In 2022, the Minnesota Court of Appeals decided Puce v. City of Burnsville, 971 N.W.2d 285 (Minn. App. 2022), a case involving municipal park dedication fees under Minn. Stat. § 462.358, subd. 2b & 2c. Under the state statute cities may impose park dedication fees instead of requiring a dedication of a reasonable portion of the buildable land for public use. Here Almir Puce applied to the City of Burnsville to redevelop his residential property into commercial property, and it ultimately imposed an $11,700 park dedication fee.
Puce filed a lawsuit, claiming in part that the city’s application of its ordinance did not comply with the subdivision statute and had resulted in an unconstitutional taking of his property in violation of state and federal constitutional provisions. The district court ruled in the city’s favor, upholding the park dedication fee.
The Minnesota Court of Appeals reversed the district court’s decision, concluding that the city’s imposition of the park dedication fee did not comply with the subdivision statute, based on the lack of the city’s “individualized determination” of the proposed development’s impact on city parkland. The Court of Appeals ruled that a city may impose a park dedication fee only if it first reasonably determines that it will need to acquire and develop or improve a reasonable portion of parkland because of the development’s approval. The Court of Appeals also ruled that there must be a rough proportionality between the fee and the need for the acquisition and development or improvement of parkland due to the proposed development, as demonstrated by an individualized determination that the fee is related both in nature and extent to the proposed development’s impact.
Critically, the City of Burnsville used a dedication fee formula in arriving at the figure it ultimately imposed, and the Court of Appeals holding seemed to suggest dedication formulas (used by countless municipalities throughout the state) were invalid and per se violative of the statue.
On September 28, 2023, the Minnesota Supreme Court reversed the Court of Appeals decision holding:
The city’s park dedication fee has an “essential nexus,” as required by Minnesota Statutes section 462.358, subdivision 2c(a), because there is some logical connection between the imposed park dedication fee and the municipal purpose sought to be achieved by the fee, and has a “rough proportionality” as required by the same statute, because the city made an individualized determination that the fee is related to the impact of the proposed development.
The city complied with Minnesota Statutes section 462.358, subdivision 2b(e) because the city made a reasonable determination that it would need 5 percent of the gross land area of the development to maintain open space in proportion to city projections.
The quick take-away is park dedication fee formulas are valid, but it is not a free pass to simply name a number. There needs to be some consideration as to how a city gets there.
If you have any questions regarding how your local government can comply with the Supreme Court’s decision in Puce, please do not hesitate to reach out to one of the attorneys who represented the City before the Supreme Court, Paul Reuvers or Andrew Wolf.