Changing Interpretations of the Nexus and Developer Credit Elements in Parkland Dedication Ordinances

Abstract

Parkland dedication is receiving increasing attention from cities because it provides capital funding without raising taxes on existing residents. Its parameters are dependent on interpretation of court rulings and in the past decade these have changed in ways that substantially enhance the potential of these revenues for local governments. The changes invariably become the focus of controversies between developers who resist paying the dedication fees and elected officials who are charged with safeguarding the interest of taxpayers. This paper addresses two central areas of controversy: Changes in interpretations of what constitutes a “nexus”; and the magnitude and characteristics of credits given to developers who provide park amenities in their projects. The “essential nexus” principle requires there to be a reasonably proximate connection between facilities developed with the resources derived from a dedication and the residents who will reside in the development providing those resources. A recent census of the 73 cities in Texas that have parkland dedication ordinances was analyzed and the relative merits of five different approaches they have used for defining service areas is discussed: a single city-wide zone, pre-determined zones; reasonable proximity; specified distance; and a hybrid model of distance/pre-established zones. Among the 73 ordinances reviewed, approximately half believed the most equitable ratio for crediting developers for park amenities they provided within subdivisions was 50%. Among the others, maximum credit varied from 0% to 100%. The relative merits are evaluated, together with the extent to which floodplain land and retention ponds are acceptable to meet a dedication requirement.