Suburb fights ruling axing ‘capricious’ park fees charged to developer
Minnesota cities share plenty of the blame for driving up the cost of new housing subdivisions and commercial developments through an ever-increasing multitude of fees ultimately passed on to buyers. One of the go-to charges tacked on to the price tag involves charging fees and requiring land to be set aside for parks and green space.
But a recent Minnesota Court of Appeals ruling against the suburb of Burnsville threatens to undermine what some might consider a cash cow, according to Southwest Media.
The appeals court found Burnsville illegally imposed a parkland dedication fee on a commercial developer without reasonably determining the city needed to acquire, develop or improve parkland as a result of the development.
While the lawsuit brought against the city in 2019 pertains to one development, the city’s use of a formula to calculate parkland dedication fees for all commercial and industrial developments presents a broader issue.
Carissa Larsen, the city’s communications and community engagement director, said the ruling, if it stands, would create “significant procedural barriers” to charging parkland dedication fees on commercial developments and redevelopments.
But the attorney representing the business owner who challenged the city’s assessment minced no words in characterizing his view of the process. Neither did the judges on the court of appeals.
In an interview earlier this month, Minneapolis-based attorney Stephen Cooper — who brought the lawsuit against the city — said Burnsville used parkland dedication fees as a “fundraising campaign” to cover city expenses rather than as a mechanism for collecting reimbursement for park costs incurred through growth and development.
Cooper’s client, Almir Puce, owns the roughly two-acre commercial property at 2208 Old County Road 34 place.
When Puce sought to open an automobile shop and bakery, the city ordered him to pay a $37,804 parkland dedication fee before later knocking the fee down to $11,700. A ruling in Dakota County District Court upheld the fee until the recent appeals court’s reversal.
The appeals court ruling voided the charge the city sought to impose, calling the fee “unreasonable, arbitrary and capricious.”
The court’s frank language in the ruling may serve as a warning shot over a common tactic used by cities well beyond Burnsville.
“Burnsville, like the majority of cities in Minnesota, relies on these fees to construct parks and trails to accommodate the growth in use of those facilities caused by development, and the inability to collect those fees from new development shifts the financial burden to the general taxpayers of the community,” Larsen wrote in an email to Southwest News Media.
Burnsville clearly sees the court’s decision as a threat to a system that’s largely gone unchallenged until now. There’s no guarantee the state supreme court will take the case. But with so much at stake, Burnsville officials aren’t taking any chances in what the business owner’s lawyer Stephen Cooper calls an open-and-shut case.
“For them to persist in their efforts to act in a manner that is ignoring the law is disturbing because it makes you wonder how much they think they are supposed to follow the law,” he said.
“It’s such a straightforward, direct interpretation of what the law says — it was not a tricky decision,” he added.