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PC-11-01-16 CITY OF SHOREWOOD COUNCIL CHAMBERS PLANNING COMMISSION MEETING 5755 COUNTRY CLUB ROAD TUESDAY, NOVEMBER 1, 2016 7:00 P.M. MINUTES CALL TO ORDER Acting Chair Maddy called the meeting to order at 7:00 P.M. ROLL CALL Present: Acting Chair Maddy; Commissioners Bean, Johnson and Riedel; Planning Director Nielsen; and, Council Liaison Siakel Absent: Chair Davis APPROVAL OF AGENDA Bean moved, Riedel seconded, approving the agenda for November 1, 2016, as presented. Motion passed 4/0. APPROVAL OF MINUTES  October 18, 2016 Riedel moved, Bean seconded, approving the Planning Commission Meeting Minutes of October 18, 2016, as presented. Motion passed 3/0/1 with Johnson abstaining due to his absence at the meeting. 1. PUBLIC HEARING – REZONE PROPERTIES FROM R-1A, SINGLE-FAMILY RESIDENTIAL, TO R-1C, SINGLE-FAMILY RESIDENTIAL Applicant: City of Shorewood Location: 24725 through 25015 Smithtown Road and 5765 through 5830 Club Lane Acting Chair Maddy opened the Public Hearing at 7:02 P.M. He explained the Planning Commission is composed of residents of the City of Shorewood who are serving as volunteers on the Commission. The Commissioners are appointed by the City Council. The Commission’s role is to help the City Council in determining zoning and planning issues. One of the Commission’s responsibilities is to hold public hearings and to help develop the factual record for an application and to make a non-binding recommendation to the City Council. The recommendation is advisory only. He stated this evening the Planning Commission is going to consider a request from the City of Shorewood to rezone properties from R-1A, Single-Family Residential to R-1C, Single-Family Residential. The properties are located at 24725 through 25015 Smithtown Road and 5765 through 5830 Club Lane. Director Nielsen noted the procedures used in a Public Hearing. Director Nielsen explained that during its October 4, 2016, meeting the Planning Commission considered a request from Bryan Pike to rezone the properties located at 24845 Smithtown Road and 5810 Club Lane CITY OF SHOREWOOD PLANNING COMMISSION MEETING November 1, 2016 Page 2 of 10 from R-1A, Single-Family Residential to R-1C, Single-Family Residential. Mr. Pike owns the Smithtown Road property and his parents own the Club Lane property. Staff had informed the Commission that rezoning only those two parcels would be considered spot zoning and advised the Commission that should not be done. The arguments that favored the rezoning of those two lots would also apply to the other ten lots in that area. The surrounding zoning, mainly that across Smithtown Road, is all R-1C. The Minnetonka Country Club (MCC) redevelopment is being developed to R-1C standards. The lots in the development are less than 20,000 square feet but overall the density comes out to about 1.2 units per acre. Rezoning the 12 properties to R-1C would allow lots sizes of 20,000 square feet as opposed to 40,000 square feet. The lots could also be 100 feet wide; the current requirement is 120 feet. Some setbacks would be reduced as well. The R-1A zoning district requires a 50 foot front setback, a 50 foot rear yard setback and 10 foot side yard setbacks. The R-1C zoning district allows a 35 foot front yard setback, a 40 foot rear yard setback, and 10 foot side yard setbacks. Seven of the 12 lots the City is now recommending for rezoning do not conform to the R-1A standards. Some have less area than 40,000 square feet and some have less width than 120 feet. Because the City was going to consider rezoning all 12 lots a new public hearing notice had to be published. That is what is being considered this evening. During the October 4 meeting when the rezoning of the Pike lots was discussed there was discussion about what the area would look like if the properties along Club Lane are rezoned to R-1C. Currently that roadway is quite substandard in terms of its width; it is about 30 feet wide including an eight-foot-wide strip. The meeting packets contained a drawing of what an upgraded Club Lane might look like. If the Pike lots are redeveloped at some point the roadway would have to be widened and to have a cul-de-sac constructed. Mr. Pike was hoping that by combining the two lots and subdividing it into multiple lots that he could end up with five lots. Because of some unknowns it was left at a minimum of four lots. If Mr. Pike moves forward with his plan the City would be able to get enough land to make Club Lane a standard City street and to construct a standard cul-de-sac turnaround. During the October 4 meeting residents living along Club Lane indicated that drivers drive down Club Lane in error and end up turning around in the residents’ driveways. He explained that Mr. Pike expressed concern about having to give the City 20 feet to widen Club Lane. From staff’s perspective that is the only option. The lots on the east side of the roadway do not have the capability to be divided unless some lots are combined and then subdivided in some fashion. He clarified the widening of the roadway does not come about when the properties are rezoned. The widening would happen if Mr. Pike develops the lots or sells them to someone who would develop them. Nielson noted that staff recommends rezoning the 12 parcels to R-1C to be consistent with the Shorewood Comprehensive Plan. Commissioner Bean stated on the drawing for what an upgraded Club Lane might look like there is a narrow sliver of land that comes down on the east side of the cul-de-sac. Director Nielsen explained that is an 8.5 foot strip that runs the entire length of Club Lane. Bean asked if that would be vacated if the cul- de-sac was constructed. Nielsen stated that could be done but he did not think that would be a necessity. CITY OF SHOREWOOD PLANNING COMMISSION MEETING November 1, 2016 Page 3 of 10 Commissioner Johnson stated he assumed that the area for the cul-de-sac would come from one of the Pike properties. Director Nielsen confirmed that. Johnson stated when the cul-de-sac was discussed the last time it is his recollection that the discussion was about it going into the MCC site. Nielsen explained there is no right-of-way (ROW) to get the cul-de-sac down below the Club Lane properties on the south end. Commissioner Bean asked if the cul-de-sac would accommodate emergency vehicles. Director Nielsen responded yes and explained it would be the same size as the cul-de-sacs on roadways that intersect with Smithtown Road on the north. Acting Chair Maddy opened the Public Testimony portion of the Public Hearing at 7:13 P.M. Mary Beth Knopik, 24930 Smithtown Road, stated her property is on the north side of Smithtown Road, across from properties that would be rezoned. She noted she was in favor of the rezoning. She stated she thought the quadrant on both the north and south side of the street is a unique futuristic property. She explained there are developers who want to develop lots on the south side of the roadway. There is a vast amount of property available on the north side of the roadway. She noted that her property is bordered by a duplex. She asked if that is multiple housing. She asked how to address questions about the zoning if she decides to sell her property. Ms. Knopik stated a group met with staff a few weeks ago to discuss subdividing properties. That was the impetus for her bringing questions before the Planning Commission. She then stated she would like a futuristic plan that would allow for affordable housing; something similar to the project that was done near Eureka Road and Highway 7 with duplex type combinations. She asked that be given some consideration when the area is developed in the future. Aaron Hatz, 5765 Club Lane, noted that his property is east of Club Lane across from the Pike properties (24845 Smithtown Road and 5810 Club Lane). He stated that combining the Pike properties and then subdividing them into four parcels makes sense to him. But, subdividing it into five parcels does not. He asked when he would have an opportunity to voice his concerns about the five. Director Nielsen reiterated that the rezoning of the lots does not divide the properties. He explained a combination/subdivision would be considered as a separate item with a separate public hearing. All property owners within 500 feet of the properties would be notified that it was going to be considered. He clarified that residents do not get a vote on planning items. The public hearing is to allow residents to provide public comment. Mr. Hatz stated it was his understanding that Mr. Pike was trying to get the properties rezoned so a builder would buy them. In response to a comment from Mr. Hatz, Director Nielsen explained the City considers Club Lane to stop at its widest point. Mr. Hatz stated that Mr. Pike has indicated he did not want all of the land needed to widen Club Lane to come from his properties. He asked who would decide that. Director Nielsen explained there would be a public hearing for combining/subdividing the Pike properties. The Planning Commission would discuss the proposal and make a recommendation to Council. Acting Chair Maddy closed the Public Testimony portion of the Public Hearing at 7:18 P.M. CITY OF SHOREWOOD PLANNING COMMISSION MEETING November 1, 2016 Page 4 of 10 Commissioner Johnson asked if the Planning Commission is also being asked to make a recommendation on the roadway and cul-de-sac this evening. Director Nielsen stated no and noted that the roadway upgrade diagram was for illustration purposes only. Commissioner Riedel asked what the immediate impact would be of rezoning the properties. Director Nielsen reiterated the front and rear yard setbacks would be less than they currently are. Bean moved, Riedel seconded, recommending approval of the rezoning of the twelve properties located at 24725 through 25015 Smithtown Road and 5765 through 5830 Club Lane from R-1A, Single-Family Residential to R-1C, Single-Family Residential. Motion passed 4/0. Director Nielsen noted Council will consider this item during its November 28 meeting. Acting Chair Maddy closed the Public Hearing at 7:23 2. PUBLIC HEARING – COMPREHENSIVE PLAN AMENDMENT TO MODIFY THE BOUNDARY BETWEEN SHOREWOOD AND EXCELSIOR Applicant: The Waters Senior Living Location: 22920 Highway 7 and 723 Water Street Acting Chair Maddy opened the Public Hearing at 7:23 P.M., noting the process will be the same as for the previous item. He stated during this Public Hearing the Planning Commission is going to consider an amendment to the Shorewood Comprehensive Plan that would modify the boundary between Shorewood and Excelsior at 22920 State Highway 7 and 723 Water Street for The Waters Senior Living. Director Nielsen explained that Jay Jenson, representing The Waters Senior Living, has arranged to purchase the properties at 22920 State Highway 7 and 723 Water Street for the purpose of redeveloping the sites as part of a senior housing project at those addresses. It would straddle the current boundary between Shorewood and Excelsior. Just over two-thirds of the property is located in Shorewood and the rest is located in Excelsior. The plan is to demolish the existing buildings on those properties. The Waters Senior Living would construct a senior living facility on the site called The Waters of Excelsior. Both parcels located in Shorewood are zoned C-1, General Commercial. The northerly parcel is occupied by the garage structure for the apartment building. The southerly parcel is occupied by a vacant restaurant building, perhaps best known as the Hilltop. The Excelsior parcel is zoned R-3, Multiple Family Residential and is occupied by an apartment building. According to Hennepin County tax records, the Excelsior parcel contains 23,058 square feet of area. The two Shorewood parcels contain 58,039 square feet. The total site area would be 81,097 square feet. He displayed a copy of the proposed site plan. He noted that it is his understanding the Excelsior Council has granted Concept Stage approval of a planned unit development (PUD) and he assumes that is subject to working out the land arrangements. He stated the properties relate better, geographically, to Excelsior than they do to Shorewood. Also, Excelsior serves the properties with utilities (both sewer and water). He noted that discussions relative to this project have been going on for quite some time. CITY OF SHOREWOOD PLANNING COMMISSION MEETING November 1, 2016 Page 5 of 10 He explained that when Shorewood was initially approached by the developer Shorewood suggested three possible alternatives for addressing the boundary line issue: 1. Excelsior could annex the Shorewood portion of the project. 2. Shorewood could annex the Excelsior portion of the project. 3. The project could be developed across municipal boundaries. Excelsior was given the choice of the three and it chose to annex the Shorewood properties. The two properties located in Shorewood currently generate some tax revenue and they were capable of generating considerably more. If Shorewood would have chosen to annex the Excelsior property and Excelsior agreed to that. Shorewood offered to pay Excelsior a proportionate share of future tax income, in perpetuity. When Excelsior chose to annex the properties it originally balked somewhat about giving Shorewood a proportionate share of future tax income in perpetuity. It is his understanding that an agreement has been reached, at least in principle, whereby Shorewood would receive its fair share of future taxes. The project is to be developed through tax increment financing (TIF). The increased taxes from the project do not start to be realized for about 25 years. Shorewood would continue to receive its current base tax over the TIF period. The attorneys for the two Cities are in the process of preparing an annexation agreement. The agreement would set forth the conditions of the detachment and annexation of land. He noted that staff recommends approval of the amendment to the Shorewood Comprehensive (Comp) Plan that takes land out of Shorewood and adjusts the Shorewood boundary subject to the execution of the annexation agreement. Nielsen then noted Mr. Jenson was present. Acting Chair Maddy asked if the decision has been made about how the taxes will be split between the two Cities. Director Nielsen explained the original suggestion was a 60/40 split with Shorewood getting 60 percent. Based on the amount of land in Shorewood staff has advised Council that the split should look more like 70/30. Staff has not heard back from Excelsior about that. Director Nielsen stated he thought there is a meeting the week of November 7 to discuss the annexation agreement. Acting Chair Maddy asked why the TIF would be in place for 25 years. Director Nielsen explained it is his understanding that is what it would take to make that project work. The land costs are higher than what the developer had anticipated. Nielsen stated he does not think the 25-year TIF term has been finalized. Commissioner Bean clarified the Planning Commission is not commenting on the development of the project. It is commenting on the amendment to the Comp Plan to reflect the detachment of the two parcels of land. Director Nielsen explained that even when there was discussion about the development straddling both cities there had been an informal agreement that Excelsior would control the planning aspects of the CITY OF SHOREWOOD PLANNING COMMISSION MEETING November 1, 2016 Page 6 of 10 project, processing it and permitting and permit review for it. The project relates more to Excelsior in part because of surrounding land. Commissioner Bean stated after the Comp Plan is amended and the land detached and annexed The Waters of Excelsior project could collapse. Director Nielsen stated Shorewood would still collect taxes on that land. Bean asked if the owners of the Hilltop parcel have paid all of the taxes due. Nielsen did not know. Acting Chair Maddy asked if there is any way to get Excelsior to take the sliver of land near that project site which would result in straightening out the border a little. Director Nielsen stated staff could suggest that and noted that is not part of this Comp Plan amendment. He explained that property has a little pond on it; therefore, it is not really developable. Commissioner Bean asked if the annexation agreement would define the 70/30 split. Director Nielsen confirmed that. Acting Chair Maddy opened the Public Testimony portion of the Public Hearing at 7:36 P.M. Jay Jenson, representing The Waters Senior Living, thanked the Planning Commission for considering this. He also thanked Director Nielsen and former City Administrator Bill Joynes for the work they have done on this for the last one and one-half years. Mr. Jenson stated The Waters Senior Living has provided its full financial pro forma to Springsted. Springsted is the financial advisor to both Cities. Springsted is analyzing whether or not his company’s return is appropriate for a tax increment “but for test” within the tax increment district statute in Minnesota. A redevelopment tax increment district has a potential term of 25 years. The Waters hopes to get the term down to 15 – 18 years. He noted that the split between 70/30 and 60/40 may sound big but it is not. The Cities’ share of the taxes after term of the TIF would be about $50,000 a year. For a 60/40 split it would be a $30,000/$20,000 split and for a 70/30 split it would be $35,000/$15,000. He stated the Excelsior Council will have a work session on November 14 before its regular Council meeting to discuss the 70/30 split idea. Acting Chair Maddy asked Mr. Jenson if the intent is to combine all three parcels into one parcel. Mr. Jenson responded yes. In response to a question from Commissioner Riedel, Director Nielsen stated the proposed zoning for the development site (the three parcels combined) would be PUD. In response to a comment from Director Nielsen, Mr. Jenson clarified the Excelsior Council will consider the final plans during its first meeting in December. Acting Chair Maddy closed the Public Testimony portion of the Public Hearing at 7:39 P.M. Johnson moved, Riedel seconded, recommending approval of the amendment to the Shorewood Comprehensive Plan to reflect the change in the Shorewood boundary for the 22920 State Highway 7 and the south portion of 723 Water Street properties subject to the execution of the annexation agreement between the Cities of Shorewood and Excelsior. Motion passed 4/0. Director Nielsen noted Council will consider this item during its November 28, meeting. CITY OF SHOREWOOD PLANNING COMMISSION MEETING November 1, 2016 Page 7 of 10 Acting Chair Maddy closed the Public Hearing at 7:43 P.M. 3. PUBLIC HEARING – ZONING CODE TEXT AMENDMENT REGARDING SHORT- TERM RENTAL OF PROPERTY Acting Chair Maddy opened the Public Hearing at 7:43 P.M. Director Nielsen explained that during its September 20, 2016, meeting the Planning Commission discussed and recommended approval of an amendment to the City Code Chapter 1004 (Rental Housing) regarding short-term rental. It basically prohibits rentals for less than 30 days. The Zoning Code text amendment being considered this evening is a follow-up to that amendment. It makes the definitions between the City Code and Zoning Code consistent. The definitions are also consistent with State Statute. He noted that he views this as a housekeeping amendment. Acting Chair Maddy asked if there would be a benefit to list short-term rental as a prohibited use in all of the residential zoning districts. Director Nielsen clarified that the rental housing code does that specifically. There is a provision in the Code that states if something is not specifically allowed then it is specifically prohibited. That issue is specific to the Rental Housing Code and it is specifically stated there. A conscious decision was made not to include it in the Zoning Code. Seeing no one present to comment on the case, Acting Chair Maddy opened and closed the Public Testimony portion of the Public Hearing at 7:45 P.M. Bean moved, Riedel seconded, recommending approval of the text amendment to the Shorewood Zoning Code regarding short-term rentals as presented by staff. Motion passed 4/0. Acting Chair Maddy closed the Public Hearing at 7:46 P.M. 4. MINOR SUBDIVISION Applicant: William Everett, Jr. Location: 5615 Covington Road Director Nielsen explained William Everett owns the property located at 5615 Covington Road. He has purchased Outlot E, Waterford, immediately east of his property with the intent of combining the two parcels and re-subdividing them into two building sites. The 5615 property is zoned R-1A/S, Single- Family Residential/Shoreland. The property lies between Covington Road to the west and Old Market Road to the east. The land drops in elevation from 1009 on the west end to 960 at the southeast corner of the site. Outlot E is zoned planned unit development (PUD). The lot size requirements for the R-1A zoning district is a minimum of 40,000 square feet and a minimum of 120 feet of width. The proposed westerly lot with the home on it will contain 72,114 square feet of area. The easterly lot will have 43,823 square feet. Both of the proposed lots would meet or exceed the requirements of the R-1A/S zoning district. He explained that although the new lot drops off as much as 20 feet toward Old Market Road, the grade at the northeast corner of the site affords a relatively gentle slope for the location of a driveway to serve that lot. The buildable area of the new lot is very level and open. He noted staff recommends approval of the minor subdivision subject to the following conditions. CITY OF SHOREWOOD PLANNING COMMISSION MEETING November 1, 2016 Page 8 of 10 1. The applicant must provide deeds for drainage and utility easements, 10 feet around each lot. 2. The applicant must provide an up-to-date (within 30 days) title opinion for review by the City Attorney. That was turned in prior to the meeting. 3. Prior to release of the resolution approving the request, the applicant must pay one park dedication fee ($6500) and one local sanitary sewer access charge ($1200). Credit is allowed for the previous home on the site. 4. Since the division itself does not result in the removal of any trees from the property, tree preservation and reforestation can be addressed at the time building permits are applied for. Nielsen then noted Mr. Everett was present. Commissioner Riedel asked if the new properties would both be zoned R-1A. Director Nielsen clarified the Outlot zoned PUD is located in the 50-foot setback so it cannot be built upon. Nielsen noted it could be rezoned at some time but it is not necessary in order to build on that lot. In response to a comment from Commissioner Bean, Director Nielsen explained the main impact of the PUD zoning is the Waterford Homeowners Association (WHA) would have architectural control over whatever gets built there. Because nothing can be built there it does not have any impact at all. Bean stated the homes on the abutting lots to the north and south that are along Old Market Road are part of the PUD. Director Nielsen confirmed that and noted those lots have a lesser setback requirement (35 feet) than the new lot will have (50 feet). Bean asked if there would be different setbacks between the front of the lot and back of the lot. Director Nielsen explained that when the applicant combines Outlot E with a portion of the Covington Road parcel the R-1A standards will apply to the entire parcel. William Everett, 5615 Covington Road, explained that when he purchased Outlot E the WHA told him that the current Outlot E zoned PUD would remain under its covenants. Because that would be in the 50 foot setback it would not be buildable. Once his request is approved he intends on talking with the WHA about releasing that sliver of land so everything could be zoned R-1A. Mr. Everett asked Director Nielsen if there is any other option for zoning the parcels other than R-1A/S for setback reasons. Director Nielsen stated he did not think so but it may be worth looking at the setbacks for the Waterford development because the setbacks are less restrictive for that development. Acting Chair Maddy asked if parcel 2 could be zoned Waterford PUD. Director Nielsen clarified that the parcel could not be forced into the Waterford PUD. If the WHA was willing to take it that PUD could be amended. Commissioner Johnson asked if that parcel would then be subject to the covenants of the WHA. Nielsen responded yes. Mr. Everett stated he would prefer to keep that parcel out of the PUD. Commissioner Bean stated he thought the WHA covered things like monuments and general landscaping around some of the intersections. It does not address the homes. Commissioner Riedel stated if the WHA thought the easterly parcel should be part of the PUD because it would be along Old Market Road perhaps it would be pertinent to discuss if that was appropriate. CITY OF SHOREWOOD PLANNING COMMISSION MEETING November 1, 2016 Page 9 of 10 Acting Chair Maddy explained the City has the authority to zone the parcel PUD but it does not have any authority to say who would be in the WHA. Director Nielsen concurred. Nielsen clarified zoning it PUD would require amending the Waterford PUD and that would require approval from the WHA. Commissioner Johnson stated if there is a change in the WHA management in the future he asked if that could impact Mr. Everett. Bean moved, Riedel seconded, recommending approval of a combination / minor subdivision for William Everett, Jr. for his property located 5615 Covington Road and Outlot E, Waterford, subject to the recommendations made by staff in its report dated October 26, 2016. Motion passed 4/0 Mr. Everett thanked the Planning Commission. 5. MATTERS FROM THE FLOOR There were no matters from the floor presented this evening. 6. OLD BUSINESS / NEW BUSINESS Commissioner Johnson stated if there is going to be a change to a developer agreement he asked if that should go before the Planning Commission. Director Nielsen stated he thought so. 7. DRAFT NEXT MEETING AGENDA Director Nielsen stated as of today there are no zoning applications for consideration during the December 6, 2016, Planning Commission meeting. That meeting will likely be a study session on some topic. 8. REPORTS • Liaison to Council Council Liaison Siakel reported on the items considered and actions taken during Council’s October 24, 2016, work session and regular meeting (as detailed in the minutes of those meetings). Siakel asked how many deer have been harvested as part of this year’s Deer Management Program. Director Nielsen stated during the first two weekends nine have been harvested. Siakel noted the new City Administrator started the previous day. His name is Greg Lerud. Acting Chair Maddy asked Director Nielsen when he is going to retire. Nielsen stated around the end of February 2017. • SLUC Director Nielsen stated he would email the notice for the upcoming Sensible Land Use Coalition session. • Other CITY OF SHOREWOOD PLANNING COMMISSION MEETING November 1, 2016 Page 10 of 10 9. ADJOURNMENT Bean moved, Riedel seconded, adjourning the Planning Commission Meeting of November 1, 2016, at 8:10 P.M. Motion passed 4/0. RESPECTFULLY SUBMITTED, Christine Freeman, Recorder