Carmel parks officials frustrated by impact fee waivers increasingly benefiting Carmel Redevelopment Commission projects

In the last decade, Carmel’s Board of Public Works has agreed to waive more than $13 million in park impact fees charged to developers that would have helped the city expand its park system in underserved areas to accommodate population growth.

Next week, the BPW will consider essentially doubling that amount in one meeting at the request of the Carmel Redevelopment Commission.

The agenda for the Nov. 15 meeting includes several resolutions requesting the park impact fee – $4,882 for every dwelling unit – be waived for five CRC projects in lieu of developers creating urban park amenities, such as outdoor plazas and gathering spaces. Without the waiver, the fees must be used to develop parks in underserved areas of the city as identified by Carmel Clay Parks & Recreation.

In recent years, the number and amount of park impact fee waivers has increased, leaving CCPR without funds it expected to have to acquire and develop park land. The BPW has already approved a record $3.8 million in park fee waivers this year, and more than $10 million in additional waived fees are on its Nov. 15 agenda.

CCPR Director Michael Klitzing said he is not typically involved in discussions the CRC has with developers regarding park impact fees, and by the time he hears of waiver requests, negotiations are essentially complete. He had not heard of the five waiver requests on the Nov. 15 BPW agenda until contacted by Current.

“It’s frustrating,” he said. “It feels like we’re just getting further behind.”

Klitzing said the first phase of development of either Bear Creek Park in northwest Carmel or Thomas Marcuccilli Nature Park in northeast Carmel would likely have been completed by now if the funds hadn’t been reallocated.

“As of today, I have zero funds available for either of these parks,” he said. “It definitely is a little bit demoralizing as we’ve tried to implement the comprehensive master plan, which is based directly on the input we’ve received from the community.”

CRC Director Henry Mestetsky said, however, that whether the impact fees are waived or not, new development generates funding for park amenities, whether it goes directly to CCPR or flows through the CRC.

“Regardless of which city department is hiring world-class designers, the end result is the city is investing in parks,” Mestetsky said. “The suburban or urban location of the park merely determines which city staff lead the project, though everyone works together.”

Mestetsky also said the redevelopment projects wouldn’t have occurred at all – and thus, the park impact fees for those projects wouldn’t exist – without the CRC entering into public-private partnerships with developers.

A full agenda

The BPW tabled a single resolution at its Nov. 1 meeting seeking a park impact fee waiver of $4.7 million for Penn One Eleven, a $700 million mixed-use development with nearly 1,000 dwelling units planned at 111th and Pennsylvania streets. That item remains on the agenda for the Nov. 15 meeting, along with waivers of $4.1 million for Gramercy Carmel and $1.4 million for Old Meridian Apartments. Waivers are also requested for Hamilton Crossing and Midtown Blocks 4 and 5, but the number of dwelling units and total amount of the fee to be waived has not been announced for those projects.

The BPW is comprised of Mayor Jim Brainard and two other members he appoints. When asked why so many impact fee waivers are on a single BPW agenda, Brainard, who is traveling overseas, stated in an email that “many projects are coming forward because Carmel’s economy is very good and development efforts to build downtown have succeeded.”

Brainard will leave office when his term expires at the end of the year, and his successor, City Councilor Sue Finkam, indicated at an Oct. 2 candidate debate that she supports park impact fees remaining with CCPR. She did not respond to a request for comment as of press time.

Brainard stated that years ago the parks board indicated it did not want to build urban parks, so the CRC became responsible for developing them. The CRC has worked on urban park projects that include the public plaza in Sophia Square, splash pad near Anthony’s Chophouse, Carter Green, Veterans Plaza and many other public spaces.

“The CRC has spent tens of millions (of dollars) more on urban parks than it has received in park fees,” Brainard stated. “It is critically important urban parks continue to be built in our urban core.”

Mestetsky said the public-private partnerships frequently lead to cost savings for the city when developers agree to maintain the urban spaces instead of CCPR or city departments.

Ways to waive impact fees 

Since implementing the park impact fee in 1996, the parks board has had authority to waive it but has only done so one time, approving a credit of $75,560 in 2021 for the developer of Albany Village. In that instance, the developer instead agreed to construct a multi-purpose trail, install bike racks and benches and donate more than 9 acres for the Bear Creek Park Greenway. The cost of those improvements is more than $158,000, not including the value of the donated land, according to CCPR.

The remainder of the impact fees – $12.9 million – have been waived by the BPW. The Carmel City Council approved an ordinance in 2010 giving the BPW the authority to grant park impact fee waivers.

Rich Taylor, CCPR board president and at-large city councilor-elect, said philosophically, he believes only the parks board should have authority to grant the waivers. At the October CCPR board meeting, he said he has been in discussions with city councilors about amending city code to put authority to waive park impact fees solely in the hands of the parks board.

City code states that impact fees can be waived for developers that include “parks and recreation infrastructure” as part of a project, and state law requires that infrastructure to benefit the community – not just the development. Previous examples in Carmel include the plaza southeast of the Mezz near the Monon Greenway and construction of the public areas along Monon Boulevard, a project Klitzing said is widely used by the entire community and thus a good fit for impact free credit waivers.

But other projects, such as the plaza within The Proscenium, are not as easy to access as a park, Klitzing said, and many Carmel residents may not be aware they are public amenities.

“It’s not a black-and-white situation,” he said. “The question is, what do community leaders ultimately view as the wisest and best use of those dollars? Is it to create spaces that – in some cases at least – the developers might want to provide anyway to ensure they can attract residents? Or is it better to use (the funds) for places that are truly underserved areas within the community?”

Specific projects are not identified for some of the BPW-approved waivers. Those cases have deposited a total of $4.8 million into a fund controlled by the Carmel Redevelopment Commission fund.

The parks board is set to discuss the impact of the park fee waivers at its Nov. 14 meeting.