Subdivision Fees In Lieu of Parkland
The New York Court of Appeals in Twin Lakes Development Corp. v. Town of Monroe, 1 N.Y.3rd 98, 769 N.Y.S. 2d 445 (November 20, 2003), upheld the in-lieu of parkland subdivision fees of Town Law § 277(4)(c) against constitutional challenges raised by the plaintiff developer. In 1999, plaintiff applied to the Town Planning Board for approval to develop 22 residential lots on its property. Pursuant to Town Law § 277 and provisions of the Town Code, the Town imposed a $1,500 per-lot recreational fee as a condition of approval, for a total of $33,000 Section 277 provides:
4. Reservation of parkland on subdivision plats containing residential units. (a) Before the planning board may approve a subdivision plat containing residential units, such subdivision plat shall also show, when required by such board, a park or parks suitably located for playground or other recreational purposes.
(b) Land for park, playground or other recreational purposes may not be required until the planning board has made a finding that a proper case exists for requiring that a park or parks be suitably located for playgrounds or other recreational purposes within the town. Such findings shall include an evaluation of the present and anticipated future needs for park and recreational facilities in the town based on projected population growth to which the particular subdivision plat will contribute.
(c) In the event the planning board makes a finding pursuant to paragraph (b) of this subdivision that the proposed subdivision plat presents a proper case for requiring a park or parks suitably located for playgrounds or other recreational purposes, but that a suitable park or parks of adequate size to meet the requirement cannot be properly located on such subdivision plat, the planning board may require a sum of money in lieu thereof, in an amount to be established by the town board. In making such determination of suitability, the board shall assess the size and suitability of lands shown on the subdivision plat which could be possible locations for park or recreational facilities, as well as practical factors including whether there is a need for additional facilities in the immediate neighborhood. Any monies required by the planning board in lieu of land for park, playground or other recreational purposes, pursuant to the provisions of this section, shall be deposited into a trust fund to be used by the town exclusively for park, playground or other recreational purposes, including the acquisition of property.
The plaintiff challenged imposition of the $33,000 fee as an unconstitutional taking of its property under the Fifth Amendment to the United States Constitution which provides "...nor shall private property be taken for public use without just compensation." Plaintiff argued that the per-lot recreational fee constituted an unconstitutional taking because the amount was not based on an "individual assessment" of the recreational needs generated by its subdivision development plan, and was therefore not "roughly proportional" to those needs.
The Court of Appeals disagreed, basing its decision on precedent established by the United States Supreme Court which has developed a standard for evaluating takings claims arising in the "context of exactions–land-use decisions conditioning approval of development on the dedication of property to public use" (citations omitted). The Court of Appeals indicated: "[a] reviewing court must assess whether an ‘essential nexus’ exists between the ‘legitimate state interest’ advanced as the justification for the restriction and the condition imposed upon the property owner (citations omitted)...Where such nexus is present, the ‘degree of the exactions demanded’ must have ‘the required relationship to the projected impact of [the applicant’s] proposed development (Dolan v. City of Tigard, 512 U.S. 374, 114 S. Ct. 2309 (1994). In Dolan, the U.S. Supreme Court examined whether there were sufficient findings by the municipality in the record to condition the applicant’s permit on a dedication of land in a flood zone. Following a review of standards the states have applied, "...the court determined that a ‘rough proportionality’ test would ‘best encapsulate’ what we hold to be the requirement of the Fifth Amendment...While ‘[n]o precise mathematical calculation is required’ the dedication must be ‘related both in nature and extent to the impact of the proposed development" (citations omitted).
The Court of Appeals determined that the Town’s $1,500. per-lot fee did not constitute a taking because (1) the Town made explicit findings that there was a relationship between the need for additional recreational facilities in light of continued subdivision development and the "upward spiraling land costs" would worsen the problem; and (2) the statute authorized the fees and required them to be placed in a trust fund for recreational purposes. Together these established the essential nexus between the stated condition and the fee. In addition, the Town made findings connecting the applicant’s development to the need for additional parklands, thus justifying the fee. These findings satisfied the statute and reflected the individualized assessment of the project’s impact as required by Dolan. Therefore, the lot fee charged plaintiff was roughly proportional to the impacts of the development on the Town’s recreational needs.
The Court also rejected the plaintiff’s claims that its due process rights had been violated because the fee was imposed without a hearing to review its reasonableness. The Court ruled that the fee was neither a special assessment nor a tax because the requirement that it be paid by developers is generally applicable to any developer seeking to subdivide his property. Any claim by plaintiff that it failed to receive notice of the fee was found to be meritless, as it was contained in the Town Code, was adopted through a public legislative process and is revisited each year.
In addition, the Court sustained the Town’s imposition of fees it incurred in association with hiring outside consultants to assist in the review of the plaintiff’s application. Such fees were provided for in the Town Code, were reasonable and amounted only to the costs incurred by the Town. The Town also considered the fees as subject to audit provisions in the Town Law, and plaintiff never requested an audit of the fees.
The Secretary of State is authorized to provide assistance to local governments and general information to the public pursuant to New York State Executive Law, Article 6-B. The information in this Memorandum is provided pursuant to that authorization, but is informal only and should not be construed as providing legal advice. Local governments and other persons or entities should consult with their own legal counsel for legal advice.