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7.2 SR 12-07-2020it ci Elk* River Request for Action To Item Number Mayor and City Council 7.2 Agenda Section Meeting Date Prepared by Public Hearings December 7, 2020 Chris Leeseberg, Senior Planner Item Description Reviewed by Interim Use Permit to Allow Duplex in the R1a Zack Carlton, Planning Manager Zoning District— continued from 11/16/20 Reviewed by Cal Portner, City Administrator Action Requested Approve, by motion, the Interim Use Permit with the following conditions: 1. The Interim Use shall terminate upon sale or transfer of ownership. 2. The property must have a rental license for the duration of the two-family rental operation. 3. The structure must be inspected by the building official and must comply with all building and fire codes for a two-family rental building. 4. The Interim Use Permit will be recorded against the property to put any future buyers on notice that the Interim Use Permit will not run with property. 5. The structure shall be returned to a single-family home prior to sale or transfer of ownership. This shall include, but not limited, removing anything that physically separates the two spaces, removal of extra meters (gas and/or electric), one postal address. Background/Discussion The property is zoned R1-a, single-family residential, and multiple family residential structures are not an allowed use in this district. The applicant is requesting an Interim Use Permit (IUP) to utilize the single-family home as a two -unit multiple family building. City Council Meeting During the November 16, 2020, City Council meeting, the applicant asked for the item to be postponed so they could contact Sherburne County to inquire what tax implications there would be on the property if allowed as a multifamily use. According to the applicant, the taxes would not change at all and they would like to proceed with their request. The Elk River Vision A n elcoming community with revolutionary and spirited resourcefulness, exceptional service, and community engagement that encourages and inspires prosperity. P I I E I 1 0 IY NATURE Updated. August 2020 Mission/Policy/Goal ■ Opportunity to live, work, and play ■ Responsibly grow ■ Meet changing needs - Agile Attachments ■ City Council Memo dated November 16, 2020 Request for Action ver To Item Number Mayor and City Council 7.2 Agenda Section Meeting Date Prepared by Public Hearings November 16, 2020 Chris Leeseber , Senior Planner Item Description Reviewed by Interim Use Permit to Allow Duplex in the R1a Zack Carlton, Planning Manager Zoning District Reviewed by Cal Portner, City Administrator Action Requested Approve, by motion, the Interim Use Permit with the following conditions: 1. The Interim Use shall terminate upon sale or transfer of ownership.- 2. The property must have a rental license for the duration of the two-family rental operation. — -- 3. The structure must be inspected by the building official and cR 33 must comply with all building and fire codes for a two-family rental building. 4. The Interim Use Permit will be recorded against the property _ • to put any future buyers on notice that the Interim Use Permit - RR will not run with property. 5. The structure shall be returned to a single-family home prior `__Hwy ., is to sale or transfer of ownership. This shall include, but not cR 12 limited removing anything that physically separates the two spaces, removal of extra meters (gas and/or electric), one postal address. Staff continues to recommend: y 6. The applicant shall submit a cash escrow in the amount of $5,000 to ensure compliance with the Interim Use Permit conditions. figure I - Background/Discussion The property is zoned R1-a, single-family residential, and multiple family residential structures are not an allowed use in this district. The applicant is requesting an Interim Use Permit (IUP) to utilize the single-family home as a two -unit multiple family building. Planning Commission The Planning Commission did not have an issue with the request, but they wanted to make sure there was a date or event to identify the end of the IUP, as required by the IUP standards. The Elk River Vision P I 1 E I E I I Y A avelcoming community With revolutionary and spirited resourcefulness, exceptional NATURE service, and community engagement that encourages and insires pro perity. Updated. August 2020 During the public hearing, the applicant indicated they did not agree with condition #6 which stated: The applicant shall submit a cash escrow in the amount of $$5,000 to ensure compliance with the Interim Use Permit conditions. They stated they have already spent a great deal of money cleaning up the property and tying up $5,000 for an uncertain amount of time would be a financial burden for them and they have no intention of selling property in the foreseeable future. The Commission discussed the acceptable length for this IUP. They were concerned with the comments made by the applicant that they had no intention of selling the property in the foreseeable future. The Commission believes this is not the intent of the IUP process. Most of the Commissioners agreed with the applicant's statement regarding the escrow and discussed other options, such as a letter of credit. The Commission recommended approval of the request, removing condition #6, by a 5-2 vote. The two opposing Commissioners wanted a condition addressing the escrow/letter of credit. The Commission believed the City Council could include a condition, if they felt necessary, addressing the escrow/letter of credit. The $5,000 escrow condition was introduced in March of 2020 with a IUP request asking for the same temporary use allowing a multiple family dwelling to be located on a single-family property. The Commission recommended approval of that request and the City Council approved the request, both actions included the $5,000 escrow condition. Mission/Policy/Goal ■ Opportunity to live, work, and play ■ Responsibly grow ■ Meet changing needs - Agile Attachments ■ Planning Commission Memo dated October 27, 2020 Request for Action Ciry nf Elk River To Item Number Planning Commission 4.2 Agenda Section Meeting Date Prepared by Public Hearings October 27, 2020 Chris Leeseberg, Senior Planner Item Description Reviewed by DeMars, LLC - 9754 Viking Blvd. NW Zack Carlton, Planning Manager ■ Interim Use Permit to allow a duplex in the R- Reviewed by 1a zoning district, Case No. IU 20-02 Action Requested Recommend, by motion, approval of an Interim Use Permit with the following conditions: 1. The Interim Use shall terminate upon sale or transfer of ownership. 2. The property must have a rental license for the duration of the two-family rental operation. 3. The structure must be inspected by the building official and must comply with all building and fire codes for a two-family rental building. 4. The Interim Use Permit will be recorded against the property to put any future buyers on notice that the Interim Use Permit will not run with property. 5. The structure shall be returned to a single-family home prior to sale or transfer of ownership. 6. The applicant shall submit a cash escrow in the amount of $5,000 to ensure compliance with the Interim Use Permit conditions. Background/Discussion The property is zoned R1-a, single-family residential, and multiple family residential structures are not an allowed use in this district. The applicant is requesting an Interim Use Permit (IUP) to utilize the single-family home as a two -unit multiple family building. The structure was built in 1880 as a single-family home. The home is in a single-family residential district but has been converted to a two -unit multi -family structure, without permits, by a previous owner. The applicant purchased the property in July 2020 and is requesting to operate the home as a duplex with two rental units within the building. The Elk River Vision A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community engagement that encourages and inspires prosperity. pIIEIEI 11 NATUREI Updated. August 2020 The structure looks like a single-family home in a single-family district but the home has not received any building permits to convert the home to a multi -family building, nor does the city have any documentation indicating the property previously received approval to operate as a multi -family use. Applicable Regulations Before the city council may authorize an interim use, it must make the following findings: 1. The period of time for nvhich the interim use permit is to be granted mill terminate before any adverse impacts are felt upon adjacent properties. The area is rural in nature and with the conditions, no adverse impacts should be felt upon adjacent properties. The applicant also owns the property immediately to the west and plans to build a single-family home. 2. There is adequate assurance that the property will be left in suitable condition after the use is terminated. The use might not be left in a condition suitable for a single-family home upon termination of the IUP. The applicant purchased the property in its current state believing it could function as a multi -family home. If approved, when the IUP terminates the city would be back to having the property in its current condition unless the city requires conversion to a single-family home and secures an appropriate deposit to ensure compliance with the conditions. 3. The use is similar to uses alloaved in the Zoning district in avhich the property is located. Single-family residential uses are allowed in the single-family zoning district. There are no similar uses (multi- family) in the neighborhood. An IUP will ensure the use does not become a permanent use in the district. 4. The date or event that mill terminate the use can be identified with certainty. Staff is recommending the IUP terminate upon sale or transfer of ownership. The included conditions require conversion to a single-family structure and secures an appropriate deposit to ensure compliance with the conditions, the termination of use may be identified with certainty. 5. Authorising the use mill not impose additional costs on the public if it is necessary for the public to take the property in the future. Additional costs could be incurred returning the structure back to a condition where it would not be mistaken as a multi -family structure. If the city secures an appropriate deposit to ensure compliance with the conditions, the public should not be imposed with additional costs. 6. The applicant and user agree to all conditions that the city council deems appropriate for authori.Zation of the interim use. The IUP will need to be approved with conditions approved by the City Council. 7. The applicant provides assurances deemed adequate by the city council that the use avill terminate as provided in the interim use permit. The city council may require the applicant to deposit a cash amount moth the city, orprovide some other form of security, to ensure compliance with this criteria. Again, staff recommends the IUP terminate upon sale or transfer of ownership. If the city requires the conversion to a single-family structure and secures an appropriate deposit to ensure compliance with the conditions, the use can be terminated as provided in the IUP. 8. Authori.Zation of the interim use mill not result in adverse effects on the public health, safety, or welfare. With the conditions, the proposed use should not result in adverse effects on the public health, safety, or welfare. The proposed interim use is consistent nrith the City of Elk River Comprehensive Plan and conforms to the city's Zoning regulations. The use is within the rural residential land use designation of the Comprehensive Plan and includes a target density of one dwelling unit per 2.5 acres of land. Including the two properties owned by the applicant, the density would be approximately one dwelling unit per 3.16 acres — within the guidance of the comprehensive plan. The zoning ordinance does not allow two-family residential structures in the R-la zoning district, but the use will need to comply with the rental license ordinance and the state building code to operate as a duplex. Mission/Policy/Goal ■ Opportunity to live, work, and play ■ Responsibly grow ■ Meet changing needs - Agile Attachments Location Map Applicant's Narrative Site Photos 713 75 5 A 2.1 V[kinq_ 40 ,75-125-1200 Mar , LLC Interill-I U-1 Se Peril -lit 75-125-1103 a EILk. Case No.- Ili 20-02 River— Project Narrative — 9754 Viking Blvd. We purchased 9754 Viking Blvd. in July of 2020 under the impression that the duplex was legal and acknowledged by the City of Elk River and rented as such. Not only did the seller leave out the information that it was illegally rented without a rental license, she sold it as a duplex requiring us to set-up a business and purchase the property with a commercial loan. As a current employee of the City of Anoka, which has Anoka Municipal Utility as a department of the City, I felt I was doing my due diligence of checking the legality through the City of Elk River by calling into Elk River Municipal Utility to see if they were aware that it was a duplex and being rented that way. Staff at ERMU informed me that there were three separate meters, with tenants currently living in the upper unit with their own waste and electric bill, but the lower unit was vacant, therefore as the landlord, I would need to put utilities and garbage for the lower unit and garage into mine or the business' name. This was a clear indication that the property was a duplex and acknowledged as such by the city utility. They also acted as a department of the city as they were able to share with me future city plans as I asked about whether the city had the property marked for city sewer and water in the near future and they informed me that this property is on the 20-yr. plan. I also inquired if I would need to convert to city sewer and water after installing a new septic and well. This was important to me because we purchased both parcels of this 10-acre lot with the intention of building our dream home on the parcel adjacent to the current duplex farm home. We purchased the property through a commercial loan at the Bank of Elk River. As a former Commercial Administrative Assistant at First National Bank of Elk River, I'm aware that property tax information should have been pulled during the loan administration process (which it was) and therefore, again, this would have been brought to our attention if it was classified as a Single -Family Home rather than a Multi- family home before given the loan to purchase. So again, based on this, I completely felt comfortable with the legality of this purchase before it was completed. As honest and well-intentioned landlords, after closing on the property, we called in to request a transfer of rental license from the City and discovered the whole thing has been operating illegally under all previous owners/landlords. I would like to point out that we were "scammed" in this process and could have chosen to continue on that route, but our conscience and integrity prevents such activity. It has been our sole intention to operate and manage this rental property as a legal and legitimate business observing all licensing, code, and occupancy requirements. We have been busy cleaning up the property, as many long-time residents of Elk River (including myself) know it has been an "eyesore" for the city for the past 30-40 years. It was always full of garbage including run-down cars, trailers, and boats. For the record, we are left with only 8 boats at this time and have done A LOT of garbage clean-up. In addition, we have taken over the lawn mowing/exterior maintenance and will continue responsibility for all property maintenance if this home can continue to be operated as a duplex. Our intended plan for this duplex is to rent out both units so it will be able to support the commercial loan along with the cost of repairs of an aging property, while we continue to pay our current home mortgage, and save to build our future home on the adjacent parcel. If this is not approved to use as a duplex, we will not bring in enough to be able to go through with these plans. Our long-term plan was to rent the lower unit to my parents when they can no longer live independently and to continue to rent out the top unit to another party in order to financially support the property maintenance of an 1800's home. With that said, we are asking that the interim permit be granted until the sale of the property, as we do not want to risk the possibility for City Staff or Council to change over and have the potential to not be approved for another term of the interim -use for the duplex, and then be stuck after we have already built a home. We would like to securely know what the future holds from the City if we are going to build our forever home on the adjoining property as this will also affect our choices for remodeling the duplex along with long-term family care plans. We of course plan to fix it up to code either way, but we will be selecting "upgraded" interior fixtures and choices based on my parents vs. renters, again, depending on this approval. In conclusion, we are kindly asking for the City's support, to please approve our request to grant this interim -use permit until the sale of this property so we can plan and budget accordingly, knowing that the City will continue to support our plans which include the choices we make for remodeling and our future home building plans for this property. Printed: Michelle K. DeMars Dated: 9-28-2020 ■ 1 I 4A. IP 4k WWI" Ab any* Moo - MOM bWr dk MIN NOW �Aft M �wmw � lwb- =-777�1 -,'dmkw- 05/16/2017 mi i Wi iw- m 1pppbl �s 057 1'6 2 0 1 Tm I p I - � IF I IN 0 d �W-w l7t. I fIr . r 11 jo. A iF 1 a s 1 , � -CAW a r - '�-Jog- n 0 / 1 /2017