MN Court of Appeals Holds Municipality Lacked Legal Basis to Impose Park-Dedication Fee Absent Determination of a Need to Acquire and Develop or Improve Land as a Result of Approving Permit 

This post was authored by Matthew Loescher, Esq.

Beginning in 2018, Puce sought to redevelop the property for commercial use, in three phases. For the first phase, Puce planned to operate an automobile dealership and a bakery in the existing structure. In the second phase, Puce planned to build a new building for an automobile repair shop. In the third and final phase, he planned to improve part of the property to create an open storage lot. In May 2018, Puce submitted an application to the City of Burnsville seeking approval of a preliminary and final plat of the property, a conditional use permit (CUP), and variances related to signage and land grading. In mid-January 2019, the City’s planning commission reviewed Puce’s application and recommended approval of the plat, approval of a CUP, and denial of the variances, subject to 17 conditions, including the payment of a park-dedication fee in the amount of $37,804. Puce objected to the City’s imposition of a park-dedication fee as well as the amount of the fee. He asked the City to waive the fee on the ground that his planned automobile dealership and bakery would not result in a need for more parkland or park services, but the city council denied this request. Following a bench trial, the district court granted judgment for the City of Burnsville, affirming imposition of fee.

On appeal, Puce contended that that the City’s imposition of a park-dedication fee violated subdivision 2b(e) of section 462.358 as the City did not make “any individualized assessment of what, if any, new park need was created by granting” his development application. Puce further claimed that the City did not have any evidence that its approval of his development application would result in an increase in expenditures on parks. In response, the City argued that any development would inevitably cause an “influx” of people and, “logically, an influx to the area will increase the use of the nearby public facilities, parks, and trails.” Here, the record reflected that the City imposed a park-dedication fee simply by applying its five-percent formula, but failed to cite any other facts in the record to indicate that the City’s approval of Puce’s application actually would cause an identifiable increase in park usage and, thereby, create a need for new or improved parkland. Thus, the court held that the City’s decision to impose a park-dedication fee did not have a proper factual basis, and the City therefore violated subdivision 2b(e) of section 462.358 when it imposed a park-dedication fee on Puce.

Similarly, the court determined there was not a rough proportionality between the park’s dedication fee and any need for the acquisition and development or improvement of parkland as a result of the City’s approval of Puce’s development application. As such, the court held that the City violated subdivision 2c(a) of section 462.358 when it imposed a park-dedication fee on Puce’s development application, and the City’s decision to impose an $11,700 park-dedication fee on Puce was unreasonable, arbitrary, and capricious.

Puce v City of Burnsville, 971 N.W. 2d 285 (2/7/2022)