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05-22-2023 City Council Work Session MinutesCHANHASSEN CITY COUNCIL WORK SESSION MINUTES MAY 22, 2023 Mayor Ryan called the work session to order at 5:30 p.m. COUNCIL MEMBERS PRESENT: Mayor Ryan, Councilwoman Schubert, Councilman von Oven, and Councilman Kimber. COUNCIL MEMBERS ABSENT: Councilman McDonald. STAFF PRESENT: Laurie Hokkanen, City Manager; Matt Unmacht, Assistant City Manager; Eric Maass, Planning Director; Charlie Howley, Public Works Director/City Engineer; Jerry Ruegemer, Park & Recreation Director; Ari Lyksett, Communications Director; Amy Schmidt, City Attorney; Jack Brookshank, City Attorney; and Kim Meuwissen, City Clerk. PUBLIC PRESENT: Gary Hansen, Hansen Hometech Charlie Hansen, Hansen Hometech Darin Duch, Magney Architecture SKETCH PLAN REVIEW: SANTA VERA PUD PHASE II Planning Director Eric Maass stated that the initial proposal for the Santa Vera Planned Unit Development (PUD) site was reviewed in July 2022. The goal for tonight is for the council to review a new site plan sketch and proposed PUD amendments and provide feedback to the applicant prior to them investing in preparing and submitting a full application and plan set for initial review by the Planning Commission. This proposal includes an apartment building, townhomes, and single family homes and will require a PUD amendment which the city has broad discretion on whether or not to amend the PUD. The Planning Commission reviewed this sketch plan at their May 16, 2023 meeting. Generally speaking, the Planning Commission was supportive of the proposal. They were happy to see that the addition of a third story to the existing apartment building was removed from the initial proposal due to neighborhood concerns and that the proposed additional apartment building was a good fit on the western edge of the property away from Laredo Drive, and that there was additional buffering from the proposed additional housing units. All of the internal roadways would be private. Staff noted that the city has some upcoming road projects in the area and is likely going to need to find opportunities for stormwater retention. This submittal would provide an opportunity to coincide with these projects. Developers Gary Hansen and son Charlie Hansen of Hansen Hometech, and architect Darin Duch of Magney Architecture were introduced. Mr. Charlie Hansen provided a high-level overview of the site plan, stating that the goal is to preserve the trees as well as improve the appearance of the undeveloped portion of the site. The exterior of the existing apartment building is planned to be updated to blend in with the new buildings in the proposed project. They have been working with the Riley Purgatory Bluff Creek Watershed District to meet stormwater requirements. One of the inspirations for this project was the white Kerber farmhouse located to the north of the site, taking the house design elements and incorporating them into the new buildings in the proposed development. City Council Work Session Minutes – May 22, 2023 2 Mr. Duch reviewed the building concept designs that were inspired by the Kerber farmhouse. The backside of the existing apartment garage unit facing the street would be a darker color to provide a linear sightline. The new 32-unit apartment complex will be three stories and constructed as three separate buildings connected by “bridges”. The entrance to the existing apartment building will remain off Santa Vera Drive. A separate entrance will be built off of Laredo Drive to serve the new apartments, townhomes, and single-family homes. Mr. Maass noted that the Planning Commission liked the addition of the sidewalk to the site, which is a much-needed improvement to the neighborhood and will complete the sidewalk system in the area. Mr. Maass reiterated that the purpose of tonight’s presentation was to gather council feedback for the applicant on their proposal and the request for PUD amendments to allow the construction of the townhomes and the single-family homes in addition to the apartments. Mayor Ryan asked the council to ask questions and provide constructive feedback for the applicant. Council asked about traffic circulation within the site, confirming the reduction in the number of single- family homes, design materials, updates to the existing apartment building, traffic circulation within the site, and clarification of the desired demographic for the apartments. Gary Hansen responded that the apartment building could be designated for adults 55+ and that the design intention is to promote a humble feeling on the site. Design development will be the next step. Overall, the council liked the concept and requested that the developer use a thoughtful approach to the landscaping plan and tree preservation. Mayor Ryan thanked the developers and architect for their hard work on the project, listening to the neighbors, and revising the project. DISCUSS THC AND ADULT-USE CANNABIS LEGISLATION City Manager Laurie Hokkanen introduced attorneys Jack Brooksbank and Amy Schmidt from Campbell Knutson. Mr. Brooksbank presented an overview of the recent cannabis legislation. Both houses passed the legislation, and Governor Walz has pledged to sign the bill. He reviewed the high- level plan for the following next steps in the process: • Legalizing private individual purchase, possession, use, and limited growing (8 plants per residence) starting August 1, 2023 • Commercial growth, processing, and sales under the regulation of the new State Office of Cannabis Management (OCM) starting as early as January 1, 2024 • Expungement of convictions under previous laws to be handled through the Bureau of Criminal Apprehension (BCA). The OCM will be a state administrative agency to be created on July 1, 2023. The OCM will conduct studies and provide reports, regulate the cannabis industry, and take over the medical cannabis program starting in 2025. Permitted and restricted uses were reviewed, as well as commercial/retail regulations. Commercial operations could begin on January 1, 2024, but every indication states it will take longer. Licensing will be issued by the state, and cities will be preempted from becoming involved in allowing businesses within the city; however, cities will be able to restrict retail locations to specific zoning areas, specific regulations exempted from preemptions, and enforcement and compliance. City Council Work Session Minutes – May 22, 2023 3 Cultivation licensing, size limits, and rules were reviewed. Retail sales will be subject to state licensing and regulation. There will be restrictions on the size and number of retail locations as well as restrictions on concurrent licenses held. Retailers will also be subject to compliance requirements. The state will issue licenses based on demonstrated compliance with regulations and equity score, including consideration of the applicant, proposed location, and market conditions. Current products will remain legal without change until January 1, 2024, when they will also be governed by state licensing. The state will issue licenses; cities are generally preempted; they may not ban use, possession, or transportation and may not prohibit businesses from operating if licensed by the state. Cities may adopt ordinances adopting reasonable restrictions on the time, place, and manner of the operation of a cannabis business and incorporate setbacks from schools, daycares, residential treatment facilities, or attractions within a public park that is regularly used by minors, like a playground. The city will be involved in the state licensing process by certifying that the proposed business complies with zoning, fire code, and building code. The city may provide any additional information it believes is relevant to the application, such as concerns about location or specific to the applicant. Cities will be required to issue registrations if all license requirements are met, and the city may impose registration fees for the initial registration. Registration renewal may also limit the number of full-strength registrations available, i.e., not fewer than one license per 12,500 residents. The city may decline registration if there is one active registration per 12,500 residents county-wide. Cities are responsible for conducting compliance checks for age verification and operation requirements. Compliance checks must occur at least once a year for each permit holder. The OCM will set up a complaint process to report license violations and must give cities an expedited process. Penalties include registration suspension if the city determines that a business is in violation of its state license or if the business is an immediate threat to the health or safety of the public; however, the city has limited suspension power. Mr. Brooksbank reviewed how this legislation will be financed, including $70 million in state appropriations for initial funding and long-term funding from a 10% sales tax. Of the 10% sales tax collected, 80% will go to general revenue, and 20% will be dedicated to a local government aid account (50% to counties and 50% to cities). Distribution will be based on the share of total cannabis businesses located in each city. The OCM will be charged with compiling informational reports and setting initial regulations, as well as drafting model ordinances for cities. State aid will be provided for local law enforcement, including training for compliance enforcement, financial aid for local law enforcement training, and state support for enforcement activities. The city may issue a new moratorium on cannabis businesses lasting until January 1, 2025. Suggested next steps for the city are to start thinking about zoning, review general regulations, business regulations, state model ordinances, police, internal policy, and use regulations. City Council Work Session Minutes – May 22, 2023 4 FUTURE WORK SESSION SCHEDULE June 5, 2023 (meeting moved from June 12) • Chanhassen Bluffs Sports Complex Update June 26, 2023 • 2024 Preliminary Budget and Levy Discussion • City Council Roundtable July 10, 2023 • Presentation of Audit Results, Redpath • Organizational Study/Staffing Study Presentation, Raftelis The work session adjourned at 6:55 p.m. Submitted by Laurie Hokkanen City Manager Prepared by Kim Meuwissen City Clerk City Council Work Session Minutes – May 22, 2023 5