Edina’s tree fee raises eyebrows

Demand for five- to six-figure cash deposits for trees in Edina has sparked debate, casting doubt on the validity of the city’s tree protection ordinance. The required cash deposits can be held by the city for up to three years.

Tree fees and deposits, which are not explicitly authorized in Minnesota, are enacted as part of local government planning ordinances. Edina’s ordinance was enacted nine years ago with the stated goal of protecting its tree canopy. 

Concerns over tree fees have grown in recent years, says Nick Erickson, senior director of housing policy for Housing First Minnesota. He said it is an example of exclusionary policies designed to raise the barriers to entry into the community.

“When you have a policy that requires new-home buyers to give the city tens of thousands of dollars in cash, which the city can hold for years, it sends a message,” said Erickson. “That message is one of socio-economic exclusion.”

Complicating the discussion over the tree protection ordinance in Edina are two factors: the cash requirement rather than letters of credit and a recent Supreme Court decision. 

Cash deposits in the development space are not common, yet there is no other option, as letters of credit are not available from banks due to Edina’s unique approach. 

Concerns over the amount of money required as a deposit have increased since the Sheetz v. El Dorado ruling issued in April that administrative and legislative acts, such as ordinances, are not immune from the Takings Clause of the U.S. Constitution. 

Release of funds

Another concern from Edina residents is how and when their money held by the city will be released. The current version of the ordinance allows for the release of funds in two steps. 

First, after the certificate of occupancy (CO) has been issued and the city forester has approved that any municipal requirements have been met, the Forester will inspect the site and calculate the fee owed based on how many trees are preserved or replaced. Half of the original escrow or line of credit, minus this fee, will be released.

Second, three years after the CO has been issued, the applicant must submit a review by a certified arborist indicating new and preserved trees are still healthy. If any trees are unhealthy, the certified arborist can replace them onsite and the second half of the financial guarantee (minus the fees above) will be released. If the applicant doesn’t replace the trees onsite, the city will keep this half of the financial security.

Calls for change

The long-simmering concerns over the ordinance have caused builders and residents to call for change. 

“New tree ordinances are gaining popularity under the guise of climate action plans and protecting tree canopies, but they are going too far,” said Rebecca Remick, president and owner of Edina-based builder City Homes. “These ordinances are excessively impacting housing developers, homeowners and real estate agents, consuming significant amounts of money.”

City leaders have met with residents whose money is being held by the city, along with their builders. The subject was also the subject of a May 7 City Council work session. 

“I’m glad to see various segments of our industry addressing this issue and expressing concern as cities become stricter with these ordinances without considering economic feasibility,” Remick added. “The ordinance could lead to reduced construction and exacerbate our already limited and growing new housing supply.”

The city of Edina has not taken any action on the tree protection ordinance despite the concerns of residents.