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City Council approves $208K parkland payment despite alleged appraisal flaws

Despite alleged flaws in a land appraisal, the City of Missoula will accept a cash payment in exchange for parkland for a Mullan-area subdivision, saying the issue should be resolved moving forward given new city regulations.

City planner Neil Miner said the initial appraisal for the McNett Flats subdivision was submitted on May 1 and valued the undeveloped property at $93,700 an acre. However, he said, that value was based on old county zoning and un-annexed land.

The property will be annexed into the city and, as a result, the subdivision was approved under city zoning, which allows for much denser development.

“The appraisal incorrectly based the value on the old un-annexed zoning,” Miner said. “We requested them to update it based on the new zoning it would be developed at. They submitted an update, but there were still errors throughout the document, specifically in adjustments to the comparable sales section regarding zoning.”

The amended appraisal was submitted on June 1 and had increased the land value to $95,000 an acre. The appraisal value of such properties is used to calculate the amount of cash a developer must pay in exchange for dedicating parkland as part of the project.

The city’s calculations for McNett Flats called for a parkland dedication of 3 acres. The developer is dedicating less than 1 acre for a trail, requiring them to pay cash for the remaining 2.1 acres required by city rules.

At $95,000 per acre, the undeveloped property carries a total appraisal value of $1.92 million, meaning the developer must provide $208,425 as a “cash-in-lieu” payment to the city for those 2.1 acres.

Last month on a 6-5 vote, the City Council amended the appraisal process for undeveloped land ahead of subdivision approval. Under the old regulations, the developer contracted the appraiser. With the changes in place, the city will now maintain a pool of appraisers and contract them itself.

“It will add a heightened level of transparency in the process, and it should result in the city’s ability to meet residents’ expectations regarding quality of life and access to parkland,” Miner said on Wednesday.

While the council accepted the $208,000 cash-in-lieu payment, members expressed frustration with the process, even though it played out before the new regulations were in place.

“It’s a little discouraging to have an appraiser come in and say there’s not enough data out there,” said council member Julie Merritt. “I don’t know how they can say that.”

Rising land values are making it hard for the city to secure parkland in certain areas experiencing growth, especially when using funds collected through the cash-in-lieu program. Over time, those cash-in-lieu funds are pooled together, allowing the city to purchase parkland, trails or open space.

Cash-in-lieu payments in the Mullan area can go to a variety of needs, from improving existing parkland to building trails or providing playground equipment.

“It sounds like a lot of money ($208,000), but it doesn’t translate into a huge amount of improvement or acquisition of land for a park, especially in this area, which will become more desirable and significantly more dense,” said council member Mirtha Becerra. “We need to do what we can to get the most out of the pressure of development in this area.”

Those who opposed placing the city in charge of the appraisal process suggested it was out to control the outcome of a property’s value, thus netting the city more money from the cash-in-lieu process.

Others, however, said it was a necessary step and they’re using McNett Flats as an example.

“This is the very issue we’re trying to address in the new amendment,” said city planner Grant Carlton. “Up front communication and collaboration between the city and the chosen appraiser will hopefully get to the crux of these issues and address them, and hopefully before the appraisal is started.”

Missoula council approves city control of land appraisals during subdivision review