The debate over whether or not Austin will require commercial developers to pay fees to support public parks will continue after Mayor Steve Adler pulled the item from City Council’s Sept. 1 consent agenda.
The mayor pulled three agenda items — involving commercial as well as existing residential parkland dedication fees, plus a public comment period — for additional changes and corrections.
The fees are expected to be reconsidered at a future meeting, along with other hot-button issues, like a rezoning request to build a major mixed-use hub at the old home of the Austin-American Statesman. Council’s next meetings are scheduled for Sept. 15 and Sept. 29.
The controversial commercial parkland fee ordinance would expand the city code to require parkland dedication for commercial developments including office, retail, industrial and hotel projects. It is being sponsored by Adler and Council Members Natasha Harper-Madison, José Vela and Sabino Renteria.
The residential fee, which is in some cases set to more than double following a 120% increase the previous year, is also a key concern for homebuilders.
This marks another hold in the process after Council postponed consideration on Aug. 17, when Adler told Austin Business Journal that more time was needed to focus on the considered fees.
The Austin Planning Commission on Aug. 9 endorsed an amended version of the proposed fee structure in an 8-2 vote, with commissioners Greg Anderson and Jeffrey Thompson opposed.
Proponents of the fees say they are needed to keep up investment in public open spaces as Austin grows by leaps and bounds. The commercial fee is being pursued to help compensate for the park system’s use by the 36% of the city’s workforce that lives outside Austin, according to an Aug. 10 city memo.
But critics worry about adding more costs to the development process, when real estate prices and other input costs are already skyrocketing.
The proposed commercial fee uses a revised version of the residential dedication formula based on providing 9.4 acres of parkland per every 1,000 new users of the parks system.
It would be divided into two items: a fee-in-lieu would be based on the cost to purchase new land while a development fee would be calculated based on the cost of developing sites. The funds gathered from the fee-in-lieu would be used by the city to purchase new parkland while the development fee would go toward expanding access to parkland or providing additional infrastructure. As proposed, funds from the fee-in-lieu could be used for land improvements following a year-long period — a stipulation set in place to ensure that the acquisition of new parkland is considered in the process.
The amended commercial fee structure endorsed by the Planning Commission would exclude developments smaller than 5,000 square feet as well as arts venues and live music venues that fall in line with the city’s long-term efforts to protect its arts-related establishments.
The residential fee, opposed by Harper-Madison and Home Builders Association of Greater Austin President Scott Turner, would most significantly impact low-density projects with fewer than six residential units per acre. The average residential parkland dedication fee for those projects would rise from $5,663.67 to $11,572.88 per unit.
Medium-density projects with six to 12 units would see an increase from an average of $4,450.03 to $9,092.97 per unit and high-density projects, representing more than 12 residential units per acre, would see an increase from $3,438.66 to $7,026.39 per unit.
The commercial fee is expected to generate about $4 million in annual revenue for the parks department. For the coming fiscal year, the department expects to collect more than $25 million from residential fees.
Austin Business Journal and San Antonio Business Journal will host the 2022 Austin-San Antonio Growth Summit.
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