Updated Parkland Dedication
and Park Facilities
Development Impact Fees
City Council
July 21, 2025
Background &
Approach
2 Background
& Approach • Mitigation Fee Act: nexus between
development impacts & fees
• Recent legislation (e.g., AB 602):
square footage & service levelsbased fees
• Consultant: NBS
Defensible Fees
• Comprehensively review development
impact fees (DIF)
• Evaluate opportunities to fund key
infrastructure & facilities that support
future growth while ensuring market
feasibility for development
• Housing Element calls for removal of
governmental constraints
Market Feasibility
Maximize Revenue Facilitate Development
• Financial Impact: development
feasibility by product type
• Market Conditions: assess today’s
market & compare to similar cities
• Consultant: Bay Area Economics
• Fund Infrastructure: necessary to
serve new development
• Evaluate New Fees: consider
planned capital needs
• Constraints: Lessen or remove
governmental constraints to new
development per adopted 2023-
2031 Housing Element
3 Fee Categories
4 Fee Categories
Park Development Fees
Park Land Acquisition
Park Improvement
Quimby Act in-lieu (new)
DFSI* (Streets & Signals)
Interchange Fees
Utility Undergrounding
*Pending Plan Updates
Community & Recreation Centers
Library Facilities & Materials
Fire Protection Facilities
Police Facilities
General Government Facilities
RE-EVALUATED EVALUATED NOT RE-EVALUATED
5 Methodology
6 Nexus / Justification:
• Impact fees can only fund facilities necessary to serve new development • Impact fees must be proportional to the impact created by a development project Methodology
Development Impact Cost Allocation Approach:
• Cost of planned facilities divided by projected demand from new development • Evaluated fees based on maintaining existing level of service, ensuring infrastructure expansion aligns proportionately with development demands • Fees calculated so new development pay its fair share of an integrated system of facilities
7 Market Feasibility
8 City of San Leandro
Developer Underwriting Primer
July 21, 2025
2301 Rosecrans Avenue, Suite 4140
El Segundo, CA 90266
TEL: 424-297-1076 | www.kosmont.com
KOSMONT REALTY | 10
DEVELOPER UNDERWRITING – LOCAL MARKET FACTORS
Developers evaluate a multitude of factors when choosing where to develop including:
Sufficient rent and sales values and positive growth trends Proof of absorption and performance of similar product type Competitive projects in pipeline (supply)
Demographic patterns such as population and income growth (demand) Proximity to employment centers and schools
Quality of physical infrastructure and neighborhood amenities Easy access and transportation options
Resident readiness and appetite for new development
KOSMONT REALTY | 11
DEVELOPER UNDERWRITING – CITY CONTROLLED FACTORS
Factors of interest to a developer that a City can influence or control include:
Zoning – intensity, upzoning potential, land use flexibility, in-lieu options Environmental review – speed, cost sharing, programmatic CEQA review Plan review – development standards, code simplicity / clarity, speed Impact fees – minimal fees, deferral to project completion, exemptions, improvements in-lieu of fees
Affordable housing – density bonus multipliers, financially feasible requirements Political environment – stability, consistency, transparency Built environment – quality, appeal of physical infrastructure and amenities KOSMONT REALTY | 12
DEVELOPER UNDERWRITING – MACRO MARKET FACTORS
Factors impacting development feasibility that are generally determined by the “market” include:
Market valuation – capitalization rates, market rates of return for different assets, value of development upon completion
Access to capital – lender / investor interest, lending ratios, risk tolerance Interest rates – cost of borrowing money during construction and upon completion Inflation – cost of construction materials and construction labor, insurance costs Revenue growth – rent growth, sales price growth
Feasibility Analysis
• Analyzed 10 development prototypes
• Assessed development feasibility in current market conditions • Utilized pro forma models to project development costs, income, & net residual land values for different prototypes
• Residual land value — projected value after covering all development costs Market Feasibility
Development Types
• Non-Residential: Office, retail, hotel, industrial/warehouse, & medical clinic • Residential: Multifamily rentals, senior living, for-sale townhomes, accessory dwelling units (ADUs), & 100% affordable multifamily rental units 13 Residential
• For-Sale Townhomes: Feasible under favorable conditions • Market-Rate Multifamily Rentals: Feasibility challenges due to high development costs, stagnant rental rates, & rising financing costs
• Affordable Multifamily Rentals: Strong feasibility challenges with or without impact fees due to significant financing gaps typical in affordable housing Market Feasibility
• Office, Retail, Hotel, & Medical Office Developments: face financial feasibility challenges in current market even with no City impact fees or fee increase • Industrial developments: marginally feasible in current market New development may still occur if lower-than-typical land or construction costs (e.g. non-residential development projects with identified tenants) 14 Residential Fee Caps: Limit residential fees to 7–10% of total development costs to remain competitive with regional markets • Current development fees (impact, user, regulatory) range from ~8-11% of total development costs
• Evaluated residential impact fees could add approximately 3–4.9% to total development costs for evaluated
prototypes, which could impact development feasibility
Market Feasibility - Recommendation
15 Context and
Considerations
16 Dedication by Subdividing Property Owners
• When land is subdivided for residential development, the developer is required t:
• Dedicate a portion of the property for public parkland or • Pay in-lieu fees the City can use to acquire or improve parks elsewhere Creation of New Parks
Acquisition by the City
• The City may purchase land directly to create new parks or expand existing ones. • Funding sources can include:
• Development Impact Fees
• State and federal grants
• Local bond measures or general funds
17 Repurposing Other Public or Surplus Land
• The City can convert surplus municipal land or other public agency property into parks. • Includes key recommendations to:
o Fund and construct high-priority amenities to existing parks, focusing on the most requested or underserved
features.
o Fund and implement Park-by-Park improvements to
address specific needs and deficiencies across the park system.
o Create a diverse funding strategy for the capital
improvements identified in the plan.
o Acquire parkland that meaningfully enhances park
experiences and improves accessibility for all residents. 18 Recreation & Parks
Master Plan (2025)
Development Trends
19 0
50 100
150
200
250
300
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Units Constructed
2015-2025
Very-Low Income Low-Income Moderate Income Above Moderate Income Centro Callan
Park In-Lieu Fee Revenue Trends
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25
Park In-Lieu Fee Revenue
FY15 – FY25
Centro Callan
20 Too-high impact fees further reduce development feasibility Reduced development = fewer fees/revenue
Considerations
Cannot accurately
predict level of new
development or
Impact Fee revenue
Impact Fees only for new
facilities or major capital
projects – not ongoing
maintenance
One- time, highly
regulated revenue
vs.
ongoing revenue from
new development
21 Recommendations
22 Re
-evaluate fees as market conditions change
• Balance infrastructure funding with market feasibility • Right-size parkland dedication requirements and Park Facilities Development Impact Fees • Market conditions not supportive of new DIFs • Prioritize improvements to existing parks (75%) vs. parkland acquisition (25%)
• Create new Fee Waiver Program • Affordable Housing • ADUs • Consider new Public Art Program Recommendations
23 Current and Proposed Park Fees
Unit Size Park Land
Acquisition
Park
Improvements Total
<550 sf 1,513 4,539 6,052
550-750 sf 1,891 5,674 7,565
751 - 1,150 sf 2,900 8,700 11,600
1,151-1,650 sf 4,035 12,105 16,140
1,651-1,950 sf 5,170 15,509 20,679
>1,950 sf 6,431 19,292 25,723
Unit Type Park Land
Acquisition
Park
Improvements Total
Single-Family 17,670 3,009 20,679
Multi-Family 15,444 2,630 18,074
Special Unit 7,723 1,315 9,038
ADU > 750 sf 6,693 1,140 7,833
Current Proposed
24 Sample Project Comparison
25 -
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
497-Unit MF Avg
Unit 462 sf
197-Unit MF Avg
Unit 652 sf
180-Unit MF Avg
Unit 943 sf
39-Unit MF Avg
Unit 1,913 sf
18-Unit SF Avg
Unit 2,065 sf
Current Fee Proposed Fee Alameda Concord Dublin Hayward Walnut Creek • Current Fees:
• Multi-Unit: $18,074 / unit
• Single-Unit Fee: $20,679 / unit
• Proposed Fee Waiver:
• Non-Profit Affordable Development: 100% of Park Impact Fees • For-Profit Affordable Development or Inclusionary Units: 50% of Park Impact Fees
Proposed Fee Waiver Program
Accessory Dwelling Units (ADUs)
• Current Fees
• <750 sf: No Fees per State Law
• >750 sf: Fees proportional to main unit
• Proposed Fee Waiver: 100% of Park Impact Fees and DFSI (Streets & Signals) Affordable Housing Developments
26 Fee Waiver
Program
01 02
03 04
50-100% park impact fee waivers reductions for qualified development types of and 100% waivers for Traffic Impacts Hayward
100% waivers of affordable housing fee, transportation
development fee, and waivers on a case-by-case basis
Ple a s a nt on
Up to 100% waiver on all fees where projects are at or below 80% of area median income, with a 55-year restriction
San Ramon
Tiered waiver reductions for qualified development types of park impact fees and fee reductions of Traffic Impact Fees varying on location
Re dwood Cit y
05 100% waivers on certain taxes, 50% reduction on the Park Impact Fee
San J ose
• Feasibility Challenges: Substantial
financing gaps for affordable housing in
current market, even without impact fees.
• Recommendations: BAE recommends
exploring impact fee waiver program for
affordable housing, which could help
reduce financing gaps and make projects
more feasible.
27 Program details would be developed after receiving Council direction • Public Art Master Plan calls for
establishing an art obligation
for private development
projects
• Opportunity to establish a new
art requirement without
negatively affecting
development feasibility
Public Art Program
Art In Lieu Fee
Public Art Program could include optional
in-lieu fee that could be used to fund art in
public locations
Requirement set as a
percent of construction
value – typically 1%
28 On May 28, 2015, the Finance Committee:
• Reviewed the proposed fee updates and fee waiver program and recommended advancing the discussion to the full Council;
• Requested additional context on market considerations; and • Expressed support for creating a public art requirement for new development projects.
Fina nc e Commit t e e Re vie w
29 Staff recommends the Council conduct a public hearing, receive public comment, and adopt:
• An Ordinance amending SLMC Section 7-1-815 to update the City’s parkland dedication requirements for residential subdivisions;
• Adopt a Resolution amending Administrative Code Title 8, Chapter 8 to update the Park Land Acquisition and Park Improvement Fees, establish fee waivers for ADUs and affordable housing units, and approve the Park Development Impact Fee Study and Parks Capital Improvement Plan; and
• A Resolution exempting ADUs from the Development Fees for Street Improvements Staff also seeks Council direction on preparation of a Public Art requirement for new development Re c omme nda t ion
30