Rose hill park is in Kamloops, B.C., ~5km from the city center occupying 11 hectares in the silt benches grassland overlooking the city. Kamloops residents are fortunate to have a unique park with quality recreational amenities and a panoramic view many would call a million-dollar-view (Figure 1). Colloquialisms aside, this paper will provide a valuation of rose hill park. This is important to the residents and city officials to ensure the value is not overlooked or ignored. The city will also benefit from fully accounting for its green infrastructure and urban park assets: “Standing, intact, functioning ecosystems produce many valuable services, which are often more significant than what results from their extraction and exploitation.” (Costanza et al., 2017).
Description of Rose Hill Park Amenities
1335 Rosehill Rd, Rose Hill Park is an 11-hectare city park (“Kamloops Disc Golf Club”, n.d.) located ~5km from the center of downtown Kamloops. This dog-friendly off-leash park includes: a maintained outhouse, three picnic tables—one with a gazebo cover—a water fountain and a dog bowl filling station, a grassy play area, two tennis courts that double as four pickleball courts, access to a wide variety of hiking, walking, running and biking trails, and a full 18-hole championship level disc golf course. The park is situated under and around high voltage powerlines limiting its potential for development in an area with a highly valued panorama view of the city. The park includes parking for 20 vehicles and has overflow parking available on the roadside, and in the community mailboxes for a large portion of the residents of the subdivision above the park. Personal observations indicate that the park consists primarily of an urban park and forests biome with sparse tree coverage, ponderosa pines, bunch grass, sagebrush, and cactus.
Methodology and Results
Using a simplified hedonic pricing valuation like Sutton and Anderson (2016), I have assessed the market land value of 45 residential properties surrounding the park (BC Assessment, 2022) (Table 1), and applied the average price per hectare to Rose Hill Park. Additionally, the value of the ecosystem services provided by the park is added to this land valuation with the Urban Parks & Forests biome services value of approximately $138,000/Ha/year (“ESVD”, 2022), equaling a flow of $1,518,000 to the city in ecosystem services per year. The average value of land/Ha in the area around the park is $1.56 million (BC Assessment, 2022) (Table 1), putting the land value of the park at $17 million. Sutton and Anderson (2016) used a 5% return on the value of the asset which suggests ecosystem services per year at $850,000. The development pressures are not the same between Rose Hill Park and Central Park, but the reasoning for using the hedonic pricing method still stands. If the park is valued at less than the average value per hectare of adjacent residential property, the public will not support it; it would be switched over to residential development. Using the ESVD, 2022 database the ecosystems services provide a flow of $1,518,000 per year or an 8.9% rate of return based on the market value of the park of 17 million.
Table 1: Descriptive statistics of 45 residential properties around Rose Hill Park
|Total Value ($)||1,115,911||1,013,411||279,000||868,250||951,500||1,017,500||1,698,000|
|Land Value ($)||510,222||936,939||267,000||304,500||366,500||412,500||577,000|
|Building Value ($)||648,952||180,539||411,000||540,000||579,000||700,000||1,330,000|
|Land Size (Ha)||0.75||3.42||0.16||0.18||0.21||0.29||0.49|
|Land Value per Ha ($)||1,567,860||333,855||285,941||1,423,143||1,593,889||1,771,884||2,118,044|
|Value of Park||17,246,460|
Discussion and conclusion
Rose Hill Park is an incredibly valuable property to the city of Kamloops, this valuation is made in hopes of the proper accounting of city resources and for the advocation of further investment in parks and green infrastructure that provide benefits in so many ways.
Green infrastructure is a range of infrastructure that uses plant, or soil systems to provide a service much like gray infrastructure concrete streets, sewers, and pipelines. This can be stormwater management, biodiversity, temperature moderation, walkways…. etc. “green infrastructure is an interconnected network of green space that conserves natural ecosystem values and functions and provides associated benefits to human populations. Green infrastructure is the ecological framework needed for environmental, social and economic sustainability” (Benedict & McMahon, 2002).
The benefit of not converting the park to residential development is that its yield of 5 – 8.9% exceeds many other public projects which would yield a 3.5% as per the social discount rate commonly used in cost-benefit studies as an opportunity cost and when the benefits will be seen in less than 50 years (Boardman et al., 2010). Furthermore, residential properties at Rose Hill are large averaging 0.75 ha (Table 1), and hence on an 11 ha land, there would be only 14 houses built. Moving from public good that yields community benefits to a private good would not be accepted by the community. In addition, it is not a good investment for the city to sell the land most likely at less than $17 million, say 9 million, and invest the proceeds in another public good at the social discount rate of 3.5% for $315,000 per year when Rose Hill park provides $850K – $1.5M of ecosystem services.
With an estimated valuation of $17 million and ecosystem services in the range of $850,000 to $1,518,000 between the Sutton and Anderson 5% return and the ESVD transfer benefit assessment, an alternative approach for validation is, to use a travel cost study to more precisely value the recreational service provided, as Rose Hill West disc golf course saw over 10,000 rounds of disc golf played in 2021 (UDisc, 2022); and will be hosting the largest disc golf tournament in Canadian history seeing players travel across the country and internationally to take part in the Tournament Capital Open in 2022 (“Tournament Capital Open”, 2022). This additionally revealed preference valuation will add to the realized assets the city can account for while making decisions on future spending for recreation and land development, as well as encourage the development of more green infrastructure. If the city were to sell the land for development, there would be a net loss as the social benefits would be converted to private and the proceeds from the sale would have to be invested in other public goods that yield a return on investment that is greater than 8.9% per year. At a social discount rate of 3.5%, this would be very hard to find.
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