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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowThe Carmel City Council on Monday night unanimously approved an increase to the fee it charges to residential real estate developers to help pay for park expansion and improvements.
The city currently charges a park impact fee of $4,882 per new residential dwelling unit. The new park impact fee will be $5,425 when it takes effect Jan. 1, 2025. The fee will increase 11.13% each year through 2029, meaning the fee will be $6,029 in 2026, $6,700 in 2027, $7,446 in 2028, and $8,275 in 2029.
Carmel has the highest park impact fee among its peer communities in the northern suburbs of Indianapolis, which include Fishers ($3,492), Westfield ($3,485), Noblesville ($2,118) and Zionsville ($2,045).
“We don’t make any apologies for the rates that we’re increasing,” Carmel Clay Parks & Recreation Director Michael Klitzing told councilors. “The amount of investment that this community has made in parks and recreation is incomparable to any of our other communities. It’s really incomparable to almost all communities within the country.”
In separate votes, councilors voted 9-0 to pass both the new park impact fee and a zone improvement plan, which by state law directs which areas will receive the fees.
Park areas that will receive impact fee funds are Bear Creek Park, West Park, the Japanese Garden, the Chinese Garden, Carmel’s central core, Thomas Marcuccilli Nature Park and the White River corridor.
Klitzing estimated the infrastructure costs funded by park impact fees for the seven areas between 2025 and 2034 will be about $75.6 million, including accounting for construction contingencies.
He said the total asset value of Carmel’s existing parks infrastructure is $407.4 million.
The premise of park impact fees is to ensure new residents—who might be moving to the city in part because of its parks—contribute fairly to the system. The fee does not have an impact on existing houses, nor would the fee be charged if someone tore down a house and built a new one at the same location. Carmel has charged a fee on new residential development since 2001.
Funds generated by park impact fees cannot be used to pay for park maintenance or operations. Instead, the funds are used to expand recreational opportunities.
Indiana communities are required to review park impact fees every five years and consider factors that include population growth, future park needs and assessed and projected land value.
Klitzing said park impact fees represent about 10% of the parks department’s capital funding sources. In a presentation, he said the parks department receives most of its funding from Clay Township through bonds and local income tax funds.
“This alone doesn’t give everything we need, but it is important in providing new amenities to serve new residents coming into the community,” Klitzing said.
The park impact fee increase comes as the parks department prepares for a more than $3 million annual loss beginning next year when Clay Township pays off its $55 million Central Park bond, which has funded projects throughout Carmel and Clay Township for the past 20 years. The bond pay-off will decrease the township’s share of local income tax distributions.
Also, while Carmel’s park impact fee is increasing, there could be fewer builders and developers paying the fee as the city nears its housing capacity.
“The amount of land that has traditionally sparked the growth within the community, the growth that we’re seeing in northeast Carmel and on the west side of Carmel, there’s just not a lot of land available,” Klitzing said. “So a lot of the new growth is going to be redevelopment opportunities, which I think also comes with … maybe a little bit more challenges and unpredictability.”
Last month, the Carmel City Council voted to give itself more oversight over park impact fees. Fees will be deposited into a fund designated by the city council, and park impact fee credits provided as a bargaining chip to developers will need to be approved by council members.
In December, the Carmel Clay Board of Parks & Recreation filed a lawsuit—that it called off earlier this year—against the city in a dispute over how Carmel should fund parks and other public greenspaces.
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Carmel’s willingness to invest is one of the major things that has set it apart from other cities.
So they are projecting to be underwater by ~$3m…thus the reason for the increase during a period of active residential home building. What is their plan after the city is landlocked and completely built out? How do they tax and who do they tax going forward to generate the necessary revenues to cover their ongoing operating expenses? They can no longer get it from residential developers, so hmmm, guess who they will get the tax dollars from next?!
This is basically the premise of the Strong Towns movement. Revenue dependent on perpetual growth isn’t sustainable, so land uses that are intense enough to provide enough revenue to fund the supporting infrastructure is important.
I know what’s we’ll do: instead of building parks, paths, roads while our community is growing, we’ll simply not invest anything. Congratulations! Welcome to Marion County.
Or the new tax income from the new residences collected. Carmel is pretty financially savvy, while others just spout false opinions. Envious? No worries, residence are happy to live there.