Minneapolis moves to adopt parkland dedication ordinance

Our core cities look to redevelop key parts of their riverfront, and parkland dedication fees can help advance the acquisition of parkland and urban redevelopment alike. In recent months, Minneapolis has put renewed emphasis on transforming its industrial riverfront north of downtown into a mixed-use residential community. A key economic driver and focus for that redevelopment will be an expanded network of riverfront parks and public spaces running from downtown to the city limits.

Finding the funding to build such parks can be a major challenge for cities. It is true that parks like those proposed along the riverfront often pay for themselves over a couple decades. They do that by significantly increasing adjacent property values and therefore property tax receipts from the properties around the park. And yet, without a clear revenue stream for park development, even the most promising plans for parks and revitalization can sit idle for years, awaiting that initial boost of funding.

Enter Minneapolis’ parkland dedication ordinance. A parkland dedication ordinance ties the funding of the new parks to the beneficiaries of the new park space: developers and the occupants of new projects developers build. City Council members approved a framework for their ordinance on February 1, 2008.

Under Minneapolis’ ordinance, developers will be required to contribute to the City’s park system in one of two ways. The default option is that developers are asked to dedicate a specific percentage of any land being redeveloped for use as a public park. If the City determines there is not suitable land within the development for parkland, the City then requires an equivalent one-time cash payment be made to develop park facilities in the general vicinity. Funding from several such developments can then be pooled to create new park spaces.

Minneapolis’ park dedication ordinance will require donation of suitable land or a cash payment of up to $2,000 per new housing unit (the specific formula is being refined). To ensure the ordinance doesn’t inhibit the creation of new affordable housing units, the ordinance will exempt any affordable housing project that receives local, county or federal money and serves people at or below 50% of the metro median income.

Despite the extra costs, many developers have come to embrace such a system. That’s because many of their development projects only become viable when the City is able to simultaneously make adjacent investments in parks and public spaces. So as cutbacks have reduced the ability of local governments to fund parks, that can stall both park creation and urban redevelopment.

Minneapolis’ ordinance is hardly unique. Dozens of cities have adopted similar ordinances. But until recently, the ordinances have been confined largely to suburban areas where small cities faced big strains in accommodating new growth. That all changed when the urban housing boom opened up the eyes of civic leaders to new ways to spur urban redevelopment.

Across the river in Saint Paul, a park dedication ordinance was adopted last March. Like its neighbor to the west, Saint Paul is working to redevelop large tracts of underutilized land along the river and elsewhere in the city, and saw the benefit in a parkland dedication ordinance. While the Minneapolis ordinance has not been finalized, initial indications suggest that Minneapolis’ ordinance will be more aggressive in providing funds than Saint Paul’s. Moreover, studies suggest both cities would be charging less than the metrowide average.

Finalizing Minneapolis’ park dedication ordinance will require some unique coordination, because the Minneapolis Park and Recreation Board is an entirely separate unit of government from the City itself. But the step taken by the City Council on February 1 is yet another promising sign that Minneapolis leaders are getting serious about riverfront redevelopment, parks and open space.