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10.2. SR 06-07-2021it ci Elk* River Request for Action To Item Number Mayor and City Council 10.2 Agenda Section Meeting Date Prepared by Work Session June 7, 2021 Zack Carlton, Planning Manager Item Description Reviewed by Concept Review: MMPA Zoning and Land Use Cal Portner City Administrator Amendment Reviewed by Action Requested Review the proposed project and provide the applicant with informal, non -binding, feedback. Background/Discussion The applicant, Minnesota Municipal Power Agency (MMPA), owns approximately 300 acres of property along the northern edge of the city. They also own another adjacent 85 acres over the city limits in Livonia Township. MMPA is looking at development opportunities for this parcel and has proposed a rezoning and land use amendment to allow industrial development. The proposal rezones the property to I-3 (General Industrial), which allows a range of industrial uses that do not require city services. As this property is well outside the urban service area, the uses are limited to those that do not require sewer/water, and the I-3 district reflects those limitations. The target industries include energy intensive and high -paying manufacturing and technology -oriented uses — data centers are of primary focus. The applicant's narrative describes characteristics of data centers and their fit within the community. Comprehensive Plan The Comprehensive Plan guides this property for mining/development reserve and rural residential uses, which matches the zoning and adjacent land uses. The applicant also references multiple locations within the Comprehensive Plan that support their desired development as an industrial/job creator. Considerations While the use does meet some of the goals of the Comprehensive Plan, the City Council should consider the following: The Elk River Vision A welcoming 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 1. The I-3 zoning district does not currently allow data centers, but the district does allow a variety of intense industrial uses (see attached ordinance) and should the property be rezoned; those uses would be allowed by right (permitted or conditional). 2. To allow data centers, the use would need to be added through an ordinance amendment process. The applicant also notes the possibility of an overlay district that could be used to limit the uses on the site. Such an overlay does not exist now but could be created as part of a formal application. 3. Industrial uses may not be compatible with the existing residential users to the east — large lot residential and agricultural uses, or the city's long term growth plans for the area, which also include urban residential uses. While the city does have numerous locations where industrial uses are near residential areas, those have been in place for some time and are not being introduced. 4. Traffic from industrial uses typically includes larger and more frequent vehicle trips (manufacturing and warehousing). The adjacent city street is designed to handle larger trucks as two gravel mines are immediately adjacent the subject parcel, and there are acceleration and deceleration lanes on Highway 169. The City Council should consider the full impacts, both positive and negative, in reviewing the proposed concept application. Financial Impact None Mission/Policy/Goal ■ Support the growth and development of the city. ■ Address changing needs within the community. ■ Provide industrial and job creating opportunities. Attachments ■ Location Map ■ Applicant's Narrative ■ I-3 Zoning Ordinance � 6r 1{}3 2'1-05 75-103 -1101 r rt? 75 -10 3 =13 00 J�T 75-103-3100 V , ��5t1ti•1��+.�rt�ie Ncar:�tr4v�::#� a -; �, � • _yam - r.-+;-e-;� , � _, k AA �t � �f75k1�J;��1�01 �} .,� d et N-Linesot.a ?\.2hu-llclj--),,,-d Powei: Agelic.AT olicep t. Review Case No: CR21-03 El, - River t4MW1t WnneWa MiArn 6pal Power Agency MMPA Project Narrative Concept Review - Project Narrative Minnesota Municipal Power Agency Parcels 75-102-2000, 75- 102-3201, 75-103-1105, and 75-103-1400 Action Requested: Review the proposed project and provide the applicant with informal/non-binding feedback. Project Background: Proposed zone change to allow development opportunities that align with the Minnesota Municipal Power Agency's goal to support economic development in member communities. Minnesota Municipal Power Agency (MMPA) The Minnesota Municipal Power Agency (MMPA) is a Joint Action Agency with twelve member communities including the City of Elk River. MMPA is the wholesale power supplier to its member communities including the City of Elk River. We have developed rate structures and acquired land and land rights in our member communities to support our economic development objectives. MMPA supports economic development in our member communities. As a result, we have relationships with economic development staff and city management. A representative of each community sits on MMPA's Board and understands the Agency's desire to promote economic development for our members. MMPA proposes to develop 386 acres on the north side of the City of Elk River to allow development of general industrial uses including datacenters. 301 acres of the site is within the City limits of Elk River. The remaining 85 acres abuts the northern City limits in Livonia Township. MMPA's development concept seeks to offer ahigh tech industrial development environment targeting uses consistent with technology -oriented and high -paying employment in support of Elk River'sjob creation goals. Proposed Project: MMPA proposes a zoning change to allow General Industrial (1-3) uses that will be a benefit to the city. Current zoning for the parcels is R1 a — Single Family Residential and CRT - Commercial Reserve Transition and does not provide the needed flexibility for long-term economic development that MMPA envisions. As described within this project narrative, the 1-3 - General Industrial zoning allows a range of uses that align with the MMPA's goals and respond to the goals and policy direction outlined within the Comprehensive Plan. Page 1 of 7 MMPA WnneWa MiArn 6pal Power Agency MMPA Project Narrative Project Location: The subject property includes four parcels totaling 300.75 acres located in the northeast corner of Section 2, Township 133 N, Range 26 W, and the northwest corner of Section 3, Township 133 N, Range 26 W. The parcels are currently vacant, each including a combination of wooded vegetation, open fields, wetlands, and vacant outbuildings. The western half of the subject property is currently zoned CRT - Commercial Reserve Transition and the eastern half of the subject property is zoned R1 a — Single Family Residential. Development Reserve and Residential are identified as future land uses for the subject property according to February 20, 2015 Land Use Map. Future land use guidance will be updated as part of the Comprehensive Plan Update. Adjacent uses vary from large lot residential and open space to mining operations to the southwest. Additionally, the existing landfill and identified expansion area is located to the west of US 169. The location of the subject property is an ideal location for the proposed use for a number of reasons. Regionally, the City of Elk River is well positioned with major transportation connections via US Highway 169 and US Highway 10. Additionally, the relationship to surrounding economic hubs provides proximity for customer base and further economic growth. Locally, the subject property is well suited in relationship to the surrounding land uses. Higher intensity uses to the west include the landfill and mining operations, and the proposed use provides a lower intensity transition to the east. Additionally, the use increases the use of US Highway 169 as a commercial corridor. Project Narrative: Description/scope of proposed project MMPA supports the City of Elk River in implementing its Strategic Vision to promote and encourage the expansion of jobs and business growth within the city. The 1-3 - General Industrial district is intended to provide shovel ready sites for energy intensive uses and to promote the addition of high -paying manufacturing and technology -oriented employment. The 1-3 - General Industrial district will targetjob creation, improved tax base, and efficient development costs. The proposed project will be structured to encourage intensive, efficient, environmentally responsible use of land and create strong business environments in the Elk River community. Page 2 of 7 t4MWIt i1�n^ ota Municipal Flower Ane — MMPA Project Narrative MMPA owns and develops land for the benefit of its member communities, including Elk River. The Minnesota Municipal Power Agency (MMPA) owns 386 acres of land it proposes to develop. 301 acres of which is within the City limits of Elk River. The remaining 85 acres abutting the northern City limits in Livonia Township. Current zoning for the parcels is Residential (R1-a) and Commercial Reserve Transition (CRT) and does not support the long-term economic development that MMPA envisions. 1-3 Permitted Uses: Section 30-1294.b of the Zoning Ordinance identifies the permitted uses of the 1-3 General Industrial district. The permitted uses include specific uses such as business offices and research and development. Conditional uses include a broader range of uses from heavy manufacturing to foundry, casting, or forging metals. At this time, some of the high-tech industries that are desirable are not allowed as a permitted or conditional use (e.g., Datacenters). A text amendment may be required to achieve the desired use. Aside from the alignment with the overall purpose of the 1-3 district, it is also desirable as uses are not required to connect to city water or sanitary services. Proposed Use Description: As stated, this proposed project is intended to support the MMPA's goal of supporting economic development for its member communities. Though no specific developments are currently identified for the subject property, the MMPA is pursing a zone change to create shovel ready sites that would increase energy use within the MMPA system, while also bringing new jobs to the community and serving as a catalyst for future economic development. The MMPA would like to purse a zone change to 1-3 — General Industrial for the subject property to allow for the development of high tech industries (e.g., advanced manufacturing and datacenters). MMPA recognizes that a change to 1-3 permits a range of industrial uses, but these uses may not meet the primary development goals of supporting economic growth and increasing power usage. Though specific development details for high tech industries are unknown at this time, the following table outlines the development details requested per the Concept Review Application for datacenter developments as an example. For reference, four datacenters located in the Twin Cities metro have been highlighted in Attachment A. These examples provide a reference for the aesthetics and building materials generally found in the datacenter industry. Page 3 of 7 MMPA)k WnneWa MiArn 6pal Power Agency MMPA Project Narrative The hours of operation for technology oriented, high energy using industries will range from a standard business day to 24- Hours of hour operations. For example, datacenters generally operate Operation 24/7 and have staff onsite at all times. During all hours of operation, there are no specific emissions or nuisances (noise, smell, etc.) emitted from the use. The number of employees may vary by development type. For Number of the example of a datacenter, the number of onsite employees Employees will generally peak during normal business hours, with a reduced number of employees onsite during the overnight shift. Number of There are currently no parking stalls on site, and all parking and parking stalls, loading bays would be constructed with the proposed existing, and development. Parking and loading areas would be constructed additional to meet the City's parking requirements. Any screening or security fencing will be determined with the specific facility use. Datacenters and many high tech industries Proposed typiGally do not include outdoor storage that would warrant Screening any screening. Onsite backup generators are a common element of datacenter developments which are typically screened from view using similar exterior building materials. Building materials for datacenter developments include high quality materials and design. Specific materials would be determined with the specific project, but building materials Building may include brick, stucco, concrete, steel, and glass. In Materials particular, the datacenter industry is considerate of sustainability throughout many elements of the practice, including the use of sustainable building materials throughout the development process. Signage Monument signs, if any, would comply with city requirements. Anticipated signage may be limited to the building fagade. Outdoor No outdoor storage is anticipated with datacenter or high tech Storage industry development. Outdoor storage for other industrial uses would comply with city requirements. Page 4 of 7 t4MW1t i1�n^ ota Municipal Flower Ane — MMPA Project Narrative Consistency with the City of Elk River Comprehensive Plan: The proposed development is consistent with the City of Elk River's comprehensive planning objectives in a number of ways. Consistencies with both the current 2014 Comprehensive Plan and 2020 Comprehensive Plan Update Existing Conditions Memorandum are identified in the able below. Comprehensive Plan Policy Consistency with Proposed Project Encourage Industrial Historically, Elk River has enjoyed a diverse and strong Development industrial base. This base thrives with a regionally recognized labor force and business friendly posture. (pg. 40, 2014 nsi Compreheve Plan; pg. 21 & pg. Comprehensive Opportunity and Desire to Expand Industrial Uses in the 20 Existing Conditions City. Memorandum) There is a desire to increase land available forjob growth, primarily light industrial uses, and business parks. However, there is currently limited large lot industrial sites available in the Citv. makina it essential for the Comprehensive Plan to identify appropriate opportunities, while also identifvina market constraints to this arowth. The proposed project provides an opportunity to expand industrial uses, while also serving as a catalyst for future development potential. Key Takeaways from the 2020 Existing Conditions Memorandum Trends in the industrial market indicate a demand for additional space set aside for continued growth in this sector: Elk River has seen consistently affordable rents over the years in the industrial sector making it an attractive community for businesses looking for space in the Minneapolis/St. Paul Region. However, there is limited available space for additional industries to move in and the County has lower vacancy than the Twin Cities Regional Market. There is ooportunity to stav comaetitive in the reaion b increasina available industrial land lesoecially larae lots). In addition, Elk River is also at the crossroads of US Highway 10 and US Highway 169 making it well -positioned to attract major industries looking for access to the region. Page 5 of 7 t4MWIt i1�n^ ota Municipal FIO er Ane — Comprehensive Plan Policy MMPA Project Narrative Consistency with Proposed Project MMPA's development concept is supportive of the City's needs. The development concept addresses this market demand for large lot sites suitable for targeted industrial growth and enhance the City's competitiveness in the region. MMPA's development concept seeks to attract high -value, environmentally conscious industrial use that limits the potential for adverse impacts on adjacent land uses. Preserve and maintain the As Energy City, Elk River seeks to promote sustainable environment and energy efficient forms of development. (pg. 7, 2014 Comprehensive MMPA is committed to providing its members with clean, Plan) renewable energy. The Agency's portfolio of renewable resources supports meeting the Minnesota Renewable Energy Standard (RES) and customer demand for renewable energy. The proposed project includes planning for potential significant solar energy resources and is supportive of MMPA's clean energy commitment. MMPA seeks to preserve and protect wetland areas MMPA seeks to create and maintain a naturally vegetated buffer sufficient to preserve the value and function of regionally -significant wetlands on and abutting the proposed project site. Complement existing uses, The subject parcel is currently zoned as combination of protect the natural Residential (R1-a) and Commercial Reserve Transition (CRT). environment, and respect The parcel is located proximate to the City's landfill and to surrounding active mining operations. Both of which are expected to neighborhoods. continue operations for the foreseeable future. (pg. 43, 2014 Comprehensive The proposed development seeks to change the current Plan) zoning classifications. MMPA intends for the proposed development to be a community asset of greater value for Elk River than would otherwise be derived from the zoning identified in the City's current Land Use Plan. Page 6 of 7 t4MW1t i1�n^ ota Municipal Flower Ane — MMPA Project Narrative Comprehensive Plan Policy Consistency with Proposed Project Expanding the Tax Base - The current Comprehensive Plan identifies expanding the Support the City's goal of tax base and attracting jobs as key aspects of Elk River's job creation future require particular attention and action by the City. (pg. 123-126, 2014 MMPA's concept seeks to encourage intensive and efficient Comprehensive Plan) use of land for industrial development resulting in correspondingly higher tax capacity value and market value stability. High quality jobs, Retaining jobs in the community MMPA's development concept seeks to offer a large -site Industrial environment targeting uses consistent with technology -oriented and high -paying employment. Planning Tools and Opportunities: The project narrative describes the proposed development direction for the subject parcels. It is understood that future applications may come before the City of Elk River to pursue needed zone change, land use plan amendments, etc. as development is pursued. Based on the discussion of the concept review with the Planning Commission and City Council, the direction for these applications will be determined. This will include the determination of the proper zoning district, land uses, and other available tools. For example, tools that may be developed to manage development for the specific growth area. An overlay is a tool that could be explored for the US 169 corridor or the northern business park. This tool could be used to regulate and manage the uses and development regulations within a defined area. Following discussions with the Planning Commission at the May 2St" Hearing, the following tools or development options were discussed: Text amendment to the 1-3 District to allow high tech industries. Overall district that would provide additional regulations for the surrounding areas Development of a new zoning district that could be used to regulate uses and development standards for the subject property and surrounding uses as warranted. Page 7 of 7 Existing Datacenters in the Twin Cities Metro Stream - Chaska Address: 1708 West Creek Lane, Chaska, Minnesota Website: https://www.streamdatacenters.com/datacenters/minneapolis-i/?gclid=CjOKCQjwvYSEBhDjARIsA- JMn0liOa_IPs1fsOmFTOgPcBBnfSCPWaTgdfMJFuLla93oTnWc1 Ekvi_LkaArQoEALw_wcB&gclsrc=aw.ds F I <' T. r j Ir. Flexential - Chaska Address: 3500 Lyman Blvd, Chaska, Minnesota Website: https://www.flexential.com/data-centers/mn/minneapolis/chaska-data-center Existing Datacenters in the Twin Cities Metro DataBank MSP2 - Eagan Address: 3255 Neil Armstrong Blvd, Eagan, Minnesota Website: https://www.databank.com/data-centers/minneapolis/msp2/ a - a • �` ��a°Cbllllhi� fIIEr�� h � One Neck - Eden Prairie Address: 10290 W 70th Street, Eden Prairie, Minnesota Website: https://www.oneneck.com/datacenter-colocation/minneapolis \ o` z , I 7103 ft Orrock Livonia ' tr ' Township C Township I E69 SubjectProperty r� C Q h � � 7 997 ft � Big Lake Township Woodland Trails Park 1091 ft 169 Ci t'y iQf Bailey Nowthen C a 10 10 � City of o 0 -\ x Elk River v C, 95th St NE Otsego 10 w Z � w > y Z a ? Q Autumn_ Heights Park`` J a 80th St NE s Y v E 0 70th St NE 70th St NE Albertville 60th St NE \� \ o _ \ Rive Fox Hollow Golf — Club,/ r Road 0 2.5 5 7.5 im Miles N PROPERTY LOCATION MMPA Concept Review W -1-1 a Subjecrt Property 30-035-340.QM ,10 Livonia Township I Y a City of EIk River _ F- i r- 75-103 • _ r - 1105 cx•` ¢ y 75-103-1400 Sr R / 0.25 SUBJECT PROPERTY MMPA Concept Review 37 IWO 75-102-2000 75-102-3201 0.5 1 Wiles Nf� A- I lk River ■ Conceptual Development Area Conceptual Development Area - Livonia Township ■ Wetland Areas Conceptual Site Access 7 XI Livonia Township I City of Elk River 0 0.25 Subj Approximately 49 Acres ,M App oximately 86 Acres 0.5 Approximately 110 Acres CONCEPTUAL DEVELOPMENT SITING MMPA Concept Review 1 i Miles N+� Sec. 30-1294. - 1-3 general industrial district. (a) Purpose. The 1-3 district shall serve as a general industrial zone to provide area for industrial development not requiring municipal water and sewer. This district is appropriate for manufacturing, warehousing, and similar industrial uses because of access to warehousing. These areas are intended to encourage the development of industrial uses which are clean, quiet, and free of hazardous or objectionable elements such as noise, odor, dust, smoke, glare, or other pollutants. These industries shall be compatible with each other and with surrounding land uses. (b) Permitted uses. Permitted uses in the 1-3 district are as follows (1) Bottling and distribution. (2) Business offices. (3) Manufacturing, light. (4) Motor vehicle repair shops. (5) Research and development facilities. (6) Warehouse spaces. (7) Wholesale businesses. (c) Accessory uses. Accessory uses in the 1-3 district are as follows: (1) Parking lots. (2) Retail sales, provided: a. The retail sales activity is not located in an administrative office facility, but is located within a business, the principal use of which is not commercial sales. b. The retail sales activity does not occupy more than 15 percent of the gross floor area of the occupied quarters. c. The retail sales activity is accessory to the principal use. d. No sign identifying the retail sales is visible from the outside of the building. (3) Signs (as permitted in section 30-851 et seq.). (4) Structures, accessory. (d) Conditional uses. Conditional uses in the 1-3 district are as follows: (1) Animal and poultry processing. (2) Bus, motor vehicle, and implement storage, maintenance and repair. (3) Chemical storage/bulk storage of fuel, e.g., petroleum. (4) Concrete/asphalt products and processing. (5) Commercial recreational facilities. (6) Foundry, casting, or forging metals. (7) Government facilities. (8) Grain and feed elevators and mills. (9) Kennel, commercial. (10) Landscaping contractor yards. (11) Manufacturing, heavy. (12) Meat or fish packing. (13) Ministorage. (14) Outdoor storage (accessory to principal use). (15) Railyards. (16) Recycling processing centers. (17) Salvage yards. (18) Sexually -oriented land uses. (19) Single-family residential dwelling units accessory to principal uses, provided that: a. The nature of the principal use of the property makes it necessary or highly desirable from both the property owner's and the city's perspective to have a 24-hour-a-day caretaker or security person reside on the property. b. The proposed dwelling unit is designed for and will be used exclusively by caretakers or security personnel responsible for the security of the property and the principal use thereof. c. The proposed dwelling unit will be occupied by no more than two persons, neither of whom may be under 18 years of age. d. There shall be only one dwelling unit per lot or, if one principal use is located on several adjoining lots, per principal use. e. The proposed dwelling unit will not exceed 800 square feet in size and will be located within a building serving the principal use of the property which is no less than 10,000 square feet in size. f. The principal use of the property is not of such a nature that it would be dangerous or hazardous to residents of the proposed dwelling unit. g. The proposed dwelling unit meets all other requirements of this Code and the Minnesota Uniform Building Code for occupancy as a dwelling unit by a single family. The city council may, if it finds it necessary to do so for the protection of the health, safety and welfare of persons who may occupy the proposed dwelling unit, impose additional reasonable requirements or conditions on the construction and use of the dwelling unit. h. The conditional use allowing such a dwelling unit in an industrial zone is deemed to be unique to the principal use of the property and the ownership of the property and the principal use. Any conditional use permits granted under this section shall therefore automatically expire if the principal use of the property changes or the ownership of either the property or the principal use of the property changes. (20) Truck terminals. (e) Architectural standards. No provision of section 30-938 except subsection 30-938(2) pertaining to building finish and subsection 30-938(3) pertaining to roofs applies to this district. (Ord. No. 10-12, § 3, 8-2-2010; Ord. No. 12-11, § 8, 7-16-2012; Ord. No. 18-03, § 8, 3-19-2018) Editor's note— Ord. No. 18-03, § 8, adopted March 19, 2018, renumbered § 30-1295 as § 30- 1294. Minnesota Municipal Power AgencyConcept Review Background Redefine 169 impacts?Truck entrance/exits to 169Abuts existing gravel minesGuided for CRT and Rural ResidentialData Center3 District-IIndustrial uses Potential land use change and rezoning Considerations Possible 169 Redefine concerns Traffic, fumes, noise, aesthetics, etc.Compatibility with nearby propertiesDifferent zoning (new district?)Limit with overlay (new ordinance)by right (permitted and conditional)3 district allows a variety of potential undesirable uses allowed -I Action Requested guide a possible future application. binding, feedback to -Provide the applicant with informal, non 1 May 25, 2021Elk River, MinnesotaConcept Review 2 in our member communities.Supports economic development Elk River. member communities including Wholesale power supplier to its the City of Elk River. member communities including Joint Action Agency with twelve Who is MMPA? 3 and MMPA Industrial uses that will benefit the City of Elk River MMPA proposes a zoning change to allow General •Economic DevelopmentSupports MMPA its member communities, including Elk River.MMPA owns and develops land for the benefit of •City of Elk River.MMPA owns 386 acres on the north side of the • 4 development drivercommunity asset and economic to be a MMPA intends for the proposed development •envisions for the site. MMPA term economic development the longCurrent zoning does not support •development ready site.MMPA desires a zone change to create a PurposeConcept Review 5 economic growth.industrial use to position Elk River for continued value, environmentally conscious -Attract highGenerate new business, jobs, and investment.•paying employment.-oriented, high-Target uses consistent with technology•impacts on adjacent land uses. Development concept that limits adverse •Proposed Development Concept 6 No city water/sewer required•Limited traffic generator•Drive economic development•Data Centers•tech Industries-High•Target Industries 7 LocationSubject Property Township.acres is in Livonia The remaining 85 limits of Elk River. is within the City 301 acres of the site 8 District.Transition (CRT) Commercial Reserve mining operations, and City’s landfill, active Parcel located near the ContextSubject Property 9 Subject Property 10 Conceptual Site Plan 11 Residential•Reserve/MiningDevelopment •2015 Land Use Land Use Alignment 12 Topography and Wetlands•EnvironmentalOnsite well and septic•Extension of power utilities•UtilitiesTraffic generation varies by use•Exiting turn lanes on US 169•Proposed access from Baldwin Street •Transportation Site Considerations 13 region.Enhances the City’s competitiveness in the •the City’s Comprehensive Plan. MMPA’s development concept is supportive of sites suitable for targeted industrial growth. lot -Addresses market demand for large•Supports Elk Rivers’ Strategic Vision 14 development in our member communities. MMPA actively supports economic •with clean, renewable energy.MMPA is committed to providing its members •development. sustainable and energy efficient forms of MMPA supports the City’s goal to promote Supports Elk Rivers’ Strategic Vision 15 Appropriate Land Use•New Zoning District•Overlay District•Additional Zoning Tools•uses (I3, PUD, I2)Appropriate Zoning Districts and/or allowed •Guidance-Concept Review 16