HomeMy WebLinkAbout07-07-2025 - Study Session Agenda PacketSTUDY SESSION AGENDA
CITY COUNCIL MEETING
CITY OF WHEAT RIDGE, COLORADO
Monday, July 7, 2025
6:30 p.m.
This meeting will be conducted as a virtual meeting, and in person, at: 7500 West 29th
Avenue, Municipal Building, Council Chambers.
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Public Comment on Agenda Items
1. Inclusionary Housing Zoning (IHZ) Update
2. Parks and Recreation Pathway Draft
3. Staff Report(s)
4. Elected Officials’ Report(s)
ITEM NO. 1
Memorandum
TO: Mayor and City Council
THROUGH: Patrick Goff, City Manager
FROM: Shannon Terrell, Senior Housing Planner
Jana Easley, Planning Manager
Lauren Mikulak, Community Development Director
DATE: July 7, 2025
SUBJECT: Inclusionary Housing Zoning (IHZ) Update
ISSUE:
Council is being asked to consider the structure of a potential Inclusionary Housing
Zoning (IHZ) program or an alternative program to support the implementation of the city’s Affordable Housing Strategy and Action Plan.
PRIOR ACTION:
At a study session on June 3, 2024, council supported staff’s recommendation of an IHZ program structure and authorized a feasibility analysis. In August 2024, council
approved a supplemental budget appropriation to hire a consultant to conduct the study.
BACKGROUND:
The Affordable Housing Strategy (AHS) and Action Plan recommends that the city explore an Inclusionary Housing Zoning (IHZ) program as a potential funding source for
the city’s Housing Fund. Last summer, staff presented to council programmatic
components of an IHZ program and made the following recommendations:
- Make the program mandatory as opposed to voluntary
- Establish a fee-in-lieu per unit option that is below the cost of constructing a unit
- Require a set-aside of 10% of all new residential units to be affordable to
households at 80% to 120% Area Median Income (AMI)
- Apply affordability requirements to all new residential developments of 10 or
more units city-wide
- Design the program to minimize the long-term administrative burden on the city
Council provided consensus on the program structure, and staff retained a consultant in
the fall of 2024 to determine the feasibility of the following components on an IHZ
program: 1) affordability range, 2) applicability requirements, and 3) fee-in-leu amount.
Study Session Memo – IHZ Update
July 7, 2025 Page 2
Details from the study are available in Attachment 1: Summary of Consultant Feasibility
Analysis.
The feasibility analysis reviewed staff’s recommendations for program structure and
included three main takeaways:
1. Rental developments limited to charter cap (less than 21 du/acre) may not be
able to absorb the costs of an IHZ ordinance. Projects with higher density allowances can balance the cost to build per unit.
2. Incentives are needed to fill in gaps, but the city’s existing charter limits what tools can be used.
3. Based on potential future development, an IHZ program could produce an
estimated 177 affordable rental units and 20 for-sale rental units or generate an estimated $12 million in fees that can be used toward the Housing Fund over the
next ten 10-15 years.
The success of an IHZ program relies on a strong real estate market. Staff have
concerns about the current state of the market and have reservations about whether an IHZ program is the most effective or appropriate approach for Wheat Ridge at this time.
As part of this process, staff interviewed eight residential developers to gather feedback on the potential impacts of an IHZ program. Most developers cautioned staff that an
IHZ program would have some unintended consequences on the development market in
Wheat Ridge and concluded with four main takeaways:
1. The added cost of an IHZ program could increase the cost of market-rate
housing, putting that burden on renters and buyers. 2. Smaller developments (fewer than 20 units) would not be able to absorb the cost
of an IHZ program. The IHZ feasibility analysis also confirmed this finding.
3. Market volatility is making construction costs uncertain due to several factors, including tariffs, inflation, worker shortages, and materials costs. These factors
continue to shrink the margins for developers, making projects risky to invest in. 4. Developers are choosing not to build in cities with existing IHZ requirements,
citing Denver, Boulder, and Broomfield as examples of IHZ programs with too
high of an affordability requirement.
POLICY OPTIONS:
Based on these considerations, staff are proposing four policy options for council’s
consideration:
Option 1: Adopt a traditional IHZ program based on recommendations from the consultant’s feasibility study.
Option 2: Scale back the IHZ program requirements for smaller developments.
Study Session Memo – IHZ Update
July 7, 2025 Page 3
Option 3: Explore a linkage fee on all new development.
Option 4: Take no action at this time.
These four options are described in more detail below:
Option 1 – Adopt a traditional IHZ program
Following council’s discussion last summer, staff hired a consultant to evaluate the
financial feasibility of a proposed inclusionary housing program, including income
targets, applicability thresholds, and fee-in-lieu options. Key findings are summarized in Attachment 1: Summary of Consultant Feasibility Analysis.
Based on a review of similar programs, policy trends, and local market conditions, the
consultant recommended the following program structure:
Figure 1: Recommended IHZ Program Structure
Program Structure
Applicability Mandatory for all new development projects with 10 or more
units
Set-Aside Rental: 10% of units affordable at 80% AMI
For-Sale: 10% of units affordable at 100% AMI
Duration 30 years (deed-restricted)
Alternatives Fee-in-lieu:
Rental: $58,811 per unit
For-Sale: $97,827 per unit
Incentives • Expedited Review
• URA TIF Financing, where applicable
Exemptions • Developments with 100% affordable, deed-restricted
units funded by federal, state, or local government funding
sources
• Developments with 50% affordable units, owned by a
charitable trust, housing authority, or eligible tax exemption.
This program as proposed could directly support the creation of affordable housing
units and establish a secondary funding source for the housing fund. Implementing an
inclusionary housing policy would also align with state housing goals and support the
implementation of recent state legislation, improving eligibility for future state and federal funding.
However, there are tradeoffs that council should consider. While the consultant’s
analysis provides valuable data, staff have reservations about several key assumptions,
especially regarding project feasibility. Based on conversations with local developers and a review of Wheat Ridge’s development patterns, staff are concerned that
Study Session Memo – IHZ Update
July 7, 2025 Page 4
implementing the program as proposed could make many residential developments
financially infeasible due to current market volatility. This may inadvertently slow housing production and undermine the broader goal of housing diversity and growing
the Housing Fund.
If council’s primary goal is to require the direct production of affordable units through
new development, this program structure aligns with that approach. However, if the City’s goal is to establish a sustainable, long-term funding source for affordable
housing, this approach may not be the most effective or appropriate tool.
Option 2 – Scale back IHZ program requirements for smaller developments
Based on an analysis of development capacity, most future residential projects in Wheat Ridge over the next 10-15 years will likely occur on small infill lots less than 2
acres in size and with less than 20 units total due to available land, zoning, height limits, and infrastructure constraints (Figure 2). Conversations with developers confirm that
these smaller projects face unique challenges that cannot be offset by increased
density.
Figure 2: Development Capacity Analysis (10-15 years)
Potential Future
Development Projects
Projects Units Average
Parcel Size (Acres)
Less than 10 units 20 125 0.56
10-19 units 18 242 1.23
20-29 units 7 170 1.97
30-39 units 5 172 2.58
40-49 units 3 134 2.05
50-59 units 2 105 0.73
60 units or more 12 2,015 4
To reflect market realities and to reduce development barriers, Option 2 introduces a
graduated fee-in-lieu structure based on project size, as shown below. Projects with
fewer than 20 units would see a reduced fee-in-lieu from 50% to 95% based on unit
count, as shown in Figure 3. This could still generate enough to support the Housing Fund, around $1.2 million over 10-15 years or $100,000 annually, based on speculative
development proposals.
Study Session Memo – IHZ Update
July 7, 2025 Page 5
Figure 3: Potential fee reduction for projects with 10-19 units
Number
of Units
Reduction IHZ
Rental Fee
Reduced
Fee
IHZ
For-Sale Fee
Reduced
Fee
10 50% $58,811 $29,406 $97,827 $48,914
11 55% $58,811 $32,346 $97,827 $53,805
12 60% $58,811 $35,287 $97,827 $58,696
13 65% $58,811 $38,227 $97,827 $63,588
14 70% $58,811 $41,168 $97,827 $68,479
15 75% $58,811 $44,108 $97,827 $73,370
16 80% $58,811 $47,049 $97,827 $78,262
17 85% $58,811 $49,989 $97,827 $83,153
18 90% $58,811 $52,930 $97,827 $88,044
19 95% $58,811 $55,870 $97,827 $92,936
The feasibility analysis also confirmed that projects with less than 60 units would not be able to absorb a fee-in-lieu in the current market (See Attachment 1). In addition to a
reduction for projects with fewer than 20 units, projects with 60 units or fewer could see
a reduced fee-in-lieu from 75% to 95% based on project size. This could generate approximately $9.5 million over 10-15 years, or $800,000 annually, based on current or
speculative development proposals.
Figure 4: Fee-in-lieu for projects with 20+ units
Number of
Units
Percent
Required
IHZ
Rental Fee
($58,811 /du)
Reduced
Fee
IHZ
For-Sale Fee
($97,827 /du)
Reduced Fee
20 75% $117,622 $88,217 $195,654 $146,741
30 80% $176,433 $141,146 $293,481 $234,785
40 85% $235,244 $199,957 $391,308 $332,612
50 90% $294,055 $264,650 $489,135 $440,222
60 95% $352,866 $335,223 $586,962 $557,614
70 100% $411,677 $684,789
80
$470,488 $782,616
90 $529,299 $880,443
100 $588,110 $978,270
200
$1,176,220 $1,956,540
300
$1,764,330 $2,934,810
This graduated fee approach maintains the traditional inclusionary zoning framework but lowers the financial burden on smaller and mid-sized infill projects, which comprise
most of the anticipated development in Wheat Ridge. The program structure is still
expected to generate a combined amount of $10.7 million for the Housing Fund over
Study Session Memo – IHZ Update
July 7, 2025 Page 6
10–15 years and aligns with practices in other Colorado cities like Littleton, offering
flexibility to adapt to market conditions.
The tradeoffs include potentially fewer on-site affordable units or fees generated as
compared to Option 1 but has less of an overall impact on development in Wheat Ridge.
Staff recommends this option over Option 1 if council still prefers a traditional
inclusionary framework with a phased, market-sensitive approach.
Option 3 – Explore a linkage fee Linkage fees, also known as impact fees, are charges local governments assess on all
new development (residential and commercial). Unlike inclusionary housing programs,
which typically focus only on residential projects, linkage fees tie the need for affordable housing to all growth, including new jobs that increase demand for workforce housing.
This approach is more equitable and fosters a shared responsibility, ensuring every new project contributes to the city’s housing affordability solutions.
Wheat Ridge currently has impact fees for parkland which are applied only to residential development. The city has also completed an impact fee study to collect fees-in-lieu for
streetscape improvements but in most cases, these are built instead of paid. An impact fee to further housing goals is a viable option, and among peer cities, linkage fees are
becoming an increasingly common tool. For example, Denver imposes a linkage fee
alongside its inclusionary zoning ordinance, applying the charge to all new development,
including major renovations. Arvada and Englewood are actively exploring similar
strategies, either in tandem with inclusionary zoning or as an alternative.
While similar in purpose to inclusionary zoning programs, linkage fees have some
distinct characteristics:
• Broader Applicability: Linkage fees can apply to both residential and commercial
development, including office, retail, and industrial projects, acknowledging that job growth increases the need for workforce housing.
• Monetary contribution: Developers pay a set fee per square foot. The specific
rate must be established through a Nexus Study, which quantifies the relationship between new development and affordable housing demand.
• Legally Defensible: A Nexus Study is required to demonstrate the connection
between new development and the need for affordable housing, establishing a
reasonable fee amount to mitigate that impact. A Nexus Study is legally defensible, whereas some inclusionary zoning programs are not.
• Policy Options: Council can tailor a linkage fee program to meet local needs,
such as applying a lower fee to smaller projects, exempting certain uses, or establishing thresholds by unit count or square footage—similar to strategies
proposed in Option 2.
Study Session Memo – IHZ Update
July 7, 2025 Page 7
Linkage fees are also more resilient during market fluctuations. Because they apply to
all development types and are charged per square foot, they can provide a more stable revenue stream than inclusionary housing requirements, which only apply when
residential units are built.
For comparison, the table below illustrates the difference in potential costs between a
per-unit IHZ fee-in-lieu and a $4 per square foot linkage fee:
Figure 5: IHZ fee-in-lieu compared to a linkage fee
Development Type IHZ Fee-In-Lieu
(Option 1)
Gross Square
Feet
Linkage Fee
Rental $58,811 per unit $4 per sq. ft
Apartments at city charter cap $247,006 37,100 $148,400
3-story apartments $352,866 53,000 $212,000
5-story apartments $588,110 106,000 $424,000
For-Sale $97,979 per unit $4 per sq. ft
Townhomes at city charter cap $410,873 56,400 $225,600
Medium Density Townhomes $293,481 44,800 $179,200
Condos $586,962 54,500 $218,000
Non-Residential $4 per sq. ft
Quick serve restaurant Not applicable 2,500 $10,000
General retail/service Not applicable 30,000 $120,000
Employment Not applicable 50,000 $200,000
These estimates demonstrate that linkage fees typically impose a lower financial
burden on residential projects compared to per-unit IHZ fees. This could be especially important in Wheat Ridge, where housing diversity is desired, development margins are
tight, and the pipeline of residential projects is diminishing.
If the City’s goal is to establish a sustainable and long-term secondary revenue source
for the Housing Fund, staff finds that a linkage fee is a more appropriate and equitable fit. Unlike inclusionary housing, which can unintentionally place the financial burden on
residential developers, a linkage fee distributes that responsibility across all
development types. This also better reflects the city’s commitment to treating
affordable housing as a community-wide need, not just a housing-sector obligation.
Study Session Memo – IHZ Update
July 7, 2025 Page 8
To pursue this option, the City would need to commission a Nexus Study, which is a
legally required analysis to determine the relationship between new development and housing needs. Staff estimate the cost of a Nexus Study to be around $55,000.
Option 4 – Take no action
Taking action on an inclusionary housing program requires careful consideration of the
economy and real estate market. Conversations with developers tell us that now may not be the right time to impose an additional fee on residential developments, and the
city may need to decide to impose one with a reduction, take a different approach, or choose to revisit this policy decision when the market changes.
If council decides to take no action, the Housing Fund would still receive an annual contribution of approximately $400,000 from the city’s short-term rental program. This
would generate $4 million over the next 10 years and would still be enough to contribute to affordable housing projects or programs in Wheat Ridge.
RECOMMENDATIONS:
After evaluating the feasibility analysis, development trends in Wheat Ridge, and peer city programs, staff does not recommend moving forward with Option 1, a traditional
IHZ program. This approach risks making future development financially infeasible,
particularly given Wheat Ridge’s limited land availability and smaller-scale infill projects.
Staff also have hesitations with Option 2, which proposes a scaled-back IHZ program that reduces fee-in-lieu requirements on smaller projects. While this structure is more
sensitive to the market, we are concerned it could still constrain residential developers.
With the city’s modest growth outlook, even a reduced IHZ requirement may
inadvertently limit housing production in Wheat Ridge.
Given these concerns and assuming council is still seeking a secondary revenue source
for the Housing Fund, staff recommend Option 3, pursuing a linkage fee. This approach
could apply to both residential and commercial development, spreading the cost of
affordable housing more equitably across all new growth. A linkage fee better reflects
housing as a universal community need and is more resilient to market cycles. While estimated revenue ($6 million over 10 years) is lower than the other IHZ options (Figure
5), this option is less likely to restrict housing development and still creates a secondary
revenue source for the Housing Fund.
Based on these considerations, staff have the following questions for council: 1. Does council still want to explore a secondary funding source for the housing
fund beyond short-term rental (STR) revenue?
2. If so, would council like to pause further work on IHZ and explore a linkage fee in
more detail?
Study Session Memo – IHZ Update
July 7, 2025 Page 9
Figure 5: Potential Sources and Uses for Housing Fund Option 1: IHZ
Program
Option 2: IHZ
Program (reduction)
Option 3:
Linkage Fee
Option 4:
STR Fees
Applies to Residential Residential Residential +
Commercial
Short Term
Rentals
Residential Dev with
10+ units
Residential Dev with
10+ units
Fee Structure 10% at 80% AMI
(Rental)
10% at 100% AMI
(For-Sale)
Rental: 10% at 80%
AMI
For-Sale 10% at 100%
AMI
$4 per square
foot
Projects with fewer
than 50 units receive
a fee reduction of 5-95%
Assumptions Assumes full build-out of projects currently in the
development pipeline
that are not
affordable
Assumes full build-out of projects currently in the
development pipeline
that are not
affordable
Assumes 150,000 square feet of
commercial
and residential
development is built
$400,000 annually from STR
revenue
Annual Fee Generation* $1,236,609 $893,000 $600,000 $400,000
Fee Generation 10 years $12.3 million $10.7 million $6 million $4 million
* these numbers are based on project assumptions including a development capacity analysis and estimated square footage.
ATTACHMENTS:
1. Summary of Consultant Feasibility Analysis
1
Summary of Consultant Feasibility Analysis
Following council’s discussion last summer, staff hired Ricker Cunningham to evaluate
the financial feasibility of a proposed inclusionary housing program, including income
targets, applicability thresholds, and fee-in-lieu options. The results from the feasibility
analysis informed the recommended program framework, including the income targets,
applicability thresholds, and project feasibility.
RECOMMENDED PROGRAM FRAMEWORK
Data on the current real estate market in Wheat Ridge highlights where an inclusionary
housing ordinance can be most effective. Market-rate apartments in Wheat Ridge are
currently serving renters earning 80-100% of the Area Median Income (AMI) for studio
and one-bedroom units (Figure 1). However, two- and three-bedroom rental units remain
unaffordable for these income brackets, serving renters close to 100-120% AMI.
Figure 1: Median Price of Market Rent Compared to Affordable Rents by Unit Type
Source: Ricker Cunningham
For buyers, the situation is even more challenging for moderate-income households.
Homes in Wheat Ridge are priced higher than rental units and are predominantly being
sold to households earning more than 120% AMI (as shown in Figure 2). This leaves a
notable gap in homeownership options for those earning 80-100% AMI.
ATTACHMENT 1
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$3,500
Studio 1-Bedroom 2-Bedroom 3-Bedroom
Market Rent 60% AMI 70% AMI 80% AMI
2
Figure 2: Median Sales Price of For-Sale Homes Compared to Affordable Sales Price by Unit
Type
Source: Ricker Cunningham
The needs assessment conducted as part of the Affordable Housing Strategy and
Action Plan (AHS) recommends that an inclusionary zoning program in Wheat Ridge
should target renter households earning $50,000 to $100,000 and buyer households
earning $100,000 to $150,000. These incomes correlate to 60-80% AMI for renters and
100-120% AMI for buyers. Based on the local housing needs, the consultants confirmed
that the IHZ program should target renters at 80% AMI and buyers at 100% AMI.
Another component of an inclusionary program is the set-aside requirement. Set-aside
requirements are typically based on the number of affordable units a city needs
compared to how many units developers can build for a project to be financially
feasible. The consultants tested a wide range of affordability set-aside requirements at
5%, 8%, and 10% based on AMI ranges from 60-120% AMI. Based on the considerations
outlined above, the consultants confirmed a set-aside requirement of 10% for rental
units at 80% AMI and 10% for for-sale units at 100% AMI.
FEE-IN-LIEU
The State of Colorado requires that mandatory inclusionary housing programs shall
provide a compliance alternative to constructing affordable units per House Bill 21-
1117. The most common alternative is a fee-in-lieu. The fee in lieu is typically calibrated
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$100,000
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1-Bedroom 2-Bedroom 3-Bedroom
Market Sales Price 80% AMI 100% AMI 120% AMI
3
based on either the cost to construct an affordable unit (known as the development
cost method) or the difference in price between a market rate and affordable unit
(known as affordability gap method).
Ricker Cunningham calculated the fee-in-lieu using the affordability gap method for
rental units ranging from 60-80% AMI and for-sale units ranging from 80-120% AMI
based on unit type (number of bedrooms). Figure 3 shows the potential fee-in-lieu based
on AMI level for rental from 60-80% AMI and for-sale from 80-120% AMI.
Figure 3: Estimated Fee-in-lieu Payment (Per Unit) based on AMI level
Fee based on AMI Rental For-Sale
60% AMI $179,377
70% AMI $116,830
80% AMI $58,881 $194,366
100% AMI $97,827
120% AMI $10,969
The feasibility analysis recommends a fee-in-lieu at 80% AMI for rental and 100% AMI
for for-sale based on a desire to keep the fee-in-lieu low enough to encourage
developers to pay the fee and limit the administrative burden on the city. The
recommended fee-in-lieu amounts would be significantly lower than those of the
inclusionary program for other peer cities, such as Broomfield and Littleton, whose
policy goals differ, but slightly higher than Longmont’s inclusionary program (Figure 4).
Figure 4: Inclusionary Fee-In-Lieu Compared to Peer Cities
IHZ Program IHZ Program Detail Fee in Lieu per
Affordable Unit
Sample Scenario:
Total Fee for a 100
unit project (Rental) And 30 unit townhome (For-Sale)
Rental
Wheat Ridge 10% at 80% AMI $58,811 $588,110
Broomfield 20% at 60% AMI $106,635 $2,132,700
Littleton 5% at 60% AMI $269,708 $1,348,540
Longmont 12% at 50% AMI $5.93/sq. ft $251,432
For-Sale
Wheat Ridge 10% at 100% AMI $97,827 $293,481
Broomfield 10% at 80% AMI $165,669 $497,007
Littleton 5% at 80% AMI $269,708 $809,124
Longmont 12% at 80% AMI $13.50/sq. ft. $604,800
4
DEVELOPMENT FEASIBILITY
Feasibility analyses are designed to test the market viability of inclusionary
requirements based on development proformas typically used in the real estate industry
to help determine whether a project is financially feasible. Developers, investors, and
lenders rely on several financial metrics to assess a project’s viability, including return
on cost (ROC), internal rate of return (IRR), among others. A proforma is typically
comprised of:
1. Development budget (cost of construction and other costs),
2. Estimate of income as units are sold or rented; and
3. Estimate of project value based on project income at stabilization and the
estimated value of the entire development at sale.
Ricker Cunningham tested the feasibility of several prototypical development models
based on the requirement of 10% set-aside at 80% AMI for rental and 10% set-aside at
100% AMI for for-sale.
Rental Feasibility
Figure 5 below shows the proforma development costs of three prototypical rental
developments:
1. Apartments subject to the city charter cap, restricted to 21 dwelling units per
acre. This model is based on a 2-acre site with 42 dwelling units.
2. Mid-rise apartments in city-charter exempt areas. This model is based on a 2-
acre site with 60 units.
3. Five-story apartments, in city-charter exempt areas. This model is based on a 2-
acre site with 100 units.
The feasibility analysis confirmed that developments at a higher density can absorb the
cost of an IHZ program, however, lower-density developments cannot. The only
development proposal that could absorb an IHZ program fee-in-lieu set at 10% at 80%
AMI is the 5-story 100-unit project in a city-charter-exempted area, yielding a positive
profit margin with a fee-in-lieu. The other rental development prototypes would not be
able absorb an IHZ program, suggesting the need to reduce the IHZ fee-in-lieu based on
size of the development or exempt development in city-charter cap areas.
5
Figure 5: Proforma Models for Rental apartments tested for an IHZ program
Rental Apartments at City
Charter Cap
3-story apartments
(exempt)
5-story apartments
(exempt)
Site Size 2 2 2
Number of Units 42 60 100
Total Development
Costs*
$17,391,582 $23,381,748 $47,188,818
Total Development
Cost per Unit
$414,085 $389,696 $471,888
Estimated Project
Value**
$16,447,358 $23,496,226 $49,520,755
Baseline Margins (no
IHZ)
($944,224) $114,478 $2,331,937
IHZ Fee-in-lieu (10%
at 80% AMI)
$235,244 $352,866 $588,110
Project Margins/(Gap) ($1,191,230) ($238,388) $1,743,827
* Total development cost includes property acquisition, site improvements, building construction,
construction contingency (5%), soft costs (20% of hard costs), and a return on cost of 5.3%.
** Estimated Project Value includes gross rental income, other income, 5% vacancy, and operating
costs.
For-Sale Feasibility
Figure 6 below shows the proforma models of three prototypical for-sale
developments:
1. Medium-density townhomes at 15 dwelling units per acre. This model is based
on a 2-acre site with 30 units and is the most typical townhome development
type.
2. Townhomes subject to the city charter cap, restricted to 21 dwelling units per
acre. This model is based on a 2-acre site with 42 units.
3. Condominiums at 30 dwelling units per acre in city exempted areas. This model
is based on a 2-acre site with 60 units.
The results of the analysis show that a townhome development with at least 30 units
could likely absorb the cost of the fee-on-lieu; however, a condominium building could
not.
6
Figure 6: Proforma Models for For-Sale Townhomes and Condos
For-Sale Medium Density
townhomes
Townhomes at
City Charter
Cap
For-Sale Condos
Site Size 2 2 2
Number of Units 30 42 60
Total Development
Costs*
$13,751,976 $16,903,551 $21,651,624
Total Development Cost per Unit $458,399 $402,466 $360,860
Net Sales Proceeds** $14,263,000 $19,210,000 $21,200,000
Baseline Margins (no
IHZ)
$511,024 $2,306,449 ($451,624)
IHZ Fee-in-lieu (10% at 100% AMI) $293,481 $410,873 $586,962
Project Margins/(Gap) $217,543 $1,895,576 ($1,038,586)
* Total development cost includes property acquisition, site improvements, building construction,
construction contingency (5%), soft costs (15% of hard costs).
** Net Sales Proceeds includes gross sales less the cost of sales (7%) and estimated return
(10%).
INCENTIVES, EXEMPTIONS, AND ALTERNATIVES
It is common practice for inclusionary zoning programs to include development
incentives, exemptions, and alternatives that help offset the costs of the affordability
requirements:
• Incentives are tools that help offset the additional cost of inclusionary programs;
• Exemptions help charitable entities or housing authorities provide the affordable
units needed for the community; and
• Alternatives provide other ways for developers to meet the affordable housing
goals of the community.
The following options were recommended by Ricker Cunningham and further refined by
staff based on the applicability.
Incentives
A successful IHZ program would offer incentives to developers to help offset the cost of
additional affordability requirements. Based on the feasibility analysis, Ricker
Cunningham recommends leveraging the following incentives:
7
• Building permit fee or use tax reductions or rebates – these typically range from
$5,000 to $15,000 per affordable unit and are often capped at a certain threshold.
These fees are often extended only to the affordable units within a development.
A $5,000 per affordable unit fee reduction in association with a 10% affordability
set-aside would effectively lower the per-unit cost of the entire development by
about $500 (per total unit). However, our building permit fees cover our CAA
costs and cannot be reduced. Therefore, a building permit fee reduction would
not be applicable for Wheat Ridge.
• Density bonus or charter cap exemptions – A common incentive offered in IHZ
programs is a density bonus, which allows developers to build more units than
typically permitted. This helps offset the reduced revenue from including
affordable units. However, this incentive isn't applicable in much of Wheat Ridge
due to the citywide charter cap on height and density. While some of the city's
mixed-use districts are exempt from this cap, most of the residential projects
that would be subject to this ordinance are not. This means that developers in
Wheat Ridge wouldn't be able to utilize a density bonus to mitigate the costs of
providing affordable housing.
• Expedited Review – Expediting the development review process helps to speed
up the entitlement process. This incentive cannot be quantified in the same way
as other incentives but is still favorable among developers. By 2026, the city will
need to adopt an expedited review process before being eligible to commit to the
next round for Proposition 123. This incentive would only apply to projects with
at least 50% affordable housing units rented at 60% AMI or less and for-sale units
at 100% AMI or less.
• Urban Renewal TIF financing – The city currently offers Tax Increment Financing
(TIF) to developers in Urban Renewal areas in exchange for public benefit. The
city will typically ask for affordable units or a percentage of the TIF to be returned
to the city in the Housing Fund. However, there are only a certain number of URA
areas that exist within the city so the number of projects that would receive this
incentive is limited.
Exemptions
Most inclusionary programs allow exemptions or alternatives to adjust the program
requirements on a case-by-case basis. Exemptions help provide flexibility and ensure
the policy is applied fairly and effectively without burdening certain types of
development.
Ricker Cunningham recommends the following exemptions to the IHZ program:
8
• Developments with 100% affordable, deed-restricted units funded by federal,
state, or local government funding sources
• Developments of a charitable entity, trust, housing authority or eligible tax
exemption providing at least 50% affordable housing
PROGRAMMATIC RECOMMENDATIONS
The consultants recommend the following program structure:
Figure 7: IHZ Program Structure
IHZ Program Structure
Applicability Mandatory for all new development projects with 10 or more
units
Set-Aside Rental: 10% of units affordable at 80% AMI
For-Sale: 10% of units affordable at 100% AMI
Duration 30 years (deed-restricted)
Alternatives Fee-in-lieu:
Rental: $58,811 per unit
For-Sale: $97,827 per unit
Incentives • Expedited Review
• URA TIF Financing
Exemptions • Developments with 100% affordable units, deed-restrictive
units
• Development with 50% affordable units, owned by a
charitable trust, housing authority, or eligible tax exemption.
IHZ Fee generation
Ricker Cunningham conducted a Development Capacity Analysis based on staff input of
projects currently in the development process, proposed, or anticipated. Based on a
mandatory IHZ program with a set-aside of 10% at 80% AMI for rental and 10% at 100%
AMI for-sale, the ordinance could generate 177 affordable rental units and 20 for-sale
rental units or generate an estimated $12 million in funds through fees that can be used
towards the Housing Fund over the next ten years.
ITEM NO. 2
Memorandum
TO: Wheat Ridge City Council
THROUGH: Patrick Goff, City Manager
FROM: Karen A. O’Donnell, Parks & Recreation Director
DATE: July 7, 2025
SUBJECT: Parks and Recreation Pathway Draft
ISSUE:
The Parks and Recreation Department is in the final stages of completing a 10-year master plan update, The Parks and Recreation Pathway. The document is currently in
draft form, and the project team is seeking feedback from City Council and staff before
compiling the final document.
PRIOR ACTION:
City Council awarded a contract in an amount not to exceed $249,999 to Berry Dunn, McNeil & Parker, LLC on March 25, 2024, for professional services related to the Parks
and Recreation Master Plan update. Additionally, Council members were contacted
directly with an opportunity to participate in a one-on-one meeting with the project
manager, JR Clanton, during the community engagement stage.
FINANCIAL IMPACT:
There are no immediate financial impacts associated with this topic. All financial
impacts will be related to implementation of recommendations upon adoption of the
document.
BACKGROUND:
The Parks and Recreation Department is accredited through the Commission for Accreditation of Park and Recreation Agencies (CAPRA). CAPRA recommends that
communities update their Parks and Recreation Master Plans every ten (10) years. The
existing Wheat Ridge Parks & Recreation Master Plan was adopted in 2015. A contract
was awarded to Berry Dunn on March 24, 2024, to lead the Department’s efforts to
update the master plan for the next ten (10) years.
Study Session Memo – Parks and Recreation Pathway Update
July 7, 2025 Page 2
The project team selected the title, “The Wheat Ridge Parks and Recreation Pathway.”
The schedule included six phases: (1) project management and coordination, (2) establish vision, goals, and objectives, (3) evaluation of current levels of service, (4)
community and internal engagement, (5) implementation and action planning, and (6)
final parks and recreation plan. The project is currently in the 6th phase, reviewing the
draft document, and compiling capital costing. Utilizing feedback from City Council and
staff, a final plan will be designed and presented to City Council for formal adoption.
RECOMMENDATIONS:
City staff recommend that City Council members review the draft material and provide feedback to either support the draft findings or suggest changes.
ATTACHMENTS:
1. Parks and Recreation Pathway Update Presentation
City Council Presentation –July 7, 2025
Wheat Ridge Parks and Recreation Pathway
ATTACHMENT 1
2
Introductions
Project Overview
Pathway Content
Community Engagement
Operations Assessment
Service Levels
Strategic Priorities
Capital Recommendations
Next Steps
Agenda
3
Project Purpose and Goals
Update Wheat Ridge’s Parks and Recreation Master Plan and transition from the term
"Master Plan.”
Ensure thorough public engagement to gather input and translate community vision.
Conduct in-depth analysis to inform recommendations for future facilities and services.
Integrate surveys, visioning, and financial planning into the planning process, and
summarize comprehensive recommendations for City review in the document.
4
Preliminary Schedule
Initial project planning
Workplan development
Data requests
Kickoff Meeting
Ongoing project management
Project Management and Coordination
Vision and Mission Alignment Workshop
Establish Vision, Goals, and Objectives
Environmental Scan
Operations Assessment
Recreation Programs Assessment
Levels of Service Analysis
Parks & Facilities Assessment
Benchmarking Analysis
Evaluation of Current Levels of Service
Engagement Plan
Project Brand and Collateral
Internal Engagement
Public Outreach
Statistically Valid Survey
Engagement Feedback Report
Community & Internal Engagement
Midpoint Findings Presentation
Staff, Public, Council Input
Visioning Workshops
CIP Development
Implementation Plan
Implementation & Action Planning
Draft Document
Final Document
Executive Summary
Final Parks & Recreation Plan
1 3 5
2 4 6
5Community Engagement
6
Community Engagement Strategy
7
Community Engagement
8
Community Engagement
9
Randomly sampled Wheat Ridge
Households
The goal was to receive surveys
from at least 300 households.
A total of 414 completed surveys
were received.
Margin of error of at least +/-
4.79% at the 95% level of
confidence.
Statistically Valid Survey
10
•High Value on Trails and Open Spaces: Residents requested improved trail connectivity, safer pedestrian
routes, and preservation of natural green spaces.
•Facility Investments and Expansions: Priorities included expansion of the Wheat Ridge Recreation Center,
upgrades to the Anderson Pool, and additional amenities such as shaded areas and off-leash dog parks.
•Program Expansion: The community voiced support for more fitness, outdoor, nature, and cultural arts
programs, especially evening and weekend offerings.
•Event Popularity: Community events, including live concerts, movies, and cultural festivals, were highly
valued and seen as opportunities to foster civic pride.
Community Engagement - Findings
11
•Safety and Accessibility Improvements: Residents emphasized better lighting, ADA-accessible facilities,
safer crossings, and enhanced trail maintenance.
•Aquatics Enhancements: Strong interest was expressed in expanded indoor and outdoor aquatic facilities
and programming.
•Youth-Oriented Amenities: Youth feedback emphasized the importance of creative and adventurous park
features, including ziplines, climbing structures, and imaginative play spaces.
•Improved Communication Channels: Residents emphasized that while digital tools are growing, trusted
sources like activity guides, local newspapers, and community newsletters remain vital to spreading the
word.
Community Engagement – Findings (cont.)
12Operations Assessment
13
Organizational Assessment
•Reviews staffing, structure, and financial resources to understand how services are supported and sustained.
Recreational Assessment
•Evaluates programs, participation, and alignment with resident needs to identify gaps and opportunities for growth.
Demographics
•Offer a detailed view of who lives in Wheat Ridge and how those trends may shift, ensuring services remain relevant and equitable.
Benchmarking
•Compares Wheat Ridge to similar agencies across the country, helping highlight where the City leads and where it can improve.
Operations Assessment
14
Organizational Assessment
Reviewed department structure and staffing across department.
Analyzed historical operating budgets to understand trends in funding and resource allocation.
Assessed staffing levels (FTEs) and functional distribution using national NRPA benchmarks.
Evaluated per capita spending to compare local investment to similar-sized communities.
Calculated operating costs per acre to assess efficiency in parkland maintenance.
15
Above -Average Staffing Levels Support Broad Service Delivery
High Proportion of Staff Dedicated to Recreation Services
Underinvestment in Administrative Capacity
Efficient Parkland Operations Despite Below -Median Spending Per Acre
Strong Per Capita Investment in Parks and Recreation
Sustained Growth in Operating Budget
Organizational Structure Supports Clear Division of Responsibilities
Alignment with NRPA Benchmarks with Local Priorities Reflected
Organizational Assessment - Findings
16
Evaluated program metrics
Reviewed participation data, cancellation
rates, and program life cycle stages
Analyzed program mix, demographics
served, and revenue trends
Assessed alignment with community
Recreation Assessment
Recreation Assessment
Focus Groups
Community Engagement
Program Participation Data
Program Guides
17
Diverse Recreation Facilities Serve Broad Demographics
Program Coverage Exceeds National Averages
Strong Participation in Fitness, Active Adult, and Enrichment Programs
Limited Space is a Significant Barrier to Growth
Healthy Program Life Cycle Distribution
Youth and Adult Programs Generate the Most Revenue
Financial Assistance Programs Improve Equity
Community Feedback Supports Focus on Fitness, Nature, and Cultural Programs
Recreation Assessment – Findings
18
•Analyzed population, age, income,
race/ethnicity, and household trends
using 2024 Census estimates
•Focused on Wheat Ridge city
boundaries; compared with state and
national data for context
•Informs long-range planning for
parks, programs, and facility access
Demographics
19
Stable Population with Minimal Projected Growth
Older Median Age Compared to State and National Levels
Youth Population Expected to Grow
Median Household Income Below State Average
Increasing Racial and Ethnic Diversity
Demographics - Findings
20
Frame performance within a broader
context and identify areas where
WRPR is excelling or could adapt
practices from high-performing peers
Identified Peer Agencies
Data gathered from public sources
Analyzed Key Metrics
Contextualized Findings
Benchmarking
20,000
34,452 36,000 36,835
42,840 44,420
46,422
Golden, CO Wheat Ridge Englewood, CO Erie, CO Windsor, CO Sierra Vista, AZ Farmington, NM
21
Wheat Ridge Serves a Mid-Sized Community with a Compact Footprint
Lowest Staffing Ratio Among Peer Agencies
Smaller Operating Budget, But Substantial Capital Investment in Some Years
Mid-Range Revenue Generation with Stronger Cost Recovery Potential
Per Capita Expenditures Below Benchmark Average
Comprehensive Program Menu Matches or Exceeds Peer Offerings
Benchmarking - Findings
22Service Levels
23
Evaluates how well current parks and amenities serve community needs
It looks at:
Access + Quantity + Quality
Parks Level of Service
24
LOS Scores – What we look at
Recreation features (number and condition of components)
Comfort and support amenities (e.g., restrooms, shade, parking)
Accessibility and connectivity
Aesthetics and environment
Overall maintenance and usability
25
Wheat Ridge - Parks Level of Service
Scored 307 Components at:
4 Pocket Parks
9 Neighborhood Parks
3 Community Parks
7 Special Purpose Properties
1 Greenways and Natural Areas
26
Wheat Ridge - Parks Level of Service (LOS)
General Findings
Most parks scored well for their size
Strong mix of parks and broad geographic coverage
Amenities and trail connectivity are common recommendations
Several parks scored low due to limited features or gaps in accessibility and amenities
27
LOS – One Mile Access to Outdoor Recreation
28
Placer.ai
Understand who’s using our parks
Uses anonymized cell phone data to analyze park usage trends
Complements engagement findings with actual behavior
Helps prioritize capital improvements and operational changes based on real
visitation patterns
Reviewed 7 Locations: Anderson, Creekside, Discovery, Panorama, Paramount,
Prospect, and the Recreation Center
29
Visitation Trends
~765,000 visits annually across six major parks and the recreation center
Top 3 parks for visitation were Anderson, Prospect, and Discovery
Visitation follows strong seasonal patterns, with clear summer peaks
30
Park Visitation by Month
31
Park Visitation by Hour
32
Park Dwell Time
33
Evaluated layout, maintenance, functionality, and future potential at the following locations:
Facility Assessment
Wheat Ridge Recreation Center
Active Adult Center
Anderson Building and Outdoor Pool
Parks Maintenance Shops
Richards-Hart Estate
Historic Park
The Barn at Rec Center
Berbert House
34
Facility Assessment – Common Themes Identified
Space Constraints: Significant space shortages impacting programs and staff.
Facility Capacity: Recreation Center (fitness/cardio areas) at maximum capacity during peak hours.
Group Fitness Spaces: Rooms undersized; some classes shifted into inappropriate spaces (e.g., gymnasium).
Administrative Space: Insufficient office space leading to scattered staffing.
Storage Limitations: Overflow impacting daily operations (e.g., spin bikes in gymnasium).
Condition & Maintenance: Generally well-maintained but dated finishes noted.
35Strategic Priorities
36
High-level goals that guide systemwide improvements
Rooted in data, engagement, and facility assessments
Designed to reflect community values and long-term needs
Provide a shared direction for capital, program, and policy investments
Support sustainable, inclusive, and equitable parks and recreation
Shape decisions about staffing, funding, and partnerships over time
Strategic Priorities
37
Strategic Goals
Reinvest in Aging Facilities and Infrastructure
Expand and Diversify Recreation Programs
Advance Aquatics Access and Sustainability
Strengthen Trail and Greenway Connectivity
Increase Access, Equity, and Inclusion
Pursue Strategic Acquisitions and Partnerships
Plan for Long-Term Sustainability and Funding
38Capital Recommendations
39
Pathway recommends capital
improvements to parks and facilities for
the next 10 years
Recommendations integrate community
engagement, operational reviews, and
facility assessments
Priorities are based on equity,
condition, usage, and opportunities for
reinvestment
Capital Recommendations
40
Expand Access in Underserved Areas
Focus new parks and trail investments in north Wheat Ridge and neighborhoods with limited walkability and connectivity
Enhance Comfort and Seasonal Appeal
Add restrooms, shade, and ADA routes across parks while expanding pollinator and seasonal planting efforts citywide
Strengthen Trail Visibility and Safety
Improve signage, wayfinding, and trailhead experiences while addressing user safety along the Greenbelt system
General Parks Capital Recommendations
41
New Off-Leash Dog Park with Shade and
Water
Prioritize central/southern Wheat Ridge for a
second dog park with key comfort features
Centrally Located Inclusive Playground
Design an accessible play area with ADA
features and inclusive equipment
Explore Pump Track Opportunities
Identify strategic sites for potential new pump
track development
Specialized Parks Recommendations
42
Anderson Park
Improve ADA access, path lighting, and safety
Consider ways to increase activation such as
fitness features and creekside interpretation
Prospect Park
Restore shoreline, enhance lighting, and expand
pollinator gardens
Explore westward expansion for additional open
space
Discovery Park
Improve trail connections and add seasonal
landscaping
Enhance sensory and play features for all ages
Park Specific Recommendations
43
Wheat Ridge Greenbelt
ADA upgrades at key trailheads
Security lighting installation, parallel natural-
surface trails, and riparian restoration projects
Comprehensive trail wayfinding plan
implementation
Lewis Meadows
Trail development along Lena Gulch for
improved connectivity
Riparian habitat and floodplain restoration
Formalization of access points and native
planting enhancements
Open Space Recommendations
44
Gymnasium Expansion
Add multi-functional gymnasium space to accommodate a variety of program/drop-in needs
Fitness Upgrades
Expand or redesign fitness and cardio areas for greater capacity
Improve flow, safety, and user experience
Modernize with new technology and finishes
Administrative & Storage Areas
Optimize space for improved functionality
Locker Room Improvements
Upgrade lighting, aesthetics, and finishes
Recreation Center - Recommendations
45
Pool Replacement & Infrastructure
Full pool and filtration replacement; consider new
pump house
Redesign guided by community input
Facility & Staff Upgrades
Renovate locker rooms and staff areas
Improve lobby insulation, windows, and HVAC
Program & Site Activation
Explore alternative gym uses and increase visibility
from the street.
Consider concessions and expand shade with tree
canopy.
Anderson Building and Outdoor Pool - Recommendations
46
Facility Expansion & Layout
Expand building south
Reconfigure classrooms, restrooms, and admin
spaces to relieve congestion and improve functionality
Interior Upgrades
Refresh finishes, furniture, and fixtures for comfort
and longevity
Improve restroom layout and sound control in offices
and shared spaces
Visibility & Technology
Install larger, more visible digital sign on 35th Ave
Add modern digital signage inside for wayfinding and
communication
Active Adult Center - Recommendations
47Next Steps
48
Next Steps
CAPITAL COSTING DOCUMENT DESIGN PRESENTATION AND
ADOPTION
49
Thank you!