Kalihi to Ala Moana School Impact Fees
In May 2017, the Board of Education designated a Kalihi to Ala Moana School Impact Fee District (the “KAM District”), which will affect the area and the half mile radius around each planned rail station within the KAM District. Developers should be aware that pursuant to Section 302A-1603, Hawaii Revised Statutes (“HRS”), any person who seeks to develop a new residential development within a designated school impact district requiring either (1) county subdivision approval; (2) county building permits; or (3) condominium property regime approval will be required to dedicate land or pay a fee in lieu of dedication, and pay a construction impact fee (collectively, the “School Impact Fee”).
Exemptions:
A project within the KAM District is exempt from paying the School Impact Fee if any of the following apply:
- The project permanently excludes school-age children (i.e. senior assisted living facilities)
- The project is or will be paying the transient accommodations tax
- The project is nonresidential
- The project has an executed education contribution agreement or other like document with the Department of Education (“DOE”) for the contribution of school sites or payment of fees for school land or construction
Land Dedication or Fee In Lieu
If a new residential development contains less than fifty units then the owner or developer must pay the fee in lieu of dedicating land. If a new residential development contains fifty or more units then the owner or developer may either designate land to be dedicated or pay a fee in lieu of dedication. The DOE determines whether to require land dedication or the payment of a fee in lieu, or a combination of both, by considering:
- The topography, geology, access, value and location of the land available for dedication
- The size and shape of the available land
- The location of existing or proposed school facilities
- The availability of infrastructure
Calculation of Land Dedication
Land dedication is calculated according to HRS § 302A-1606 by multiplying the projected number of new students generated within a proposed impact district by the number of dwelling units in the development and the average acreage per student provided in recent new schools statewide required for elementary, middle, and high schools. The results are then added together for the total acreage required from each unit in the project. Designated land for dedication must be conveyed to the State upon completion of the subdivision improvements and any offsite infrastructure necessary to serve the land. The following table was calculated by the DOE’s most recent fee analysis for the KAM District.
|
School Type |
KAM Student Generation Rate |
Number of Units per Project |
Average Acres per Student |
Land Fee in Acres for 1 Unit |
Land Fee in Acres for 100 Units |
|
Elementary |
0.06 |
1 |
0.00333 |
0.0002 |
0.02 |
|
Middle |
0.03 |
1 |
0.005 |
0.00015 |
0.015 |
|
High |
0.03 |
1 |
0.005 |
0.00015 |
0.015 |
|
Total Acreage for KAM Proposed Units |
0.0005 |
0.05 |
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Calculation of the Fee in Lieu
The fee in lieu of land dedication is determined by multiplying the total school land requirement by the value per acre of potential future school sites. In determining the value per acre for any new residential development, the fee simple value of the land identified for the new or expanded school facility will be based on the appraised fair market value. Before any building permit is issued, the owner or developer and the DOE will enter into a written agreement specifying when payment will be due. The DOE’s current value per acre and fee in lieu per unit is shown below.
|
School Type |
Value per Acre from Appraisal |
Land Fee per Unit (Acres) |
Fee in lieu per Unit |
|
Elementary |
$7,987,508 |
0.0002 |
$1,597 |
|
Middle |
$5,743,452 |
0.00015 |
$862 |
|
High |
$5,473,286 |
0.00015 |
$821 |
|
Total fee in lieu of land per unit |
$3,280 |
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Calculation of the Construction Impact Fee
The construction impact fee is calculated according to HRS § 302A-1607. Owners or developers are required to provide 10% of all new school construction costs needed to house students generated by the new residential development. The formula is calculated by multiplying new student generation rates per unit by the school construction cost per student, percentage of existing students in permanent buildings and construction cost district factors. This formula is calculated for elementary, middle and high schools and then added together. Before any building permit is issued, the owner or developer and the DOE will enter into a written agreement specifying when payment will be due. According to the DOE’s most recent fee analysis, construction impact fees will be $584 per unit.
|
School Type |
KAM Student Generation Rate |
Recent School Construction Costs per Student |
Discounted by the Percent of Statewide Classrooms in Permanent Structures |
Construction Cost Factor for Honolulu |
Number of Unit in the Project |
Construction Cost per Unit |
10% of Cost |
|
Elementary |
0.06 |
$48,084 |
0.83% |
1.0 |
1 |
$2,395 |
$240 |
|
Middle |
0.03 |
$52,928 |
.89% |
1.0 |
1 |
$1,413 |
$141 |
|
High |
0.03 |
$79,401 |
0.85% |
1.0 |
1 |
$2,025 |
$203 |
|
Total Construction Cost per Unit |
$584 |
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Current Status of Fee Collection & Application to Future Projects
The DOE currently has not set an effective date for the collection of impact fees. Once an effective date is set, all new residential projects that are not otherwise exempt will have to pay the school impact fee.