. Additionally, modifications to the
requirements can be made for individual projects or developments as appropriate through a
Development Agreement.
Could this impact growth in residential development?
There are many contributing factors in predicting growth. The housing market today has changed
significantly over the last two years. Interest rates and construction costs have heavily influenced
the market. Low inventory in available homes continues to drive demand. Sales remain strong
despite substantial increases in sale prices. Locally, the trend in demand and pricing mirrors the
larger market and is expected to continue.
Staff reached out to the City of Melissa, who recently implemented one of the highest park fees in
the area, to discuss their experience. Melissa reported no negative impacts in permit sales and no
negative feedback on the updated fee. Exhibit 1 includes the fee schedule for the City of Melissa
which also has an assessment on ETJ properties.
Staff also spoke to a local home builder who acknowledged seeing an increase in the return on
investment under current market conditions. According to this builder, with advance notice of an
implementation date for permit fee increases, the new costs could be factored in during several
phases of development planning including design of the neighborhood, subdivision density, home
March 25, 2022 Report No. 2022-021
concept, and pricing. In addition, staff talked to a local realtor, who commented that calls for
realtor services exceeded 70 just in one day and who also anticipated the Denton residential real
estate market to flourish for the near future.
A recently listed property reflects the nature of the current market: On Thursday, March 17, Staff
received notification of a property recently listed for sale. Staff was informed that the property
had a purchasing offer for $250,000 per acre for the 25-acre parcel, making the total price offered
$6,500,000. This parcel is located within the core of the city. This price per acre is significantly
higher than the figure the Department has been receiving in appraisals as well as far above the
value of land used in the calculations for the new fee structure in the proposed ordinance.
Understanding the park requirements are one part of the development fee program, the park fees
alone represent less than half a percent of the total construction cost of the average new home. The
proposed ordinance also expands credits and provides flexibility in alternatives.
Could we consider a phased approach?
Phasing in the new dedication and fee structure is an option. The proposed dedication and fee
structure is based on full cost recovery. A phased in approach will require continued subsidy to
new park development and will impact the level of service. Policy direction on the level of subsidy,
identification of alternate sources of funding, and maintaining levels of park service will be part
of the discussion to phase in the requirements. If this direction is taken, staff recommends a three-
year tiered structure to reach full cost recovery and to align full implementation with the first
review of the assessments.
Is the strategy to get more land or have developers build parks?
The ordinance provides several strategies to achieve the purpose of providing park amenities that
match the pace of growth and demand created by new residential developments. These strategies
include but are not limited to the dedication of land, funds to purchase land, the ability for a
developer to build a park, and the payment of a fee for the development of a park.
The ordinance gives the City and developers the flexibility to work together to determine which
strategy is best to meet the needs of the development, park zone, and planning objectives. For
example, a developer –built public parks makes more sense in a zone where land availability is
limited. Additionally, the construction of private parks can be beneficial in reducing impact in an
area with established parks. The proposed ordinance allows City staff to adjust their strategies as
needed based on the development and park needs.
Dallas Builders Association
Attached (Exhibit 2) is a letter sent to City leadership that provided feedback from the Dallas
Builders Association (DBA). In addition, a response to the DBA is attached as Exhibit 3 that
outlines the staff response to the questions submitted.
Within this communication, questions were asked regarding the proposed costs to construct both
a Neighborhood and Community Park. After review of the proposed expenses, staff made
adjustments to the acres of irrigation, architect/design % and contractor profit %. Based on the
March 25, 2022 Report No. 2022-021
new total construction costs, the impact fee will be adjusted to Single Family - $2,514.69 (Rounded
up to $2,515) and Multi-Family $1,740.94 (Round up to $1,741). This is a reduction of
approximately $200.
CONCLUSION:
Staff tentatively plans to present the proposed ordinance on April 19 for City Council
consideration.
ATTACHMENTS:
Exhibit 1 - Park Dedication and Development Survey
Exhibit 2 – Dallas Builders Association letters
STAFF CONTACT:
Gary Packan, Director, Parks and Recreation
Gary.Packan@cityofdenton.com
Laura Behrens, Grants Administrator
Laira.Behrens@cityofdenton.com
REQUESTOR:
Council requested as a follow-up to a Work Session presentation
PARTICIPATING DEPARTMENTS:
Parks and Recreation and Finance
STAFF TIME TO COMPLETE REPORT:
(2) hours
February 7, 2022
City of Denton
Parks, Recreation and Beautification Board
215 E. McKinney St.
Denton, TX 76201
Members of the Parks, Recreation and Beautification Board:
The Dallas Builders Association (Dallas BA) represents more than 1,100 member businesses who
engage in single- and multifamily residential building, land development and remodeling, as well as
providing materials and real estate services. The Association serves a 10-county service region,
including Denton County.
With advance notice from city staff, Dallas BA has reviewed the draft of the proposed parkland
dedication and park development fees ordinance. The item is scheduled for consideration in the
February 7, 2022, Parks, Recreation and Beautification Board meeting agenda as item PRB22-008.
Dallas BA offers the following concerns and comments.
In summary, Dallas BA is concerned about the impact the significant increase in fees will have on
already challenging new home costs. We are also concerned that the ordinance language does not
include a key exception in applicability and does not give adequate credit for park-like facilities
included in a development. Dallas BA requests clarification regarding park development cost
allocations used in calculating park costs and fees.
Significant Increase in Fees — While Dallas BA can understand that there is an increase in the
Dedication Fee-In-Lieu and the Park Development Fee, due to the fee having not been updated in
recent years, the proposed increases are significantly higher than what builders see in other nearby
cities. The proposed park development fee is more than $1,000 higher than what is seen in other
competitive cities and, at $2,753 per development unit, amounts to an increase of $2,462 per
home. This cost, along with the increase in the fee-in-lieu, will ultimately be paid by the
homebuyers, some of which are already Denton residents. It is important to note that these
increases come at a time when the city is contemplating other fee increases, including roadway
impact fees. Furthermore, these fees, as they are part of the final sales price of the home, actually
cost more over the life of the home mortgage. Given the questions about the economy as we come
through a pandemic, Dallas BA is concerned about the overall impact on Denton’s ability to remain
competitive in the new home market.
Dallas BA recommends lowering the fees and phasing them in over three years to reduce “sticker
shock.”
Replacement Homes Should Be Exempt — Dallas BA requests that “replacement” (home or
structure) be added to the list of activities that have exceptions from applicability of the proposed
ordinance in Section 22-34. These homes, as they are built on the location of an existing home that
5816 West Plano Parkway
Plano, TX 75093 (972) 931-4840 Fax: (972) 267-0426
www.DallasBuilders.org
is removed and replaced by the newly constructed home do not typically result in an increase in the
number of dwelling units. In discussion with city staff, we feel there is an intent to offer this
exception from applicability, however, the term “remodeling” could be seen as inadequate.
Credit for Park-Like Facilities Included in a Development — Dallas BA recommends that more
credit be offered towards the fee-in-lieu of land and park development fees paid by a developer
when park-like facilities are included in a development.
Dallas BA Requests Clarification Regarding the Following Park Development Cost Items:
• The professional service and mobilization total charges of 42% are considerably high.
• Irrigation estimates do not appear to exclude areas covered by paving, buildings/structures,
and detention areas.
Thank you for hearing our concerns. We believe that everyone deserves a roof over their head and
an affordable place to live, and we invite Denton to utilize the Dallas BA as a resource on housing
issues.
Sincerely,
David Lehde,
Director of Government Affairs
Dallas Builders Association
February 28, 2022
Denton City Council
City of Denton
215 E. McKinney St.
Denton, TX 76201
Mayor Hudspeth and Members of the City Council:
The Dallas Builders Association (Dallas BA) represents more than 1,100 member businesses who
engage in single- and multifamily residential building, land development and remodeling, as well as
providing materials and real estate services. The Association serves a 10-county service region,
including Denton County.
With advance notice from city staff, Dallas BA has reviewed the draft of the proposed parkland
dedication and park development fees ordinance. The item is scheduled for a work session
presentation in the March 1, 2022, City Council meeting agenda as item ID 21-2142. Dallas BA
offers the following concerns and comments.
In summary, Dallas BA is concerned about the impact the significant increase in fees will have on
already challenging new home costs. We are also concerned about whether the language gives
adequate credit for park-like facilities included in a private development. Dallas BA requests
clarification regarding park development cost allocations used in calculating park costs and fees.
Significant Increase in Fees — While Dallas BA can understand that there is an increase in the
Dedication Fee-In-Lieu and the Park Development Fee, due to the fee having not been updated in
recent years, the proposed increases are significantly higher than what builders see in other nearby
cities. The proposed park development fee is more than $1,000 higher than what is seen in other
competitive cities and, at $2,753 per development unit, amounts to an increase of $2,462 per
home. This cost, along with the increase in the fee-in-lieu, will ultimately be paid by the
homebuyers, some of which are already Denton residents. It is important to note that these
increases come at a time when the city is contemplating other fee increases, including roadway
impact fees. Furthermore, these fees, as they are part of the final sales price of the home, actually
cost more over the life of the home mortgage. Given the questions about the economy as we come
through a pandemic, Dallas BA is concerned about the overall impact on Denton’s ability to remain
competitive in the new home market.
Dallas BA recommends lowering the fees and phasing them in over three years to reduce “sticker
shock.”
Replacement Homes Should Be Exempt — In a letter to the Parks, Recreation and Beautification
Board for Feb. 7, Dallas BA requested that “replacement” (home or structure) be added to the list
of activities that have exceptions from applicability of the proposed ordinance in Section 22-34.
These homes, as they are built on the location of an existing home that is removed and replaced by
5816 West Plano Parkway
Plano, TX 75093 (972) 931-4840 Fax: (972) 267-0426
www.DallasBuilders.org
the newly constructed home do not typically result in an increase in the number of dwelling units.
In discussion with city staff, we feel there is an intent to offer this exception from applicability,
however, the term “remodeling” could be seen as inadequate.
We feel that the addition of “or to the rebuilding of a structure unless rebuilding results in an
increase in the number of dwelling units” addresses this concern.
Credit for Park-Like Facilities Included in a Development — Dallas BA recommends that more
credit be offered towards the fee-in-lieu of land and park development fees paid by a developer
when park-like facilities are included in a development.
Dallas BA Requests Clarification Regarding the Following Park Development Cost Items:
• The professional service and mobilization total charges of 42% are considerably high.
• Irrigation estimates do not appear to exclude areas covered by paving, buildings/structures,
and detention areas.
Thank you for hearing our concerns. We believe that everyone deserves a roof over their head and
an affordable place to live, and we invite Denton to utilize the Dallas BA as a resource on housing
issues.
Sincerely,
David Lehde,
Director of Government Affairs
Dallas Builders Association