Carmel weighs 64 percent increase to park impact fees charged to builders

The Carmel City Council is mulling a 64% increase in the park fee it charges residential real estate developers that the city says would help pay for future land acquisition, a park expansion and improvements along the White River.

The city currently charges a park impact fee of $2,997 and has proposed increasing the fee—which is paid by those building new homes in the city—to $4,882.

The premise of the fee is to ensure new residents—who might be moving to the city in part because of its parks—contribute fairly to the system.

The city has charged a fee on new residential development since 2001. If approved, the higher fee would take effect June 1.

Funds generated by the fee can’t be used to pay for park maintenance or operations. Instead, the funds are used to expand recreational opportunities. Recently, the city’s parks department has used the funding to expand West Park and build a new pavilion there.

The new funding created by the increased fee could be used to continue developing West Park; to acquire new parkland in northwest Carmel, which is growing quickly; and to build an ecological center along the White River while enhancing access to it, Michael Klitzing, director of the Carmel-Clay Parks and Recreation Department, recently told the city council.

“The design is to ensure new residents coming into the community are contributing to the quality park system we have,” he said. “We’ve created a community where people want to live, work and play. That’s demonstrated by the fact that we had last year alone over 4.2 million park users and program participants.”

But the increase is a concern to builders, who have to pay the fee per dwelling. For multifamily developments, the fee is charged per unit.

Kate Collins, director of government affairs for the Builders Association of Greater Indianapolis, has asked the Carmel City Council to consider phasing in the increase to give developers time to plan for the expense. She called the increase significant compared with other communities. Neighboring Fishers, for example, charges $1,667 per home.

“As a concept, we certainly support impact fees,” she said during a public hearing Monday night on the increase. “We know that new development puts a burden on your infrastructure, and we want to help alleviate that to the best we can.”

City councilors will debate the fee increase during upcoming finance committee meetings before the proposal returns to the full city council. It already has received a unanimous favorable recommendation from the Plan Commission, which heard the proposal first.

Councilors asked for a breakdown of the impact fees Carmel charges compared with surrounding communities.

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4 thoughts on “Carmel weighs 64 percent increase to park impact fees charged to builders

  1. As a person who uses public parks on an almost daily basis, I am in favor of increasing the size and number of parks. I truly believe it is incumbent upon us to ensure future generations will have green space and park lands to enjoy. That said, as someone who has been in multifamily development, a 64% increase in impact fees is a death knell of future multifamily development. If Carmel thought they had a lack of affordable housing before, they can think again. Frankly, an increase of this magnitude seems almost designed to mask a subtle (or not so subtle) effort to keep apartment residents out of their fair city.

  2. Silly me. I always thought new dwellings created property taxes, which paid for parks and recreation. By the way, who does Carmel think will end up paying this new impact fee? It will be the new property owners, who will get double-dinged with this added cost of building plus their property taxes. What an ill-conceived and short sighted view.

    1. Smith F – you took the words right out of my mouth.

      Plus, if Carmel is looking for funds, why don’t we use some of the associated “art” roundabout display costs and transfer the money to parks and recreation. Some of the latest “art” displays for our roundabouts have been in poor taste and poor use of public funds…leave a lot to be desired.