01-27-2025 CC WS1
CHANHASSEN CITY COUNCIL
WORK SESSION
MINUTES
January 27, 2025
Mayor Ryan called the work session to order at 5:30 p.m.
COUNCIL MEMBERS PRESENT: Mayor Ryan, Councilmember von Oven, Councilmember
Kimber, and Councilmember McDonald
COUNCIL MEMBERS ABSENT: Councilmember Schubert
STAFF PRESENT: Laurie Hokkanen, City Manager, Charlie Howley, Public Works
Director/City Engineer; Matt Unmacht, Assistant City Manager, Jerry Ruegemer, Parks Director;
Kelly Grinnell, Finance Director; Patrick Gavin, Communications Manager; Eric Maass,
Community Development Director; Jenny Potter, City Clerk
PUBLIC PRESENT:
Civic Campus: Playground Equipment and Pour In Place (PIP) Surface Colors Selection
Jerry Ruegemer, Parks Director introduced Bailey Wolf of Flagship Recreation, to present an
interactive model of the playground and splash fountain amenities that will be included during
Phase II of the Civic Campus project. Flagship is a design-build company that is the supplier of
playground equipment for the Civic Campus. Phase 1 of the Chanhassen Civic Campus
construction involves building a new City Hall and Senior Center, along with supporting parking,
streetscape, and plaza improvements, while allowing the current City Hall to remain operational
during construction. Phase 2 includes the demolition of the existing City Hall and the creation of
a flagship park space for downtown Chanhassen, featuring amenities such as a park pavilion,
pickleball courts and a performance stage. The playground and “pour in place” (PIP) surface will
be installed in Spring 2026. (Pour in Place is a durable and customizable surfacing material made
from rubber and a binding agent, commonly used in playgrounds and recreational areas to provide
a safe, shock-absorbent, and low-maintenance surface that meets ADA standards.) Ms. Wolf
provided Council with an in depth look at a proposed color palette for the playground, referred to
in her remarks as “Option #3,” since it was during a September 23, 2024 City Council meeting
that the council was presented with 5 options. Some of the colors included in Option #3 are acorn,
leaf, limon and dune.
A few councilmembers expressed a preference for a color called “lagoon” and, at the conclusion
of the discussion, the council expressed a preference for the following color scheme: lagoon, acorn,
leaf and dune colors, with a grey/black (50/50 mix) colored Pour in Place and a maple leaf of a to-
be-determined accent color.
Carver County Housing Study Presentation
Allison Streich, executive director of the Carver County Community Development Agency
(CDA), and Joe Hollman from Maxfield Research and Consulting presented the findings of the
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Comprehensive Housing Study they recently completed on behalf of Carver County. The study
and analysis provide recommendations on the amount and types of housing that may be developed
to meet the needs of current and future households residing in the County.
Some notable findings from their study:
• Chanhassen’s population is projected to grow just under 2% per year from 2020 to 2040.
• The median household income in Chanhassen is $124,829, which is 18% higher than the
county average and 39% higher than the metro area average.
• Unemployment dropped in Chanhassen from 6.1% in 2010 to 2.2% in 2023.
• 94% of jobs in Chanhassen are filled by workers commuting into the city and 23% of the
people commuting into the city are driving 25 miles or more.
• Chanhassen averages 136 new housing units/year (49% detached single-family, 23%
townhomes, 27% multifamily).
• The average cost to construct a new single family home in Chanhassen is currently
$851,033.
• There will be a demand for 6,829 housing units in Chanhassen from 2023-2040.
• Currently Chanhassen has 0.9 years of platted lots available for construction where
typically a 3-year supply is seen as equilibrium. This is anticipated to drive interest in
new development in the community.
Overall, the analysis suggested that while Chanhassen has a relatively affluent population and high
homeownership rates, housing affordability is a concern for both first-time homebuyers and
renters, particularly for moderate-income households.
Mr. Hollman told Council said that, throughout Carver County, the primary need is for housing
that is targeted towards moderate-income households. And, in Chanhassen, Mr. Hollman said
housing demand will eventually outstrip the available land and therefore recommended finding
ways to allow for greater housing density (townhomes, twin homes, etc.).
Local Affordable Housing Aid (LAHA) Funding Discussion
Eric Maass, Community Development Director delivered a presentation on Local Affordable
Housing Aid (LAHA), a sales tax in Minnesota that funds affordable housing projects. The
Minnesota Legislature passed the LAHA sales tax in 2023. The tax is 0.25% and applies to retail
sales in seven counties: Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. The
amount of aid each county receives is based on a formula that considers the percentage of
households considered to be cost-burdened (a “cost-burdened household” is one in which the gross
rent is 30 percent or more of household income or in which homeownership costs are 30 percent
or more of household income).
For 2024, the City of Chanhassen has been certified to receive $126,855.46 in funding to support
affordable housing within the city. Mr. Maass provided the city with a few options on how to use
the funding. Some of the ideas presented by Mr. Maass were:
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• Establish a City of Chanhassen Local Housing Trust Fund (serve as a 3-year backstop)
• Identify a housing development project with affordability component that could utilize
the dollars
• Explore the ability to use all or a portion of LAHA funds to provide low or no interest
loans to qualifying households to offset road project assessments to assist in maintaining
Naturally Occurring Affordable Housing (NOAH) housing stock
In addition to those ideas, both Mr. Maass and members of the council suggested considering
partnering with neighboring towns in order to pool funds for Carver County programs designed to
support affordable housing projects, with the idea being that greater needs could be addressed and
broader impact achieved through the cities working together and collaborating regionally. As a
result, Streich rejoined the conversation and shared several county programs either currently
operating or under consideration that would fit the description required for LAHA funds.
Many councilmembers agreed that this approach might make the most sense as long as Chanhassen
residents would be among the beneficiaries and asked Ms. Streich and city staff to revisit this
conversation during future Council sessions in order to solidify the city’s plan for using the LAHA
funds.
Accessory Dwelling Units (ADUs) Discussion
Eric Maass, Community Development Director led a discussion on Accessory Dwelling Units
(ADUs). Different types of ADUs include:
• Detached ADU: A separate structure, like a guest house or small cottage, built on the
property.
• Attached ADU: A unit that is connected to the main house but has its own entrance and
living facilities.
• Internal ADU: A converted space within the primary residence, such as a basement or
attic.
ADUs were adopted into ordinance in 1986, and the city has received 10 applications for ADUs
since adopting this ordinance, with four applications since 2021. All ADU applications have
been approved. Currently, the city's ordinance requires the application and approval of a variance
in order to permit a single-family dwelling to be utilized as a two-family dwelling or "ADU".
The use of a variance process for ADUs does not have a strong legal basis. While the city has not
been challenged to date, it makes sense to consider other approaches. Based on the consistent
support that the Planning Commission has historically shown applications for ADUs, the city
could consider amending its city code to allow for ADUs to be reviewed solely through an
administrative approval process. This would save property owners from having to invest the
added time and money in making a formal variance application and going before the Planning
Commission for review.
The Planning Commission held a lengthy discussion regarding ADUs at their July 2, 2024 work
session and, during that meeting, it was interested in the following policies for regulation of
ADUs:
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• Update the city's definition of an ADU
• Internal to the home and attached ADUs should not require a variance or conditional use
permit process but rather be permitted through the building permit process as a home
improvement.
• One ADU should be allowed per property.
• ADUs over a detached garage should also be allowed and permitted through the building
permit process.
• Rental Policy - ADUs may be rented as either a short - or long term rental but only if the
other dwelling unit on the property is owner occupied.
• Maintain a single utility service and single roadway access.
• Design standards - ADUs should complement the main principal structure.
• Lot Cover - total lot cover would continue to be restricted by the base zoning district.
• Any property zoned for residential use is eligible for a detached or attached ADU.
• ADUs may not be sold independently from the principal dwelling.
• Additional parking is not required for an ADU.
• ADUs shall abide by Minnesota State building code regulations.
Mr. Maass laid out several possible actions that the council could take:
• No ordinance revisions. Retain the requirement to receive variance approval in order to
construct an ADU on a single-family property
• Amend the City Code to allow for ADUs on a single-family property through an
administrative review process
• Revise from a variance review process to a conditional use permit (CUP) process. A CUP
is required to go before the Planning Commission and include a public hearing but is also
required to go before the City Council for final action. This would lengthen the amount of
time a property owner would spend getting approvals for an ADU.
• Typically, ADUs are added over attached garages associated with single family homes.
o There are a number of older properties in Chanhassen where the only garage is
detached from the primary structure. If the property continued to have one
driveway and no separate utility services, would the planning commission support
the city allowing for ADUs over detached garages in situations where the only
garage for the property was detached?
o This would require an ordinance amendment regarding ADUs and an adjustment
to the allowable height of accessory structures in the event that the accessory
structure serves as the primary garage and contains an ADU.
• A potential combination of the above options or another consideration that may be
provided through conversation by the City Council.
Councilmembers said that there were a lot of nuances to the topic of ADUs (renting, size and
structure, access and warrants, etc.) and agreed that they would like to move forward with Mr.
Maass’s process of finding the best solution with regards to the variance process for ADUs and
said it was important to find out what is the primary pain point(s) in the city’s current process
and policies for residents looking to add an Accessory Dwelling Unit and how can the city help
to alleviate those frustrations.
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Mayro Ryan recessed the work session at 6:55 P.M.
Mayor Ryan reconvened the work session at 7:44 P.M.
Discuss Ordinance XXX: Amending Chapter 1, Chapter 11, and Chapter 20 of Chanhassen
City Code regarding the regulation of Cannabis Businesses
Following the closed session, the council resumed its work session in the Fountain Room and Eric
Maass, Community Development Director led a discussion on the city’s plans for an ordinance
related to the zoning regulations associated with cannabis business operations. At the December
9, 2024 City Council meeting, the council voted to table the draft ordinance in order to spend more
time thinking about a potential buffer for cannabis retail stores (dispensaries) from schools and
residential treatment facilities (and potentially add buffering for liquor and tobacco uses as well).
Maass told council that, while there was not an immediate need for an ordinance, the city ought to
create one by April in order to meet various state timelines.
There was not agreement amongst councilmembers on how to craft the city’s ordinance regarding
cannabis businesses. Some councilmembers want to apply any buffer equally to both cannabis and
alcohol/tobacco stores, while others were willing to apply any buffer solely to cannabis stores
considering the fact that alcohol and tobacco establishments are longstanding, familiar industries
with well-established regulations and oversight at both the local and state levels. Some
councilmembers thought that cannabis, on the other hand, represents a new and evolving landscape
with many unknowns, including concerns about security at dispensaries and uncertainties
regarding state-level oversight. As a result, they felt it prudent to tread more cautiously and
implement stricter regulations specific to cannabis businesses.
At the conclusion of the council’s discussion, they agreed to continue thinking about the issue in
order to arrive at a balanced approach that addresses community concerns, ensures public safety,
and complies with state requirements, while also fostering a fair regulatory environment for all
affected businesses.
Mayor Ryan adjourned the work session at 8:10 P.M.
Submitted by Laurie Hokkanen
City Manager
Prepared by Jenny Potter
City Clerk