7 PCSR 04-26-1994 '� ) AGENDA ITEM 7
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ty of / MEMORANDUM
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Rlver TO: PLANNING COMMISSION
FROM: STEVEN B. ACH, CITY PLANNER
DATE: APRIL 26, 1994
SUBJECT: REZONING REQUEST BY THE CITY
ELK RIVER, PUBLIC HEARING, CASE
NO. ZC 94-02
REQUESTED ACTION
Consider rezoning approximately fifteen (15) acres from I1 (Light Industrial)
to Rib (Single Family Residential).
ATTACHMENTS
Memo from Bill Rubin, Memo from Peter Beck, Letter from B.A. Liesch
Associates Inc., Updated Survey of the Fifteen (15) Acre Parcel, Report to the
Planning Commission dated March 22, 1994.
BACKGROUND
This item was presented to the Planning Commission at their March 22,
1994, meeting, at which time the Commission delayed action until further
information pertaining to potential financial programs available to Custom
Motors and an updated legal opinion from the City Attorney were presented.
Attached are memos from Bill Rubin and Peter Beck addressing these two
issues.
In addition, letters regarding the environmental testing conducted by B.A.
Liesch Associates, Inc., have been included. A complete report is available at
City Hall if any of the Commissioners would like to review this prior to the
meeting.
MEETING WITH AFFECTED PROPERTY OWNERS
Two weeks ago, staff met with the affected property owners to discuss the
proposed rezoning. At that time, potential financial programs were outlined,
1111 an understanding of the history regarding the proposed site for the rezoning,
and reasons behind the City's request to rezone the property were all
P.O. Box 490 • 13065 Orono Parkway • Elk River, MN 55330 • (612) 441-7420 • Fax: (612) 441-7425
Rezoning, City of Elk River Page 2
April 26, 1994
• discussed. Unfortunately, the meeting did not conclude with an agreement
by both parties to rezone the property. However, I believe a mutual
understanding of each parties interest were clearly understood.
ADDITIONAL INFORMATION
As presented at the last Planning Commission meeting, a rezoning of Custom
Motors was approved by the City in 1978. Upon further review, this rezoning
was to cover only the south 1,500 feet of the entire fifteen (15) acre parcel.
Essentially, the north half of this property has been mistakenly identified on
the zoning map as I1 (Light Industrial). Although this could be argued that
the zoning map should be corrected to accurately reflect the action taken by
the City, it would be appropriate to take formal action to correct this
oversight. Therefore, if the Commission decides not to rezone Custom
Motors, action should be taken to rezone the north parcel.
Please refer to the attached staff report dated March 22, 1994, for further
information.
RE COMMENDATION
IPStaff recommends the Planning Commission recommend approval of the
rezoning of the fifteen (15) acre site from I1 (Light Industrial) to Rib (Single
Family Residential) based on the following findings:
1. THE REZONING TO R1B IS IN COMPLIANCE WITH THE
ADOPTED COMPREHENSIVE LAND USE PLAN MAP
DESIGNATION OF MDR (MEDIUM DENSITY RESIDENTIAL)
AND HAS BEEN IDENTIFIED ON THE COMPREHENSIVE
LAND USE PLAN SINCE 1980.
2. THE INCREASED DEVELOPMENT INTEREST IN THE
WESTERN PART OF THE COMMUNITY SIGNIFIES A
CHANGE IN THE TIMES AND CONDITIONS WHEREBY THE
CITY NEEDS TO CONSIDER ESTABLISHING APPROPRIATE
LAND USE AND ZONING DESIGNATIONS FOR COMPATIBLE
DEVELOPMENT TO OCCUR.
3. THE REQUESTED REZONING OF THE FIFTEEN (15) ACRE
PARCEL WITH ESTABLISH CONTINUITY AND
COMPATIBILITY WITH THE EXISTING SINGLE FAMILY
HOMES THAT CURRENTLY EXIST ON BOTH THE EAST AND
II WEST SIDES OF THE SUBJECT PROPERTY AND ELIMINATE
zccustom.planning
Rezoning, City of Elk River Page 3
April 26, 1994
• THE INTRUSION OF LIGHT INDUSTRIAL ZONING FROM
THIS AREA.
4. BASED ON RECENT ENVIRONMENTAL ASSESSMENT OF
THE PROPERTY, SOME SAMPLING AND ANALYTICAL
TESTING HAS INDICATED A POTENTIAL HEALTH AND
SAFETY CONCERN FOR NEIGHBORING PROPERTIES AND
FUTURE DEVELOPMENT CONSIDERATIONS.
•
•
zccustom.planning
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ity of MEMORANDUM
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River
TO: STEVE ACH, CITY PLANNER
ELK RIVER PLANNING COMMISSION
FROM: WILLIAM RUBIN, ECONOMIC
DEVELOPMENT COORDINAT I ,
DATE: APRIL 1, 1994
SUBJECT: POTENTIAL FINANCING PROGRAMS:
CUSTOM MOTORS 13913 HWY 10
INTRODUCTION
At the March Planning Commission meeting, you requested information
regarding potential financing programs to assist Custom Motors with a
potential relocation from its existing site at 13913 Highway 10. The
• information found below is submitted in response to this request.
TYPICAL ELK RIVER FINANCING PROGRAMS
1. Micro-Loan Fund
The Elk River EDA, in conjunction with the City of Elk River,
established its own micro-loan program to supplement primary
financing and business/owner equity associated with expansion and/or
relocation programs in the community. Loans may be used for fixed
assets (land, building, machinery, equipment) plus working capital and
industrial inventory. Retail inventory and the refinancing of existing
debt are ineligible uses.
The micro-loan program offers great flexibility. Loans may range from
$5,000 to $50,000, and, repayment is tied to the life of the asset that is
financed (land and building: 15-20 years; machinery and equipment: 7
years). The interest rate on the loan is tied to prime, but is subject to
periodic adjustments should the prime rate fluctuate.
As loans are repaid, the principal and interest is returned to the micro-
loan pool so that additional business loans can be made.
•
P.O. Box 490 • 13065 Orono Parkway • Elk River, MN 55330 • (612) 441-7420 • Fax: (612) 441-7425
• 2. Central Minnesota Initiative Fund
The Initiative Fund is a private, non profit corporation dedicated to
strengthening the economy and enhancing the quality of life in the
fourteen-county Central Minnesota area. The initiative program
provides supplemental loan assistance to small businesses and also
provides grants to non-profit organizations. Business loans range from
$5,000 to $100,000 with the majority of the project funds coming from
private investments (primary lender and company equity).
3. SBA 504 Loan
This is a fixed-asset mortgage program to help small businesses
achieve long-term, low-interest financing for expansion and/or
relocation projects. The acquisition of land and the purchase and/or
construction of buildings are typically financed under the 504
Program. The option to finance machinery and equipment under this
program is available, too.
4. Tax Increment Financing
This is a locally administered grant program that relies on future
property tax payments to fund specific development activities such as
site acquisition, site preparation cost, demolition of blighted
structures, and the clean-up of polluted property. Because new
restrictions continue to be placed on the use of TIF, its availability in
Elk River is subject to an on-going evaluation.
5. Industrial Revenue Bonds
State and Federal law enables cities to issue long-term below-market
bonds or mortgages to assist commercial and industrial expansions.
Because the IRB is sold by the municipality, the bond issue is
considered tax-exempt and this low interest is passed on to the
expanding company in the form of a mortgage that is well below
current market rates. The company's credit worthiness is
instrumental in determining the interest rate. Real estate can be
financed over 20 years, equipment at 10 years - not to exceed the
useful life of the asset being financed. Soft costs such as architectural
fees and legal fees may also be included in the bond issue.
•
• 6. Small Business Development Loan
This loan is administered through the Minnesota Agricultural and
Economic Development Board. It makes small business loans through
the issuance of industrial revenue bonds backed by a State-funded
reserve of 25%. This reserve helps lower the interest rate on the
mortgage. Funds can be used for real-estate financing as well as
equipment purchases.
7. Environmental Clean-Up Funds
Twenty-five percent (25%) of the surcharge the City collects from the
Elk River Landfill is designated for landfill abatement. These funds
could be used to accomplish environmental clean-up on the Custom
Motor site, avoiding disposal at a landfill.
8. Summary
Most of the programs listed above can be used in conjunction with one
another. That is, an EDA micro-loan can be used to supplement, say,
conventional financing (or SBA financing) and business/owner equity.
If TIF is utilized, a new or expanding business may be reimbursed for
such things as land acquisition costs, site preparation costs, on-site
utility extensions, and off-site utility extensions, etc. Using more than
one financing program provides an additional benefit to the company
as it ensures that a competitive package is being offered. This, in turn,
helps the company preserve its funds for other needs such as working
capital, etc.
•
ACH-br
MEMORANDUM
• LARKIN,HOFFMAN,DALY&LINDGREN, LTD.
Attorneys at Law
1500 Norwest Financial Center
7900 Xerxes Avenue South
Bloomington, Minnesota 55431
Telephone: (612)835-3800
FAX: (612)896-3333
TO: Elk River Planning Commission
FROM: Peter Beck, City Attorney
DATE: April 22 , 1994
RE: Custom Motors
This memorandum is to respond to Steve Ach' s request for an
update of my September 23, 1983 , opinion with respect to the
proposed rezoning of the Custom Motors site. In preparing this
response I have reviewed the September 23, 1983 , letter, as well
as the March 22, 1994, staff report on the proposed rezoning of
the Custom Motors site.
The staff report sets forth three findings for the proposed
rezoning of the Custom Motors site:
• 1 . Rezoning to R-1B is in compliance with the City' s
Comprehensive Land Use Plan.
2 . Increasing development in the western part of the City
has created a change in circumstances .
3 . Proposed rezoning will establish continuity and
compatibility with development that is occurring around
the property.
In 1983 I advised the City that it was within the City's
legislative authority to rezone the Custom Motors site from
Industrial to Residential, assuming that the procedures and
findings for such a rezoning set forth in the Zoning Ordinance
were followed. It continues to be my opinion that the City is
within its authority in rezoning this property to bring it into
consistency with the City' s adopted Comprehensive Land Use Plan
and the development and use of the surrounding area.
At Steve Ach' s request I will attend the Planning Commission
meeting on April 26, 1994, and will be happy to answer any
questions you may have.
Attachment
cc: Steve Ach
411
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�TLvEN 0,LEYIN September 23 , 1983 LINK J. PIRcsTDNE
Mr. Robert C. Middaugh
City Administrator
City of Elk River
505 U.P.A. Drive
Elk River, Minnesota 55330
• Re : Custom Motors Site
Dear Bob :
This letter is in response to your request for our opinion with respect
to the proposed rezoning of the Custom Motors site.
BACKGROUND
It is our understanding that the Custom Motors site is located in an
area of the City of Elk River (the City) which is primarily residential
and which is designated by the City' s land use map for residential use.
However, the Custom Motors site itself was rezoned from A-1 , Agricultural
Conservation District, to 1-2 Medium Industrial District, b
th
Council on November 3, 1978, and retains this zoning designation attthe
present time. The City Council also, on November 3 , 1978 , granted a
Conditional Use Permit to Custom Motors
a salvage yard, bodyshop, Permitting use of the site as
The Conditional Use yPermitmwasagrantedresubjepair ctetoacertainkconditions,
the most significant of which is appropriate screening. It is our
understanding that the site has been used as a salvage yard, bodyshop,
mechanical repair area and truck dealership in the period since 1978,
and that, while there was some delay in doing so, the required screening
has now been put in place.
You have advised us that the Planning Commission, in connection with a
comprehensive review of nonconforming in
land uses in the City, has determined�that othe sindustrialnusexofrthe®
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LARHIN, HOFFMAN, DALY & LiNE UEN, Imo.
Mr. Robert C. Middaugh
City Administrator
September 23, 1983
Page Two
Custom Motors site is inconsistent with the City' s land use map and
is an inappropriate use in this residential area of the City. The
Planning Commission has therefore recommended that the site be rezoned
from industrial to residential. Your question is whether there would
be any legal restrictions on such a rezoning.
ISSUE
May the City rezone from industrial to residential uses a parcel of
land located in an area of the City designated for residential use
by the City' s land use map, and actually used primarily for
residential purposes, where the City only five years previously rezoned
the property to Industrial and issued a Conditional Use Permit
permitting specific industrial uses on the property?
DISCUSSION
411
The City clearly has a right to carry on comprehensive municipal
activities (such as the preparation of a land use map) , adplanning
zoning regulations, pursuant to Minnesota Statutes §§ 465 .353o
lement
The Minnesota Courts have consistently held that zoning activities are
legislative matters and that rezonings are legislative acts which will
be sustained unless arbitrary, capricious or unreasonable. See: Kiaes
v. City of St. Paul, 62 N.W.2d 363 (1953) ; and Barton Construction Co. /
Inc. v. City of Afton, 268 N.W. 2d 712 (1978) . This is true even though
zoning activities may place substantial restrictions on the use of
property (see: McShane v. City of Faribault, 292 N.W. 2d 253 (1980) ) or
have an adverse effect on property values . (SeA : County of Rar►tsev v.
Stevens, 283 N.W.2d 918 (1979) ) .
The law in this state is that no property owner has a vested right in
the current zoning of his property. (See: Property Research and Develo?ment
Co. v. City of Eagan, 289 N.W.2d 157 ( $"0} ) .
ordinance bears a reasonable relationshipto helAl long It a safety
or welfare , the courts will not interferpublic
withthelegislativefdetermination
of a municipaly in zoning matters. (See: Perron v. Village of New
Bri_____ght il, 145 N.W.2d 425 (1966) ) .
Apply these principals to the issue presented by
the ro
of the Custom Motors site, it is our conclusion that pheresed is noZoninlegal
prohibition against the proposed rezoning, assuming that it is being
•
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Robert C. Middaugh
City Administrator
September 23, 1983
Page Three'
proposed and is implemented for the purpose of protecting the public
health, safety and welfare.
It is clear that the City has the legislative authority to implement
the proposed rezoning, and that the rezoning will be appropriate
and upheld if it is not arbitrary, capricious or unreasonable. The
fact that the property was zoned industrial just five years ago, and that
a Conditional Use Permit permitting the current use was granted at that
time, may give rise to an argument that rezoning the property at this
time is arbitrary, capricious and unreasonable. However, if the
City can demonstrate a change in circumstances since 1978 , and can
show that the proposed rezoning to residential is reasonably related
to the public health, safety and welfare, the rezoning would be upheld
if challenged. We feel that it is significant that this proposed rezoning
arises out of a comprehensive review of nonconforming, inconsistent and
inappropriate uses throughout the City, and that it is proposed in
connection with several other rezonings of a corrective nature.
. Our opinion also assumes that the nonconforming use sections of the
City Zoning Ordinance will apply to the Custom Motors site if it is
rezoned, and that the present use of the site will be permitted to
continue subject to the restrictions set forth in those sections of the
Ordinance .
Please call if you have any questions.
Sinc rely
Pet K. Beck, for
LARKIN, HCFFMAN, DALY & LINDGREN, ' LTD.
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B.A.LIESCH ASSOCIATES, INC. 13400 15TH AVE. N. MINNEAPOLIS, MN 55441 612/559-1423 FAX:612/559-2202
January 18, 1994
Mr. Mike Boelter
600 Highway 10
Elk River, MN 55330
RE: Results Recent Testing of your Wells
Dear Mr. Boelter:
Enclosed is a copy of laboratory analytical results from your water supply wells which we
recently collected. The data from Legend Technical Services, Inc. shows no volatile organic
compounds (VOC) were detected in either well.
• Lead was detected in both wells at concentrations slightly above the recommended allowable
limit (RAL) for drinking water of 0.020 mg/1 established by the Minnesota Department of
eal . This standard was recently revised downward from 0.050 mg/l. Lead can occur from
a variety of sources and is naturally occurring to some extent. At this time, we do not believe
the lead in your water supply is from Custom Motors as no VOC compounds were detected
which are anticipated to migrate faster than lead. Other possible sources of lead are pipe solder,
suspended solids or on-site sources.
You may wish to consider using bottled water or filtering your drinking water. RALs are
established based on a lifetime of exposure, usually 70 years, assuming a consumption of two
(2) liters per day of water, and then set at some risk level where a fraction of the population
would experience some health effect usually the one in one hundred thousand or one in one
million level.
Should you have any questions, please contact Steve Rohlf or me. Thank you.
Sincerely,
B.A. LIESCH ASSOCIATES, INC.
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• ohn Lichter, P.E.
cc: Mr. Steve Rohlf
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LIEICH
B.A. LIESCH ASSOCIATES, INC. 13400 15TH AVE. N. MINNEAPOLIS, MN 55441 612/559-1423 FAX 612/559-2202
MEMORANDUM
Y.'
TO: THE CITY OF ELK RIVER
FROM: JOHN LICHTER, B.A. LIESCH ASSOCIATES
.J
DATE: JANUARY 21, 1994
RE: CUSTOM MOTORS SITE SCREENING AND ASSESSMENT
Recently, Liesch was requested to conduct reconnaissance soil sampling at this property
on Highway 10. Testing and groundwater monitoring of off-site wells adjacent to this
Property was also completed. A report dated November 17, 1993 was submitted which
• summarizes the results of soil testing on the Property. Follow-up groundwater
monitoring was completed in December 1993. This work was initiated based on the
City's desire to determine environmental conditions on the Property and how these
conditions may affect potential future land use.
Assessment activities to date appear to indicate environmental impacts are predominantly
limited to surficial soils in high activity areas, including, but not limited to, the engine
and transmission storage area, vehicle processing areas and traffic pathways. Soils in the
vicinity of typical automobile storage areas do not appear to be problematic, as field
screening measures and analytical test results did not indicate parameters above detection
limits, although some minor staining was observed in these areas.
Additional soil sampling and analytical testing would be required to confirm
reconnaissance soil sampling findings, as well as to further define.' th; ex ori ::nd
magnitude of impacts already identified, in particular, the processi .g jb and
engine/transmission storage area. Additionally, TCLP analyses may be required on soils
with high lead levels to evaluate mitigation and disposal options (to determine if the soils
would be regulated as hazardous):There is also the possibility of localized groundwater
contamination suggested by data from the engine/transmission storage area, permeability
of soils, and anticipated shallow depth to ground water.
• To evaluate off-site groundwater impacts, Liesch tested two wells on the Boelter property
north and anticipated downgradient of the Custom Motors site. These tests did not find
Page 2
January 21 , 1994
any evidence of volatile organic compounds (VOCs) in either well. Lead was present
slightly above the recommended allowable limit (RAL) for drinking water, however,
based on available data collected to date, Liesch does not believe this is associated with
the Custom Motors operation.
To mitigate environmental concerns on the Custom Motors parcel, several items must be
considered.
1. Work completed by Liesch was a screening effort to identify possible problem
areas and does not delineate the comlpete areal extent of contamination. Further
work is needed to accomplish this.
2. Custom Motors has implemented several management practices to reduce
environmental problems but it appears additional items should be considered.
These include the use of concrete pads to retain vehicle fluids, conducting certain
operations under roof, preventing run on into vehicle disassembly areas and other
methods to prevent vehicle fluid loss.
• 3. Some soil and possibly limited groundwater remediation may be necessary to
achieve environmental standards for residential development. The Minnesota
Department of Health has recently established a soil lead level of 300 mg/kg for
residential areas. Data from Liesch's work suggests soil lead levels in some areas
of the site significantly exceed this value (up to 9400 mg/kg near the garage).
Implementation of additional containment measures, further soil assessment and limited
soil clean-up at this time would minimize further contamination and provide expectations
of meeting the goal of possible residential use for the Property.
maw:ENV/64102/memo12194.wp
•
B.A.LIESCH ASSOCIATES, INC. 13400 15TH AVENUE NORTH MINNEAPOLIS, MINNESOTA 55441
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