Carmel Clay Board of Parks & Recreation calls off lawsuit against city

The Carmel Clay Board of Parks & Recreation on Tuesday voted to call off a lawsuit it filed in December against the city in a dispute over how Carmel should fund parks and other public greenspaces.

A statement released Wednesday said the parks board decided to end the lawsuit because the Carmel City Council in January passed a resolution outlining proposed changes to the approval process for future park impact fee credits.

The Carmel Plan Commission will review an ordinance with the proposed changes before it returns to the city council for approval.

“Both the City of Carmel and Clay Township have been important partners contributing to the success of Carmel Clay Parks & Recreation and this is an issue we are happy to move beyond,” Carmel Clay Parks and Recreation Director Michael Klitzing said in written remarks. “Together we can now focus our attention on the future and how best to serve the park and recreation needs of Carmel residents.”

The parks board argued in the lawsuit filed Dec. 5 in Hamilton Superior Court that the city improperly diverted about $12.8 million to the Carmel Redevelopment Commission to be used in smaller park spaces in the city’s urban core to the detriment of larger, traditional parks throughout the city.

The funding source in question is called a park impact fee. In Carmel, such fees are charged to developers to support park construction and offset the impact of population increases that result from residential construction. Carmel charges developers $4,882 per dwelling unit in impact fees.

The complaint said the Carmel Board of Public Works has in some cases waived impact fees and instead directed developers to pay an equal amount into a Carmel Redevelopment Commission account, which is used to fund new downtown plazas and greenspaces.

Prior to 2010, the parks board was the only entity that could grant impact fee waivers. The Carmel City Council that year expanded the right to the Carmel Board of Public Works, which is made up of the city’s mayor and two mayoral appointees.

Former Carmel Mayor Jim Brainard told IBJ in December that the practice was not improper or illegal. He said the Carmel Redevelopment Commission has spent $50 million on downtown parks, and a fraction of that has come from impact fees.

He argued that money coming from downtown development and public-private partnerships should be spent where it is generated and not be taken away and spent in suburban areas of Carmel. He said it is important for residents of downtown Carmel to have greenspaces.

Under the proposed ordinance, the Carmel City Council would oversee all park impact fee spending, including the issuance of credits to developers.

If Carmel Clay Parks & Recreation or the Carmel Redevelopment Commission want to use park impact fees to fund a project, the directors would be required to discuss their needs with each other and then approach the city council for approval.