6.4. SR 01-08-07Cmo �J
Elk --
River
City of Elk River
REQUEST FOR CITY COUNCIL ACTION ... .. . . ....................
Agenda Section Meeting Date
Planning Items January 8, 2007
Item Description
Request by Cary Santwire to consider possible changes of land
use reaul.ations for vroperty on Business Center Drive
Location
Item Number
6.4,
Prepared by
Jeremy Barnhart, Planning Klan
Reviewed by
Scott Mark, Community Development
Director
17 acres on the north side of Business Center Drive, east of the Sherburne County administrative
and judicial services building.
Attachments
Request for Action dated May S, 2006
Leger from developer dated January 3, 2007
Location Map
Action Requested
The Developer requests direction from the City Council regarding potential changes to the zoning
regulations for the subject property, currently zoned BP (Business Park).
Overview
Gary Santwire has approached the city to consider a potential development for the 17 acres. while
no plans have been developed, it appears that the developer desires to include some mix of
commercial (personal service establishments, retail., restaurants). Although it appears that some
commercial is permitted as an accessory use in the BP district, the exact amount is unspecified: At
what point does accessory commercial become a principal use, or enhance or dilute the effectiveness
of an employment center? In April of 2006, staff previously discussed the many inconsistencies
within the Business Park District and the need to review the same (see May 4, 2006 attachment).
The applicant is requesting Council support for a 60/40 land use distribution (Industrial./
commercial), allowing the applicant to prepare master development plans (possibly under a Planned
Unit Development process) with this direction, with formal application and review to occur in the
coming months. If the Council is in agreement with the land use policy concept, the following City
applications may be processed:
1. Zoning ordinance Text Amendment (Business Park)
2. Conditional Use Permit
3. PUD Process
4. Subdivision
Case Fate: 06 -03
Paae ?
R.espectfuUy submitted
7-2)
r
Jeremy Bar hart, AICP
P ann* g Manager
City Council Action Motion by Second by Vote
Follow Up
S:\PL.AN- NING\Case Hes\2407\GSanm re Staff Report 1 -5 -07 Council wor shop.doc
January 3, 2007
FROM: Gary Santwire
TO: City of Elk River
Planning Department
Scott Clark and
Jeremy Barnhardt
Dear Scott and Jeremy:
Per our phone conversations Tuesday, 1/2/07 and Wednesday, 1/3/07, this
will act as a request from our development group to attend a workshop with
the City Council on Monday afternoon/evening January 8, 2007.
The subject we would like to discuss is a possible rezoning and land use of
the 17 acre parcel located on Business Center Drive immediately adjacent to
and East of the Sherburne County jail.
RespectMy,
Gary Sa
0TY Or
Elk.
River
City of Elk River
REQUEST FOR COUNCIL ACTION
Agenda Section Meeting Date
Worksession May 8, 2006
Item Description
Discussion of Brines Proposal
Introduction
Item Number
5.5.
Prepared by
Scott Clark., Community Dev. Director
Catherine Mehelich, Director of
Economic Development
Reviewed by
The following memo discusses the "Briggs Proposal" that was addressed by the City Council on .April 14,
2006.
Discussion
The attached memo discusses the economic policy considerations, commercial and industrial inventory in
the City, and zoning issues.
Financial Impact
None
Attachments
• Staff memo date May 4, 2006
• BP Business District Use Standards
Action Re guested
See attached memorandum.
Council Action Motion by Second by Vote
Follow Up
5:`Communzty Development \Scott ClarkARCA Bricras proposal.doc
Introduction
At the April 10, 2006 City Council work session direction was given to staff to
review options regarding what was called the "Briggs Proposal." There were a number
of issues that were discussed:
1) A concern that certain types of businesses (in this case "educational venues''
such as dance, gymnastics, music, etc ) have a difficult time in finding
commercial space that have lour enough lease rates to make their businesses
profitable. There was an assumption during the discussion that converting
some industrial property to commercial was a method to create the necessary
economics in order for the aforementioned types of uses to be profitable.
2) The second discussion centered on concerns of converting scarce industrial
property into commercial space. one idea that was brought forward was
creating a "Tier 1" type of zoning where both commercial and industrial land
uses could be elected.
This report is written in two parts; the first section discusses the" economic
policy" considerations regarding the City's ability to affect lease rates to a point
of making businesses profitable and as part of this review, a look at the City's
commercial and industrial inventory. The second part discusses zoning, and if the
Council wants to create a commercial /industrial zone, the policy issues that need
to be discussed and agreed upon.
The proposed "educational venues" are currently allowed to locate within the
commercially zoned areas. The attached table indicates that there appears to be sufficient
inventory of commercial land sites and building lease space, with varying lease rates, in
which these types of uses would be allowed. At the same time there is an extremely
limited availability of land sites for light industrial /manufacturing uses.
Hartman Commercial C4
West Highway 10 Community Commercial
Guardian Angels CommercialC4
West Hwy 10 Community Commercial
Elk Path Business Center
West Highway 10
Mississippi Ridge
Bast Hwy 10
C3
Highway Commercial
PUD
Planned Unit Development
1.5 acres
$7.00/square foot
2.56 acres
Accepting offers
1.5 acre lots
$7.00/square foot
1 -3 acre lots
$8- 12.00lsquare foot
Carson Business Park C3 Hwy Comm. Acre lots
SW comer Main St 8c Hwy 169 $
Elk Ridge Center
PUD
1 -5 acres pads
North Hwy 169
Punned Unit Development
$1 2.00lsquare foot
Lease space
1,200- 30,000 square feet
Hillside Crossing Mall
C' ) Hwy Comm.
1,800 — 1 0,000
square feet
North Hwy 169
Lease space
$14- 15.001sf
Elk Park Center
PUD
3,500 -3,900 square feet
Freeport Street
Planned Unit Development
$12-14.00/sf
Country Crossing Mall
C3 Hwy Comm..
1,100 -2, 100 square
feet
West Hwy 10
Lease space
$13.001sf
Moulton Commercial
DD
3,400 square feet
Main Street
Downtown District
$9.00/square foot + CAM
Northstar Business Park
BP Business Park
4 to 9 acre lots
Twin Lakes Road
Light Industrial
approx. $2.50/square foot
Elk River Business Park
BP Business Park
1 — 6 acre and 1 — 4.46 acre
lot
Twin Lakes Road
BP Business Park
$1.90 - $2.501square foot
Industrial Lease Space
31500 -- 10,000 square feet
$4.75/square foot — warehouse
$9.50/square foot office
$1.751 square foot - CAM
Even with the lower cost of entry (land price) to locate in a Business Park/Light
Industrial zone rather than Commercial zone, it is questionable whether any "savings"
will ultimately be passed on to the end business tenant of a multi- tenant building. while
the land cost has some affect on the end lease rate, the majority of cost to lease is
attributed to the expense for tenant improvements or interior build -out in addition to
common area maintenance expenses (taxes & insurance). Even if the "savings" can be
passed on to the end tenant the City does not have the ability to control or enforce lease
rates into the future in these situations. It also seems that other commercial retail /service
businesses could seek similar requests in the future based on affordability (e.g. daycare,
hair salon, etc.).
Second, from a policy standpoint a key consideration is whether or not the City wants to
convert industrial areas to more commercial uses due to the limited availability of
industrial land.
Finally, specific to this request to locate in the Elk River Business Park, it should be
noted that allowing such use could affect the Redevelopment Agreement between the
City and Associated Investors of Elk River, Inc., Fischer Sand & Aggregate, LLP and Elk
River Business Park, LLC (the "R.edeveloper ") dated July 21, 2000 which outlines a
specific Development Schedule for the build out of specifically "light industrial building
space ".
Zoning Issues
From a zoning standpoint, the City already has a zone that allows (with some
qualifications) commercial and industrial uses. zoning ordinance Section 30-
1294 establishes a "BP business park district" with the purpose of the district
being industrial, office and commercial. (Use sections attached.. It should also be
noted that the current zoning of the City's Northstar Business Park is "BP."
Commercial uses are only allowed in the "BP" zone if the land use designation on
the City's Comprehensive Plan is Highway Business.
There are a number of issues associated with the current wording of the "BP"
district:
1) Since no current "BP" zoned property exists along a highway, and in
turn no underlying highway business land use exists on these types of
zoned properties, the City elected to remove from the district
(summer of 2005) a whole series of retail uses ( including health
athletic clubs ), both permitted and conditional.
2) Although the retail uses were eliminated no amendments were made to
the purpose statement that still references conm- iercial uses, albeit with
the proper underlying land uses.
3) Again, with the idea of eliminating retail uses, no amendments were
made to the accessory uses which still allow retail sales for a portion
of any industrial space. Under the accessory uses, there are two
separate provisions for subordinated space, one section for retail space
(allows for ten percent of the building) that is incidental to the
products being manufactured on site (Section 30-1294 (c) 4 f.) and a
separate section that allows any type of retail activity based on the
space not occupying more than 15% of the gross floor area and capped
at 5,000 sq ft. (Section 30 -1294 (c) 4 b.).
4) Another inconsistency in the "BP" zoning district is that under the
accessory use section a complementary freestanding retail facility can
be constructed up to 20,000 sq.ft. (Section 30 -1294 (c.) 4 e.). Since the
purpose section was not amended, which dictates the need for a correct
underlying zoning, it is a debatable issue as to whether this type of use
could be constructed within the definitions of the ordinance. It is also
an interesting note that this section is listed under "accessory uses" as
a freestanding retail of 20,000 sq ft, does not meet the definition of
accessory use.
5) Another interesting note for these aforementioned uses is that no
outside retail signage is allowed ( Section 30-1294 (c ) 4 d. ) which
seems counter productive since the intent is to allow some type of
retail, and in turn, there needs to be a way to convey to the public, that
a product (s) is for sale.
6} The last note is that although the "BP" district was changed to
minimize, if not eliminate commercial uses, motor vehicle repair is
allowed as a conditional use permit [Section 30-1294 (d) (1) f.).
In reviewing the "BP" district staff would conclude the following:
1) Based on the number of inconsistencies within the district a rewrite of
this section should be undertaken. The key planning policy question is
should retail uses be allowed, regardless of the underlying land use
designation. A strong argument can be made that, at a minimum,
provisions should be made to allow some complimentary retail and
service uses with an established business park. The entire concept of a
business park is that of an integrated land area where industrial and
offices employees can obtain services and other benefits as part of the
park itself.
2} The second staff conclusion is that "education uses," as described in
the introduction of this report, could be interpreted to be allowed under
the "BP" zoning district that allow retail sales activity up to 15% of the
buildings gross floor with a cap of 5,000 sq.ft. As an example, if an
industrial user had a 30,000 sq.ft. building 4,500 sq.ft. could be
allocated to retail. This interpretation of "retail sales" concludes a
broad definition of retail including retail, personnel services, food
shops, etc. as the term retail is not defined within the ordinance and
carries with it a common usage of definition that includes the
aforementioned uses.
3} As discussed in the first part of this report, the allowance of
subordinated commercial space into an industrial building may still not
achieve the desired economics.
Conclusions and Recommendations
The question of whether or not "educational venue" type of uses can afford lease
rates appears to be a market derived question that is extremely complex.. The issue of
whether or not sufficient commercial space exists in the City, and at lease rate structure
that can make a business viable, is only part of the equation. The operation of any
business including the rates charged, marketing, general operations, etc, all are
considerations that have to be matched with the operating costs attributed to lease rates.
Staff has included in the report various lease rates in the community and it
appears that there is significant space available and at ghat would be defined as the lower
end of the market levels. Staff views that the rates that would be charged for commercial
space, as part of any industrial space or on industrial zoned property, would not be
significantly lower ( and for new construction could be significantly higher ) than what
could be found in the City's commercial market. The other consideration of concern is
eliminating scarce industrially zoned property for commercial activities.
If the Council desires to pursue this issue, and views that the solution is
conversion of industrial space to commercial, it appears that this option is open in the
"Business Park" zoning as previously discussed. Staff is recornmending that the Planning
Commission review this situation regardless of the outcome of this specific item as there
appears to be many wording and intent inconsistencies.
E1 /
River
Case Number.,
Location Map "
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