On July 5, 2017 the City Council discussed changes to the park dedication fees. The park dedication fees have not been reviewed or adjusted since 2005. Revisions to multi-family development park dedication fees were approved however the City Council requested further analysis of the proposed commercial/industrial park dedication fee. The recommendation was to increase the current fee of $6,930/acre to $11,000/acre.

The process for changing the commercial/industrial fee utilized since 2004 states: Commercial/Industrial increases are based on the average increase of the single family and multi-family changes. Since changes were not recommended for single family and basic multi-family developments, the fee of $11,000 was obtained by using a calculation the city used many years ago to establish the commercial/industrial fee.

Two options for calculating the park dedication fee for commercial/industrial were evaluated.

Option 1: Utilizing the current formula single family and duplex are based on the average land value/25 units per acre and multi-family and apartments are based on the average land value/30 units per acre. The average land value calculated for 2016 was $195,361.80/acre. Putting this into the formula:

$195,361.80/25 = $7,814.47 Single Family (rate based on formula at current land prices)

$195,361.80/30 = $6,512.06 Multi-Family (rate based on formula at current land prices)

Current Fees $5,340 Single Family, $4,450 Multi-family

$7,814.47 - $5,340 = $2,474.47

$6,512.06 - $4,450 = $2,062.06        Average difference  = $2,268.27 + $6,930 =  $9,198.27

Option 2: Percentage of land value based on comparable cities percentages.

$195,361.80 * 4% = $7,814.47

$195,361.80 * 5% = $9,768.09

$195,361.80 * 7% = $13,675.33

Included in the packet is the comparable cities park dedication fees as well as a study completed by Roseville in December of 2016 for a majority of metropolitan cities. Currently Shakopee is at the higher end  of fees for single family and multi-family developments. Therefore, an increase in the fees as option 1 would indicate for single family and multi-family developments is not recommended. Shakopee is at the lower end for commercial industrial fees. Based on the two options reviewed staff is recommending an average of Option 1 and 5% in Option 2 rounded to the nearest 100 of $9,500/acre. The recommendation of $9,500 established the city's commercial/industrial rate in line with surrounding communities and is based on today's land values.