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C. Supreme Court Action on Variances0 CITY OF CgANgASSEN 7700 Market Boulevard PC Box 147 Chanhassen, MN 55317 Administration Phone: 952.227.1100 Fax: 952.227.1110 Building Inspections Phone: 952.227.1180 Fax: 952.227.1190 Engineering Phone: 952.227.1160 Fax: 952.227,1170 Finance Phone: 952.227.1140 Fax: 952.227.1110 Park & Recreation Phone: 952.227.1120 Fax: 952.227.1110 Recreation Center 2310 Coulter Boulevard Phone: 952.227.1400 Fax: 952.227.1404 Planning & Natural Resources Phone: 952.227.1130 Fax: 952.227.1110 Public Works 1591 Park Road Phone: 952.227.1300 Fax: 952.227.1310 Senior Center Phone: 952.227.1125 Fax: 952.227.1110 Web Site wwadchanhassen.mn.us MEMORANDUM TO: Todd Gerhardt, City Manager FROM: Kate Aanenson, AICP, Community Development Director DATE: September 13, 2010 �K SUBJ: State Supreme Court Decision on Variances Homeowners and business owners who want to make improvements to their property that do not comply with city zoning standards will have a more difficult time doing so following a Minnesota Supreme Court decision. In late June 2010, the court handed down a ruling that greatly restricts the ability of cities to grant variances to property owners who face special circumstances. In the court case, which involved a garage addition in Minnetonka, the court stated that to establish the "undue hardship" required for a variance, the applicant must show that "the property in question cannot be put to a reasonable use" without the variance. This standard is much stricter than the previous standard. Prior to the ruling, applicants only had to show that they would like to use the property in a "reasonable manner" prohibited by the'zoning ordinance. Unless and until the legislature takes action to provide a more flexible variance standard, cities will not have the authority to grant a variance unless an applicant can show that their property cannot be put to a reasonable use without the variance. On Monday night, City Attorney Roger Knutson will discuss in greater detail the ramifications of this decision. GAPLAN \KAWAR1ANCES.DOC Chanhassen is a Community for Life - Providing for Today and Planning for Tomorrow Plmouth > News Metro cities grappling with Minnesota Supreme Court Print Page decision that limits land use discretion By Katie Mintz - Sun Newspapers Published: Wednesday, August 11, 2010 9:19 PM CDT Connie and Jeff Miller began thinking about remodeling their 1950s rambler the day they moved in nearly 20 years ago. The Edina residents finalized plans for a green rebuild this summer, but they have since learned a recent Minnesota Supreme Court decision - and a foot - means they'll have to delay construction. "I guess we're about a month too late," said Connie Miller. "We have been working since the end of last year on plan after plan trying to avoid variances and there's just no way we can do that." The June 24 opinion written by Justice Lorie Gidea states "a municipality does not have the authority to grant a variance unless the applicant can show that her property cannot be put to a reasonable use without the variance." It was based on a case that arose in Minnetonka. Tom Grundhoefer, general counsel for the League of Minnesota Cities, said the ruling makes it very difficult for projects statewide that fall outside of current building regulations to move forward without legislation or changes to city codes. State law allows cities to grant variances to property owners who want to deviate from city code when it's determined sticking to code would cause an undue hardship. Across Minnesota, variances have been used to build garages that extend into required side -yard setbacks, add an extra bedroom that violates height restrictions and any number of other expansions. The Millers were going to ask for a variance from Edina's rule specific to rebuilds and remodels that limits the new first -floor elevation to be no more than a foot taller than the existing elevation The low 7 -foot ceiling on their lower -level walkout can't accommodate exercise equipment or their lifestyle, said Miller. She said an 8 -foot ceiling would be acceptable, but they must instead use the extra foot to bring up the building foundation. A backyard pond has flooded the floor in the past causing mold and mildew problems. Minnesota Statute 462.357, subdivision 6, says undue hardship occurs when three circumstances are met - "the property in question cannot be put to a reasonable use if used under conditions allowed by the official controls, the plight of the landowner is due to circumstances unique to the property not created by the landowner, and the variance, if granted, will not alter the essential character of the locality." For more than 20 years, cities have based their decisions on an interpretation of that definition established in 1989 Minnesota Court of Appeals case Rowell v. Board of Adjustment of Moorhead. That court took undue hardship to mean the property owner "would like to use the property in a 'reasonable manner' that is prohibited by the ordinance." However, the recent decision in Krummenacher v. City of Minnetonka provides a much narrower interpretation. It maintains under the statute, in order "to establish the 'undue hardship' required for a variance, a variance applicant must establish that 'the property in question cannot be put to a reasonable use' without the variance." Attorney Roger Knutson, who advises the cities of Edina, Lakeville, Plymouth, Chanhassen, Falcon Heights and Randolph, said it would be rare for a variance request to meet that standard. "It doesn't matter what you want now," he said. "If you have a house then you have reasonable use." The case reached the Supreme Court after the district court and court of appeals upheld the city's variance approval for resident JoAnne Liebeler. She requested approval to renovate her detached garage in March 2008. The garage did not conform to a 50 -foot property setback, but it was grandfathered in since the garage was built before the setback ordinance was created. Liebeler wanted to add space for a yoga studio and craft room above the garage, along with other renovations. She needed a variance since it's a permissible nonconforming structure, according to case documents. The Minnetonka City Council approved the variance saying undue hardship was caused by the property's topography, width and the location of the driveway and existing vegetation. The City Council also said the setback was a unique circumstance, and the improvements were within the ordinance's intent and didn't alter the neighborhood's character. Neighbor Beat Krummenacher took the case to district court after the city approved the variance request. The district court upheld the city's decision, as did the appeal's court. Krummenacher's argument, among others, was that undue hardship criteria had not been met as defined by state statute. Since the garage operated as intended, and the court didn't see a lack of additional living space to cause undue hardship, the Supreme Court ruled that the city should revisit the variance under the correct legal standard. Grundhoefer said the League, which has more than 800 member cities, is considering advocating for legislation to give cities more discretion. "We could look at something similar to what the counties have," said Grundhoefer, noting policy discussions are in the early stages. "That is one thing to look at." Gidea's opinion provides that county authority to grant variances under state statute is broader than municipal authority. A county can grant variances "when there are practical difficulties or particular hardship in the way of carrying out the strict letter of any official control." Knutson said he anticipated legislation to deal with the issue statewide would be difficult to pass. Priorities for outstate legislators could be different than those in the Twin Cities metro. The Minnesota Department of Natural Resources recently sued a western Minnesota township for granting a Lakeshore variance, and he said environmentalists might be happy with the Supreme Court ruling that keeps further variances at bay. With the Minnesota Legislature recessed until January, many municipalities are looking for quicker action. While they could choose to ignore the decision and continue to grant variances - someone would have to appeal the decision for legal action - Knutson is advising his cities to apply the law as its interpreted by the Supreme Court. "[An applicant] might be thankful when you issue the permit but believe me, they will not be thankful when they are in a lawsuit," he said. There are other options. Several cities are considering rewriting zoning codes to allow some hopeful applicants to move forward without a variance. "The recent Minnesota Supreme Court decision in Krummenacher v. Minnetonka impacts requests for zoning variances because it requires us to apply the hardship standard as defined by state statutes. That standard is more restrictive than the one that the city has been following up to now," Brooklyn Park Planning Director Cindy Sherman said. "We will have to review each variance application on a case by case basis in order to determine whether the application meets the new hardship standard as defined by the Court." It will be more difficult to issue a variance because the decision limits the city's discretion and ability to apply a reasonableness standard for variances, she said. Brooklyn Park does not currently have any variance applications in process at this time. In Brooklyn Center, City Attorney Charlie LeFeveresaid he doesn't expect any substantial changes in how Brooklyn Center looks at or grants variances, since the city code is "consistent" with the state law. "Brooklyn Center, like many cities, will have to be mindful of the court's ruling when reviewing variances," he said. Interim Edina City Manager Heather Worthington said her city is taking a two- pronged approach to address both residential and commercial needs. The Edina Planning Commission was already working on new zoning language to create a planned unit development - or PUD - designation for commercial uses. The code would essentially create a unique zoning district for each project, eliminating the need for variances from other commercial zoning requirements. The creation of PUD could assist several projects in the pipeline, including a CVS Pharmacy that would need a setback variance. "We've really put that into high gear," said Worthington. "We'll definitely have something to the Planning Commission for the first meeting in September, and we'll try to move that to the City Council for approval in September or early October." Planners in her city will also review past residential variances - the city sees about 90 applications a year - in coming weeks to find similarities. If, for instance, the city has approved the majority of front yard setback variances of 2 feet or less, the council could amend the requirement to match practice. "We're looking for those commonalities and we'll try to determine if we can apply an alternate setback standard," said Worthington. In the meantime, the city is telling potential applicants to save their filing fee. The most recent meeting of the Edina Board of Zoning Appeals, which reviews variance requests, was cancelled. A handful of other muni cipalities are also looking at alternate setback standards to allow construction consistent with neighborhood attributes without a variance. On Aug. 5, the Minnetonka Planning Commission recommended an ordinance that would create an expansion permit for already nonconforming uses - like a home that violates today's standards but was built before the code existed. Recent state statute gave cities the ability to allow expansions of nonconforming uses through an ordinance process. Principal Planner Susan Thomas said the proposed ordinance would create a permit, rather than variance, available to property owners whose projects would only maintain the existing nonconformity and not exacerbate it. Thomas said more than 50 percent of variance requests received by the city in the past five years were from nonconforming properties. "What we are proposing is as far as we can go with this idea of an expansion permit and not a variance," she said. The ordinance was expected to go before Minnetonka City Council Aug. 16. The Plymouth Planning Commission also recommended a very similar provision for approval Aug. 4. Not all cities, however, are putting a halt to granting variances. The Hopkins City Council approved a variance request Aug. 2 for a screened front porch that violates the front yard setback requirement. City Planner Nancy Anderson said Hopkins has always applied the undue hardship standard as interpreted by the Supreme Court. In 2009, the city did not grant any variances. In 2008, the city granted one. "We tell people at the counter you have to have a undue hardship so we don't get a lot of applications for them," she said. "We have a history of being very strict on variances." The variance approved Aug. 2 allows a resident to build his porch 19 feet from the front yard setback - 6 feet beyond the 25 feet required. Anderson said the case has very unique circumstances. The front property line abuts right -of -way for a street the city never plans to construct. On the other side of the nonexistent street is a park. The only access to the home is from the rear. "If you have an undue hardship you should be granted a variance. That's the whole point, but cities have stretched it in the past," she said. Connie Miller of Edina spent a recent afternoon writing letters to Edina City Council members, local state representatives, the League of Minnesota Cities and other organizations asking for quick local action. "I am feeling very paralyzed right now," she said. "We will still be sitting here two years from now if we wait for it to be handled by the Legislature and Supreme Court." She said, ironically, the house they are proposing to build would be less intrusive to the neighborhood than an option that doesn't require a variance. From the street, their rambler appears to be one story, with the lower level visible from only the back. They could keep the 7 -foot ceilings on the lower level and add two stories above and still be within maximum height guidelines. "We would then have a house that was reallv out of character." she said. "We're trvinR to do the right thing." She said she worries that by the time a resolution is met, they will have missed out on low interest rates and may not be able to move forward. They have already paid a retainer fee to their builder. Another Edina builder, Scott Busyn, president of Great Neighborhood Homes, also has a client in limbo. He said the Supreme Court decision comes at a terrible time. "The market is just starting to turn around, sales and permit volume are up and this throws a whole monkey wrench in that," he said. It also impacts Iivelihoods. Each year his company builds two to four houses in Edina and southwest Minneapolis, and each site employs approximately 75 subcontractors, he said. While he is unhappy with the Supreme Court decision - "It's so draconian." - he said he is hopeful the city of Edina will take the steps necessary to mitigate project hold -ups. In Excelsior, for one developer, local changes could come too late. Excelsior City Attorney Kevin Staunton said the Excelsior Planning Commission recommended a variance request for denial Aug. 3. Applicant Charlie James sought a 20 -foot height variance to construct a 56- foot -tall Excelsior Hotel on a vacant parcel on the south shore of Lake Minnetonka. The variance request is expected to go before the City Council in early September. "You really have to got to look at the literal language," said Staunton, who is also a member of the Edina Planning Commission. "For years we've advised because the Court of Appeals had interpreted it that way, you just had to show it was the interest of the applicant to put the property to use in a reasonable manner. Now we have to have findings that support the property can't be put to use without a variance." Community Editor Paul Groessel contributed to this report. Copyright © 2010 - Sun Newspapers [x] Close Window