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CC Minutes 5-26-09Chanhassen City Council - May 26, 2009 Ron Olsen: Thank you. CONSENT AGENDA: Councilwoman Ernst moved, Councilman Litsey seconded to approve the following items pursuant to the City Manager’s recommendations: a. Approval of Minutes: -City Council Work Session Minutes dated May 11, 2009 -City Council Verbatim and Summary Minutes dated May 11, 2009 Receive Commission Minutes: -Planning Commission Verbatim and Summary Minutes dated May 5, 2009 -Park and Recreation Commission Verbatim and Summary Minutes dated April 28, 2009 Resolution #2009-41: b. Sealcoat Project 09-05: Approve Quotes. c. Dell Road Mill and Overlay Project: Approve Joint Powers Agreement with the City of Eden Prairie. Resolution #2009-42: d. Gateway North, Project 06-10: Accept Streets and Utilities. Resolution #2009-43: e. Public Works Salt Storage Facility: Approve Quotes. f. Lake Minnewashta Fireworks Committee: Approve Fireworks Permit for July 4. g. Ambrosen-Senn Hardcover Surface Variance: Approval of Time Extension to Remove and Revegetate Area and Submittal of As-Built Survey. h. Chanhassen Rotary Club: Approval of Temporary Consumption and Display Permit, Community Bank Customer Appreciation Celebration, July 2. Resolution #2009-44: i. Tax Forfeited Lands: Approve Purchase of Lot 643, Carver Beach; Lot 673, Carver Beach, Outlot A, Country Oaks; and Outlot C, Mission Hills. Resolution #2009-45: j. Resolution Accepting the Donation of the Veterans Monument from Chanhassen American Legion Post 580. All voted in favor and the motion carried unanimously with a vote of 4 to 0. VISITOR PRESENTATIONS: None. LAW ENFORCEMENT/FIRE DEPARTMENT UPDATE. Lt. Jim Olson: Thank you. Vice Mayor or Deputy Mayor and council. Before you this evening I’ve got my packet in which I have the sheriff’s office area report for the month of April. The citation listing, the community service officer report and I also have a couple of other items of interest that I’d like to speak about. Any questions at all with reference to my area report for the 2 Chanhassen City Council - May 26, 2009 month? Okay. I want to talk briefly about a burglary that we had earlier in the month of May. There was a burglary in Longacres and thanks to quick thinking and actions by the adult son of the homeowner, as well as some good police work by Deputy Ryan Thiel, we were able to arrest the suspect that same day. This was a crime of opportunity. The suspect was out driving around looking for a place to burglarize. He drove through this neighborhood. Went past this house and suddenly he stopped. So what was it about this house that caused him to stop at this particular house? The garage door was open. There weren’t any cars in the driveway or the garage, and it looked like there wasn’t anybody home. He checked the door. Or excuse me, he rang the door bell and nobody came to the door at all. He checked the door and found it unlocked. He opened it, went inside and went upstairs and started going through some drawers. Somebody was home though. The adult son was downstairs and he was busy and did not answer the door bell when it rang. The son heard him upstairs and ran upstairs and confronted the homeowner as he was going through some drawers. The suspect gave a story of looking for his dog and left. The son followed him outside and gave us a very good description of both the vehicle as well as the suspect and that helped us to arrest him. We were fortunate that nobody was hurt in this incident. There wasn’t any kind of a physical altercation or anything, and the suspect did leave. First off I want to thank the victim for his quick thinking and actions. It worked for him and it worked for us, but I have to caution people about confronting burglars in their home. I would hate to see somebody get hurt because of possessions. Stuff can be replaced so you know everybody needs to make that decision on their own but going outside and giving us a call by phone is always a good option as well. And I know I sound like a broken record with this but I strongly recommend and encourage residents to close your garage doors, lock your doors. Help us to help you. You know again this was a crime of opportunity. He was driving around looking for a place he could hit. He found this one and he chose this one because of those things I talked about earlier. Help us to help you. The second thing I wanted to talk about was, we’ve been having a problem around the metro area with thefts at, expensive alcohol from liquor stores. In fact the Villager ran a story on this a couple weeks ago. Detective Bob Zydowsky, through some good police work, was able to identify and charge two more people involved in stealing alcohol from one of our businesses. These thefts have been a problem for our business owners. These types of crimes are priority for us and we will do everything we can to charge and/or arrest the people involved. It’s important for people to know that. Last thing I want to talk about, finally school is almost out and I would ask that motorists be careful when they’re driving through neighborhoods. The children are out and about and we have put quite a few pedestrians and bicyclists with this nice weather that are out on the roadway. Slow down a little bit when you’re driving through some neighborhoods. Are there any other questions for the sheriff’s office at all? Deputy Mayor Tjornhom: Does the council have any questions? Councilman Litsey: I just had one on the school liaison position. Lt. Jim Olson: Yes sir. Councilman Litsey: The City’s going to be partially funding that starting school year this fall. Lt. Jim Olson: Yes. 3 Chanhassen City Council - May 26, 2009 Councilman Litsey: How’s that progressing and how’s that going to be implemented? Lt. Jim Olson: It’s progressing very well. We’ve been meeting with them monthly. Putting that plan into place. Detective Bob Zydowsky will actually be our school resource officer that will be taking over there. We have chosen a new detective that will be in the city, and that will be actually Deputy Ryan Thiel. Ryan was involved with catching the burglar that I just talked about. He’s been around for 4 years working the city of Chanhassen and does a wonderful job. We get a lot of very positive comments, as well as the City gets a lot of positive comments about him too so he will be one that will be taking over Detective Zydowsky’s job. Councilman Litsey: No, that’s great to have a seasoned person in that position to start it off right and I think it’s going to be a great position so I’m looking forward to hearing how it works out so thanks for your efforts on that. Lt. Jim Olson: Absolutely, thank you. Deputy Mayor Tjornhom: Any other comments or questions? Alright, thank you so much. Lt. Jim Olson: Thank you. Have a good evening. Deputy Mayor Tjornhom: And Chief Geske will not be here tonight. The fire department is on a call so we will hear from him next time. 7470 CHANHASSEN ROAD, APPLICANT/OWNER JOHN COLFORD: APPEAL DECISION OF THE ZONING BOARD OF ADJUSTMENTS AND APPEALS REGARDING MULTIPLE DWELLINGS ON A SINGLE LOT ON PROPERTY ZONED SINGLE FAMILY RESIDENTIAL (RSF). Kate Aanenson: Thank you. This application appearing before you tonight is actually an appeal of an administrative decision. So the applicant requested a different interpretation from the staff so therefore the Board of Adjustment, the Planning Commission acting as the Board of Adjustment made a recommendation to you regarding the interpretation of the ordinance. On th May 5 the Planning Commission held a public hearing and voted 5 to 1 to affirm the staff’s interpretation regarding multiple dwellings on a single lot. The Planning Commission did discuss non-conformity of two dwelling units on the lot by increasing the square footage or adding to the site, and they did spend quite a bit of time taking public comment regarding this issue. Currently Lot 6 and 7, which I’ll show you in a moment are under one single PID. However staff was unable to document the combining of these two for zoning law purposes. Several of the residents that spoke at the public hearing were in favor of removal of the main house and the construction of the new house. Although they were concerned about rental. Continued rental of the structure. So with that I’ll go through the request in itself. Again this isn’t a variance. It’s an appeal of an administrative decision. The applicant at 7470 Chanhassen Road, which is Lot 6 and 7 of Sunset New Addition. So there are two homes on the lot, which I’ll show here. Currently. Most of these lots, most of these homes are rental. There’s two rental units in the larger house. One on the first floor and one on the lower level, and then the second 4 Chanhassen City Council - May 26, 2009 rental unit. All of the structures, including the garage, are non-conforming by the fact that one, by the fact that they are, don’t meet the setback requirements. And two, that there’s more than two structures on the lot. This is, the dashed line shows the two lots. And this is the applicable regulations. Again our interpretation of a dwelling unit, which these both are independent units. Actually there’s the two and one, and what would be a principle dwelling. So our interpretation is if you’re building a newer home than the two existing, non-conformities, should be removed. Because our ordinance says one home per lot. So on this, the appeal here is, the request to demo the building to, demo one building. This is the applicant’s requesting to build a new home, which would be the larger of the two and he wants to maintain the smaller dwelling unit. Their original request was to remove the kitchen or something that would make it non-rental, and the staff’s opinion on that is, it still has everything else and that really it still a rental unit and go ahead. Deputy Mayor Tjornhom: Can you designate what’s Building A and what’s Building B? Kate Aanenson: Sure. I can’t point to them from here but…the mouse. There you go. Thank you. That’s the larger building. Deputy Mayor Tjornhom: That would be demoed? Kate Aanenson: Yes. Deputy Mayor Tjornhom: Okay. Kate Aanenson: And then that’s the garage. The smaller building is that one and then the garage is towards the front. Deputy Mayor Tjornhom: Okay. Kate Aanenson: So the applicant’s requesting they keep the non-conforming garage and the other building non-conforming and build a larger house. So I think the original applicant’s interpretation is if I take out the kitchen then it’s no longer a dwelling unit. But really it still has everything else. It’s fully plumbed and heating system and the like. So this was the applicant’s request then to come in, leave the existing structure. The smaller unit on there and build a new house. You know we looked at could the houses be, could the lot be re-subdivided to meet the ordinance? It can’t. Even under our flag lot situation so now you have two dwelling units on one lot, and that’s where the staff said, if you’re going to re-build on that, that you should remove the other dwelling unit. And also some of the discussion that came up at the Planning Commission was by the fact that you keep that existing home, it pushes the new house, this area is older. Most of those houses sit up closer to the road. That it also pushes the house to the north because you have to get around, put the round about to get to the setback. The separation between the two structures. So in fact the house could move towards the center of the lot or back up the slope a little bit more, so there was some discussion on that point too. If everybody’s tracking me on that one. So again, the ordinance states he has the use to remodel the existing structure. The non-conformity could remain if you remodeled the existing footprint. The applicant is choosing not to remodel the existing footprint. Wants to tear that house down and 5 Chanhassen City Council - May 26, 2009 make a whole new house so therefore that’s where our interpretation that it’s expanding the non- conformity because they’re tearing that house down. Now you need to make everything correct and not have two structures on there. So this would be the staff’s recommendation. To eliminate that non-conformity. And again here’s the applicant keeping the existing house. And then the interpretation then would be the city would affirm the Planning Commission’s interpretation of the case, and the interpretation is that you’d have multiple dwellings on one single family lot, so again it’s not a variance for setbacks or anything. It’s interpretation of whether or not both of those homes, having two houses on there meets that definition. And again the Planning Commission recommended 5 to 1 on that. I did pass out an additional letter that we received today from a neighbor. McHugh’s regarding the rental units. So with that I’d be happy to answer any questions that you have. Deputy Mayor Tjornhom: Questions for staff. Councilman McDonald: Kate, I’ve got a question for you. If you go back to the existing drawing that shows, yeah the current houses that are on there. The two lots. At one time then, this is Lots 5 and 6. Where’s the lot line? Is it kind of between the two buildings? Kate Aanenson: Yeah, that dash line. Correct, it’s the dash line between the two. Councilman McDonald: Okay. Kate Aanenson: Right so the one structure goes over that line and so it’s non-conforming in both scenarios. Over the setback line and then over the property line, that one does correct. Councilman McDonald: And so then when the structures were built, they were built upon two separate lots and later combined into one lot? Kate Aanenson: That’s what, there’s no record of that. But that would be our best assumption. Councilman McDonald: Okay. That’s all I had. Deputy Mayor Tjornhom: Any other questions for staff? Councilwoman Ernst: So Kate why, so you’re saying we don’t have any record of it. Why, wouldn’t we typically have a record of that? Kate Aanenson: Well it probably pre-dates, they’re probably built in the you know, and if they were built in the 30’s or 40’s, we wouldn’t have those records of when, how they were combined. If they were under two owners had combined those or when the houses were built. Councilwoman Ernst: And they don’t have the documentation either? Kate Aanenson: No. So one of the recommendations that we would have is that when the new house gets built we, one of the conditions was that it be combined as one zoning lot, so it’s one lot. 6 Chanhassen City Council - May 26, 2009 Councilwoman Ernst: I heard you mention that they could remodel. A recommendation was that they remodel. Kate Aanenson: Right, the ordinance says if you have a non-conformity you can maintain that non-conformity so they would stay within that building envelope and that building footprint which would be remodel the existing home, but that’s not their desire. Their desire is to build a lake home closer to the lake. A larger home. Councilwoman Ernst: So they’d remodel the existing home and then, which would be, is that A? Is that House? Kate Aanenson: That’s the one they would like to keep as yeah. The applicant has stated that they would like to keep that home and, for their purposes. Todd Gerhardt: Not that one. The littler one. Kate Aanenson: The smaller one, correct. Yeah. Smaller one. And that would be removed. That one would be removed. Todd Gerhardt: Do you have the. Kate Aanenson: Or the applicant’s. This is the applicant’s request. To remove that one house. Move their new house closer to the lake and keep the existing smaller house. Councilwoman Ernst: But either way you’re saying that this existing smaller house has to come off? Kate Aanenson: Our ordinance says you can have one principle dwelling on a lot. So there’s one lot and the new house would make the principle dwelling. And it’s because they’re changing the situation. Making a bigger house. So now you’re bringing it into conformity. As I explained to the Planning Commission, you have, this is your opportunity to bring it into conformance. So if you don’t do it at this point, and then it will stay there. So the non- conforming, to address the time of non-conforming is when you have a situation that you can remove it, and because someone wants to tear the house down to build a new house, your opportunity to remove the non-conforming situation would be at this point. Otherwise there would be no opportunity in the future to change that. Councilwoman Ernst: And I missed it. Did you say the house was being rented now? Kate Aanenson: Yes. Well I’ll let the applicant address that but there is the potential licensing for 3 units. One in the small and the larger house, the larger house there’s an upper level and a lower level. There’s 3. So a total of 3 on the property. Councilwoman Ernst: Okay. 7 Chanhassen City Council - May 26, 2009 Deputy Mayor Tjornhom: Alright is the applicant here? Would you like to come forward? Please state your name and address for the record. John Colford: John Colford and we bought this actually in November of 2008. I think one of the sheets said 2007. If that had happened I’d be living in a new house on the property. The staff’s recommendation for the new house closer to the lake and elimination of the guest house or the south structure, the B structure, that’s been appraised. That’s what I’m trying to do and that’s $200,000 under water. The value that it appraises at is less than what it would cost to build. So it’s not really a choice of mine. A bank won’t lend me the money to do that, and that’d be relatively irresponsible to do anyway getting under water, you know properties that are under water are sort of a problem now. So that’s not really a choice that I have. That’s a non starter that won’t happen. So, the you know keeping the guest house is a way to maintain value on the property and to try and counteract or a counter balance to the under valuation of the project and to make it economically feasible. The, I mean you have to buy a viable rental property with 3 dwelling units that you can rent out for about $3,500 a month. You have to buy that and eat the equity in 2 houses to be able to convert this to a single family dwelling zoned you know house and place. And so somebody has to eat that equity and go in the hole and you know as I said, I can’t do it. You know the bank’s not going to lend me the money. You know someone with a lot of money down who’s willing to make a pile of cash that’s $200,000 and light it on fire, you know if somebody’s out there who can do that, you know maybe I can sell this to them but I can’t. The purpose of the non-conformity code is to encourage the elimination of non- conformities. I’m not sure I’d use the word encourage. What I’d like to do, what I would propose to do would be to reduce the non-conforming number of dwellings from 3 to 2. I would eliminate a 2 dwelling residential building. Create a residential single family detached dwelling with a single dwelling unit. I would eliminate the non-conforming setback to the north. And I would eliminate the non-conforming hard cover and bring that into conformity. So yes, I would like to expand the square footage of the new principle building. That would be conforming in every way. And somehow that’s the thing that seems to be stopping this. That that’s intensifying the non-conformity of having 2 principle dwellings. Well, the existing house to the south is clearly the secondary dwelling, you know what I would like to make a guest house. You know that’s, that would not change and you know the fact that, that the code says not more than one principle dwelling. Well, I would think you would have one principle dwelling that would be conforming before you would have a second principle dwelling that would violate that code, and that’s all an existing non-conformity here. You know I think it’s well intended and the neighbors have this fear and the Planning Commission has this fear that the existing house to the south B would be continued to be rented out. I mean as it stands now it’s a viable rental property. $3,500 will cover the mortgage. Cover the taxes. Cover utilities. Cover upkeep outside of disasters. Not particularly profitable from month to month but you know you’re going to come out ahead. You’re going to pay down the mortgage. There’s going to be some accrual of value. When you eliminate the building A, the main building, the building with 2 dwelling units in it, that’s $2,500 of the rent. You’re down to $900 or $1,000 in that guest house. After utilities and upkeep, you’re talking about $500 a month. And if you put you know an $850,000 house on this, you make it a $1.3 million dollar property where your principal and interest is $6,000 a month, give or take a thousand depending upon where the interest rate falls. Getting $500 a month from that to the south, I mean that’s 6-7 percent of the principal and interest payment. I mean is that a viable business model? I mean are you going to share your lake home 8 Chanhassen City Council - May 26, 2009 and your lakeshore with the riff raff from Craig’s List and you know questionable characters? I mean that’s, really doesn’t pass the common sense test. I mean that doesn’t strike me as a reasonable fear. If somebody buys this in 15 or 20 years is going to pay 7 figures for their lake home, you know are they going to share, you know are they going to rent out their guest house for a couple hundred dollars a month? I think that’s really unlikely and that’s the fear that’s driving this decision I think, and I think that’s an unreasonable fear. And you know the proposed conditions I think that’s a win for the city. We’re getting rid of a relatively unattractive, multi dwelling, rental unit. It’s going to be somebody’s house. It’s going to be a very attractive house on a lake. You know designed by the Alexander Design Group. She’s got a bunch of houses on Lake Minnetonka. You know I think it’s going to be a lot more tax income. I mean my goodness, I mean just think how much that little house the Carver County Assessor could think that that was worth and tax accordingly. You know I, the days where knock down’s were paid for by large year after year accumulations of value, you know that ship has sailed. This isn’t going to go up by 7 or 8 percent a year. This is, this property is going to go down in value over a year, over the next 2 years and then it’s going to stabilize for a couple years, and then hopefully we, real estate prices will return to moderate sustainable growth. I mean this real estate bubble that makes this a viable you know, makes knock down construction viable, I don’t see that environment returning probably I don’t know a generation before we forget that lesson of history. I don’t know. It’s going to be a long time. And I think, you know remodeling a house that’s existing, that would cost a lot to remodel turning basically a duplex into a single family home. You know the houses around it right now don’t sell for $600,000 and $700,000 so it probably wouldn’t even be worth that. I’m not sure that’s economically feasible. That’s number one. Number two, if you remodel that house you’ve got no incentive to get rid of the guest house. The structure B. No incentive. If you’ve got $900,000 you can build a house closer to the lake at the same square footage of what’s allowed under the staff’s interpretation, you’ve got no incentive to get rid of building B. The only incentive is when you know someone who’s going to come by and put a ton of money down and it’s going to be worth a lot more than the project I proposed. I’m not sure that’s going to happen because that would be the biggest, most expensive house on the lake and it would be 2 and 3 times the value of the houses around it, which is pretty hard to sustain. So what you’d want is probably something along the resources of what I’m proposing. I can handle eating the equity of one house. I don’t think I can handle, well I’m sure I can’t handle, I’ve tried. I can’t handle, that’s not going to happen eating the equity of both houses and I would propose keeping that second house, making it a guest house. It’s a swanky place to leave your, or have your out of town friends and relatives stay. It’s not you know, I appreciate how many problems the city and the neighbors have had with the rentals, but I mean that’s just not, it’s not a viable business model. It doesn’t pass the common sense test. I mean I think that’s an unreasonable fear. If I can’t make this work, I mean it’s guaranteed to stay rental. It’s guaranteed to stay a 2 or 3 dwelling rental. And I think that it’s going to be a persistent, practical and financial barrier to the redevelopment of this lot. You know this, that there’s no way to sort of hand onto some of the equity in the house. Try and reduce, I mean I’ve reduced as many non-conformities as I can. I’ve reduced the number of dwellings. I’ve eliminated a multi unit dwelling. I’ve eliminated the non-conforming setback to the north. Bring the hard cover into non-conformity. Those are the non-conformities I can reduce and eliminate and still make it economically feasible. You know much past that I think we’re, I mean I can’t make it happen. Can’t make it happen so, I mean I think this is a win. It’s not, it’s not a financially a win for me. I will barely keep my value. I mean I’ll probably at the water 9 Chanhassen City Council - May 26, 2009 level or a little bit below it over the next couple years so this isn’t a money grab on my part. It’s about feasibility. I mean it’s a perfect spot, location for me. For my work and, I don’t know. Deputy Mayor Tjornhom: Okay, thank you very much for your, are there any questions? Councilman Litsey: I do. When you purchased this property, you said it was in 2008. Not 2007. Did you do your due diligence at that time and check with the City to see what your options were in terms of how this land could be used? John Colford: I did. I did. I called the regular office and asked who could I talk to about doing this sort of thing and they sent me to the building department. Not necessarily the planning department and they said an existing non-conformity like that would be grandfathered in. And I asked. Kate Aanenson: That is correct. If you left it just the way it is, it is correct. You could remodel those two. John Colford: Well the way I framed it is we’d like to build a bigger house near the lake and were wondering if we’d be able to keep the guest house. I mean I framed the question to the building department exactly like that and I was told that it was an existing non-conformity and was grandfathered in. Councilman Litsey: But you didn’t take it a step further? I mean talk to the planning department or. John Colford: Well, I mean I called the City and asked who would I talk to for you know, you know who could tell me what my options were with that, and they sent me to the building department as opposed to the planning department so. Councilman Litsey: The other thing is, I can appreciate your economic considerations here but you understand that we’re looking at it from what’s in the ordinance and so forth and we’re not here to try to make a business plan work for you. We’re trying to do what’s right in terms of. John Colford: Right. Councilman Litsey: Okay so, so it’s not that I’m not sympathetic to that but we have to look at it from a little different perspective obviously. It just seems if you’re going to be making a business decision like that, perhaps you might carry it one step further and really research that out but at least you called the city. That was a good thing so. John Colford: Yeah and I, you know the ordinance that is being intensified here is discussing the number of dwellings. I’m reducing the number of dwellings and I’m keeping the number of principle structures the same. That code doesn’t really describe square footage. In fact there’s another part of the code where square footage is specifically allowed to be expanded as long as the non-conformity is not increased. I believe that’s sub-section (d). Yeah. Sub-section (d) under Section 20-72. A non-conforming use may be altered or expanded provided that the non- 10 Chanhassen City Council - May 26, 2009 conformity may not be increased. I’m expanding the square footage and I’m either leaving all the non-conformities static, I’m reducing them or I’m eliminating them. You know I’m not increasing the number of dwellings. I’m reducing them. I’m not increasing the number of buildings. I’m keeping that static. I’m eliminating the non-conformity to the north and I’m eliminating the non-conformity of hard cover. So I, there’s that. I think the merit of that argument is valid but I mean maybe my best chance is the, notwithstanding the prohibitions approved by the City Council, a use of, a non-conforming use of less intensity can be approved if it’s in the public interest. Well, I mean I propose to get rid of a three dwelling rental unit that’s caused the neighbors and the city a lot of problems and put my wife and two, and three kids there and live there for the next 30 years. And provide a much better, stable environment. Raise the value of the houses around me. Increase the tax value of my property and the property around it. Increase the tax revenue so. I don’t think it could be argued that what I’ve proposed is a non- conformity of less intensity. Whether it’s in the public interest or not that’s for you to decide but I think I’ve got a reasonable argument that I’m not intensifying a non-conformity either but. Obviously people disagree with that. Deputy Mayor Tjornhom: Are there any questions for the applicant? Councilman McDonald: I’ve got a couple. Can you explain, you mention something about the financial impact of this as to why you can’t tear down building B. I’m not quite sure I understand that. You talk about the equity but yet these buildings are not at the level of what you’re planning on building. Why isn’t the equity just swapped from one place to the other? John Colford: You know if you could convince a bank and an appraiser of that, I wouldn’t be here. I’d be, if that appraisal had worked, if that had appraised for the cost of the lot and, you know I don’t know why. And all I know is that that has been rejected. I would have thought it would have worked but we did try that and it didn’t and what I did, and we went with a little less expensive builder. We’ve eliminated a lot of things like building cabinetry inside that you know won’t necessarily effect the appraised value to try and bring the cost down. If we shrink it then we start hitting the appraised value and we still have this gap. We can relatively easily remodel it to make it look as nice as the new house will look. You know that’s some siding and some upgrades on the inside, and that we can do relatively cheaply and maintain a lot of value. A lot of bang for our buck on the lot. So that’s why you know trying to hand onto that, to the guest house to the south is you know essentially the thing that’s going to make this project appraise at cost and be able to make it economically feasible. And I don’t see how we’re going to return to you know that situation where you know we’re going to have these year upon year increases in value that make it economically feasible. I think if this sort of thing doesn’t happen then it’s going to be a rental property until I can sell it and then it’s going to be a rental property and there’s going to be that persistent financial barrier to the redevelopment of that property so. Councilman McDonald: Okay, and then let me ask a couple more questions because I want to follow down this line about the due diligence and everything. Did you by any chance consult with an attorney before you bought this? John Colford: No. No, not an attorney. 11 Chanhassen City Council - May 26, 2009 Councilman McDonald: Are you aware of, there’s been a number of statutes passed about grandfathering in cabins on lakefront property and what you can and cannot do as far as rebuilding on the non-conforming lots there which would apply here. Has anyone ever talked to you about any of those? John Colford: And that would be at the State level? Councilman McDonald: Well there are laws that govern on rebuilding cabins up on lakefront property as to what you can and cannot expand, and it’s the same thing about rebuilding upon a non-conforming land. Can you expand and get a better cabin than what you had before and the answer has always come out no. John Colford: Right. Okay. Councilman McDonald: And that’s part of what you’re facing here also and I just, I mean I can appreciate you trying to understand what the statute says but without actually going in and looking at how it’s been defined within the courts, that’s where you’ll run into a problem and it’s pretty well defined as to what you can and cannot do on non-conforming property with a cabins on lakes and everything. So as Councilman Litsey has stated, and part of what we have to look at is again conformance within the law of what we can and cannot do on these lots. You talk about the rental and everything. I’m sure councils before us were given the same assurances about this property because it used to be a single family and circumstances happen. All of a sudden it becomes rental. There is nothing we can do about it at that point and yeah, that’s why we’re doing our due diligence to make sure that we take care of this problem. So I think that’s part of what our decision’s going to be based upon. John Colford: Sure. Sure and I, you know I don’t have a cabin so I hadn’t realized or appreciated any of those issues. You know again I just called the city and had assumed that was a reasonable answer. But yeah, I mean I can appreciate that but I, I mean I’m having a hard time envisioning someone again paying 7 figures in 20 years, $2 million dollars for this property to sort of turn around and rent out the guest house. I just, I just, I don’t know. That seems unlikely to say the least but. Councilman McDonald: I have no further questions. Deputy Mayor Tjornhom: Councilwoman Ernst. Councilwoman Ernst: And this question’s probably more for Kate. Kate while we don’t, I keep going back to the comment where we don’t have any documentation of combining the two, or combining the parcels. Do we have the documentation that says that it is one principle dwelling? Kate Aanenson: Well it’s under one ownership. It’s two lots under one ownership so. So there’s Lot 6 and 7 but it’s under one PID for tax purposes. So to the best of our knowledge the houses were built in the 30’s. Somehow the plat got platted. These are probably older cabins in the 50’s. 12 Chanhassen City Council - May 26, 2009 Todd Gerhardt: Deputy Mayor, Council. If you look at the existing house and the second house, they both sit on the two lots of record, so they basically you know kind of met the ordinance. The problem is, is he wants a larger house that cannot fit on one, or either of the two lots. It’s got to sit on both. So today, with the exception of the setbacks from the lot line, they do kind of meet the intent of being on a separate lot of record. We’re looking at the remodeled on. If you go to the existing. This shows a wooden deck which goes across the lot line. So they did meet the requirements back then. Just what they didn’t have back then was site coverage and some setback issues. Kate Aanenson: Right, and riparian lots are required to be larger now than they were at the time. Councilwoman Ernst: But when you were talking about, Mr. Colford when you were speaking to the fact that you won’t remodel the house, is that correct? You want to make it bigger. John Colford: Yeah. Well I’ve got 3 kids under 5 so we’re sort of looking for a two story with 4 bedrooms up on top so you can’t have a, you know, prefer not have a younger child on a different floor. So yeah the, that’s sort of, I mean it’s basically a duplex right now and trying to cram in 4 bedrooms on one or the other floor is not, doesn’t really work from that standpoint and you know again remodeling that existing house, you know the house just to the north of it that’s nicer is not, hasn’t sold for 3 years at $600,000 so I would be under water in a house I didn’t really like. I mean that really doesn’t solve the major fear of this, that the house to the south will be used as a rental property and that would, if someone remodels that house to the north they’ve got much more incentive to continue renting that house to…than anyone who has the house I propose. You know that would not be our preference and I mean I would probably, if I can’t build I will probably keep that as a rental until I could sell it and so something else. Councilwoman Ernst: Well that’s where I’m a little bit unclear because I heard Mr. Gerhardt talk about the fact that you wanted to expand the house. John Colford: Yep. Councilwoman Ernst: But I thought that we were talking about the existing house that’s on there, and not the one that you’re talking about expanding. Is that correct or am I incorrect on that? John Colford: Well, if we could go to my, yeah. So the new house is towards the lake from the roundabout and that has a bigger square footage than that existing house up towards the road. The existing house B is about a 900 square foot house that you know I would just turn into a guest house and you know fix it up and make it look nice. So I mean that’s what we’re proposing to do and I’m barely hanging onto you know building B or the existing house there to make it a guest house to try and. Councilwoman Ernst: So you still have 2 dwellings? 13 Chanhassen City Council - May 26, 2009 John Colford: Yes. Which is the status of what it is now. It’s 2 dwellings. Well, 2 buildings with 3 dwellings and I would propose to make 2 buildings with 2 dwellings. So actually reduce the number of dwellings. Councilwoman Ernst: Okay. Deputy Mayor Tjornhom: Thank you Mr. Colford. Is there anyone else who would like to discuss this issue tonight? Seeing no one I’ll bring it back to council and comments and thoughts. Councilwoman Ernst. Councilwoman Ernst: I, you know I’ve heard a lot of things and I’ve thought through everything that’s been said and really putting all the economic piece of it aside and going with what we have in front of us today being the documentation, the way that the site is today, I really feel that this is very subjective in terms of not having that documentation and I feel that it, because we don’t have that I feel that it really favors the request of the constituent and unless I’m missing something it just feels like we should have that, and Todd I think that you mentioned at the time that he did this that probably was the ordinance. But things have changed and again you called the City and they said that you were probably, you were grandfathered in with the way that this site was at that time. Kate Aanenson: Yeah, that’s a correct statement. He’s grandfathered in. It’s when you tear down a structure and try to rebuild over a property line that you have 2 structures on a lot. Councilwoman Ernst: Right. And that’s the piece that I don’t support so. Kate Aanenson: But even if they hadn’t combined them they’re still building over a lot line so there’s a lot line there he’s building over. Because there’s 2 lots. Councilman Litsey: The documentation to me seems somewhat irrelevant because even if it was 2 lots you still couldn’t make it fit. Kate Aanenson: Correct, because it would only have 50 feet of frontage. He couldn’t fit that house on the one. If he tore the one house down, it doesn’t fit on his. Councilman Litsey: On that lot right so, so to me that document, I mean the way I look at it with that documentation, if I’m looking at it right, is kind of irrelevant. You couldn’t make it work anyway. Kate Aanenson: That’s correct. With the 100 foot, yeah. Councilman Litsey: Yeah. Councilwoman Ernst: But at the time it was okay. The time that the lot was built. I mean that they put those dwellings on there. As I understand it it was okay to do that. Councilman McDonald: Right, but they put houses on there that met the lot requirement. 14 Chanhassen City Council - May 26, 2009 Councilwoman Ernst: Right, but he didn’t do it. Councilman Litsey: Oh I’m sorry, but I was just going to say well, so if that’s the case that doesn’t really change anything because if it was left the way it was, you couldn’t fit this house on it back then and you can’t do it now. It wouldn’t really matter. Either way you couldn’t make this work. Within our, the ordinance then or now. Councilwoman Ernst: With our ordinance now. Councilman Litsey: Well even back then I don’t think it would have fit. Kate Aanenson: That’s correct, it wouldn’t have fit. It wouldn’t have fit back then. It wouldn’t fit today. The house is substantially larger than the lot. Councilman McDonald: You would have had to straddle lot lines and you can’t do that. Kate Aanenson: The lots aren’t that wide. Councilwoman Ernst: But I guess my concern though is, even if it wasn’t at that time, why are we holding, why are we holding this constituent responsible for what was then? Councilman McDonald: But I’m not sure. Councilwoman Ernst: Because he hasn’t built any additional buildings on it. Councilman McDonald: I’m not sure what was done then. Back then everything was done according to whatever the code or whatever it was for the lot. Councilwoman Ernst: Right. Councilman McDonald: You had 2 residences that were built on 2 lots. At some point in time they’re combined into 1 lot. In order for him to build the type of house he wants he needs 2 lots anyway so he has to build upon the 2 lots and he has to combine those now into 1 lot. That’s what he’s looking at doing. Councilwoman Ernst: But if he didn’t do that, to Kate’s point, he would be fine. Councilman McDonald: He would be fine but that means he can’t build a house that he’s proposing. Councilwoman Ernst: Right. Councilman McDonald: All he could do is take the existing structures and go with those. Kate Aanenson: Correct. 15 Chanhassen City Council - May 26, 2009 Deputy Mayor Tjornhom: He can improve upon those. Kate Aanenson: Yeah. Councilwoman Ernst: Well he can take the one down if he wants too, right? Kate Aanenson: Or make it fit, and make it skinny on the lot. There’d be a, it’d kind of be what we call a shot gun style house. We looked at all those iterations. We looked at trying to do a flag lot. We looked at all the possibilities of trying to make it fit to create another lot but it wouldn’t meet, then he’d need variances to make all that work. We looked at all those iterations. It’s narrow. To meet the, it’s only 105 feet at the lake frontage which is you know 90 feet, and you need to add that, the building setback. So for that size home, if you look at kind of what we’ve approved recently, that would be pretty typical. Councilwoman Ernst: And that’s not something that was considered to? Kate Aanenson: We approached that. Councilwoman Ernst: No, but I mean the constituent. John Colford: To build on one of the 2 lots? Councilwoman Ernst: To take the one, the one dwelling. Or the one house and expand it, Kate maybe you can explain it better than I can. Kate Aanenson: Sure. If you look at the building envelope, maybe Laurie if you could help me. On the north of black, go to the north line. Black line. That would be the building envelope and then that dotted line where she’s pointing right now, so you’d have to maintain 30 feet from that line and so you’re looking at, I think we measured that, probably about 50 feet at best wide or 40 feet so it becomes a very narrow, to make it fit on the lot and meet the setbacks. Yeah. Todd Gerhardt: I think Councilmember Ernst’s question is, you have 2 lots of record and you could build on those 2 lots of record. Councilwoman Ernst: Right. Todd Gerhardt: You could keep the existing lot to the south and tear down the bigger house to the north and build on that lot but you would have to comply with the setbacks and what Kate is saying, it would be a long skinny house and that is not the type of house they’re looking for, is my guess. John Colford: Yeah, I wasn’t aware of the possibility but yeah. All of the discussions were with, it’s not actually subdividable because then there would not be… 16 Chanhassen City Council - May 26, 2009 Deputy Mayor Tjornhom: You know what, excuse me. Do you mind stepping back up to the podium. John Colford: Oh, I’m sorry. I was told the lots were not subdividable because they would not create 2 lots with 20,000 square feet. Because the square footage is 36,000 and the minimum for a lake lot was 20,000 so, or so I was told. Kate Aanenson: Yeah. No. Well we looked at that and we looked at doing a flag lot too but it, they’re not, by the time you get the setbacks they’re, like I said, 40 feet in width. Todd Gerhardt: So it kind of gets then, do you want a 40 foot wide house? John Colford: Well I mean the separation I had proposed would be to leave all the lakeshore with you know the 20,000 foot lot and then create a non-lakeshore, 15,000 foot lot with the existing house on it, and that would be altering the lot lines which is also not a possibility so. Kate Aanenson: Neither one of those lots would meet the requirement. We did look at that too. We looked at every iteration so. John Colford: Yeah. Todd Gerhardt: But you know you’ve got 2 existing lots today and they’re lots of record and you can build on those as long as you comply with the ordinance as it is today and that would get you a 40 foot wide house by however long setbacks would be. Councilwoman Ernst: It’s not giving you what you want but it’s giving you an option. John Colford: Right, yeah. Yeah, and I, yeah. I mean re-subdividing died an early, you know that, it seemed impossible for all the reasons that we’ve stated so we didn’t really go down that path. Todd Gerhardt: Yeah, this wouldn’t be a subdivision. You have 2 lots of record right now. John Colford: Yeah. Todd Gerhardt: And when you have 2 lots of record you have the legal right to build something on one of the 2 lots or both lots. But it’s got to meet the city setbacks. They’re not very wide lots so you’re limited to the building pad area for your home. Does that make sense? John Colford: Well all except for the building on both lots. I can build a structure on both lots because that’s what I thought I was trying to do. Todd Gerhardt: You could build one structure on one lot and another structure on the second lot. But you have to meet today’s setbacks and conditions that are in the ordinance today. 17 Chanhassen City Council - May 26, 2009 John Colford: But again I thought, I mean I was told I could not do that specifically because of the minimum acreage requirements. That the 2 lots would not have 20,000 square feet each. Todd Gerhardt: No. Kate Aanenson: No. Councilman McDonald: I know but the two lots already exist. Todd Gerhardt: They exist. Councilwoman Ernst: Right. John Colford: Okay. Todd Gerhardt: They’re 2 lots of record. Councilman McDonald: You couldn’t, the problem you’re having is trying to create 2 lots. Out of the 2 lots that are there, if you try to again create a separate lot for building B, that’s where you’re running into problems. You can’t get enough land to meet the acreage requirement. Deputy Mayor Tjornhom: Well and you also can’t have 2 dwellings on 1 lot. Councilman McDonald: Well there would be 2 lots. Deputy Mayor Tjornhom: But if you combined the 2 lots into 1. Councilman McDonald: But okay, what he would need to do is do away with the diagonal line. Deputy Mayor Tjornhom: Exactly. Councilman McDonald: And now somehow surround Lot B with a new lot and there’s not enough land to do that. You can’t meet the requirements. Kate Aanenson: Now we’re subdividing. Either the lot stays, line stays where it is and we stay within that framework or we do something else. You know we looked at this. Because now you’ve got to meet all the new litmus test on the lot square footage once you change that line and we looked at all that and I believe Angie went through that with you and it doesn’t work so. Unless you choose a shot gun style house but it was our understanding that… Councilwoman Ernst: Really my point was, is just, to Todd’s point is giving you that option to do with what is existing today and again it’s not getting you what you want but it’s something more than what you have been, than what’s being proposed. John Colford: Sure. 18 Chanhassen City Council - May 26, 2009 Deputy Mayor Tjornhom: Okay moving on. Other comments. Councilman McDonald: Well I guess the only thing that I would look at is, we’ve had a couple of other proposals come before us about the 2 residences on one lot and we have not granted any of those for the particular reasons of what the ordinance states. In order to grant what he’s asking for here, I think that we’re setting a precedent on a number of lots, and especially upon some of these lake lots as to what’s going to happen there. And just because of that, I couldn’t support it. And to, I mean you can give us all the assurances you want but again all we have to do is look back at recent history and circumstances change. Once it’s approved out of here it’s your property and unless you violate some ordinance or something, everything can be rented out. It can go right back the way it was so. John Colford: I mean the current rental license is up for expiration. I mean there are ordinances that govern rental properties and those ordinance are enforceable. And to, I mean the non- conformity is being eliminated to make that basically easier. That’s a pretty substantial current and future value to be, to deprive a constituent because you know this fear that it would be rented in the future when there are ordinances that govern that and I mean when your license is expired you’re not allowed to rent and that’s an enforceable action. I mean you know. Councilman McDonald: Well my understanding is the people that were there before weren’t exactly following the ordinances either and once you get in, it becomes very difficult to start enforcing all these ordinances. What I’m saying is, is that you know if we allow you to have that at some point in the future it could be rented. That’s what everybody’s fear is. That’s what’s happened before. That’s what we’re trying to eliminate so based upon that, you know again our interpretation would be that once you start to tear down one of the non-conformities in order to do what you’re doing, you have to tear down everything. I mean that’s kind of our reading and that’s been consistent throughout I think everybody you talk to and so, yeah we can look at other options because again you do have 2 lots. You could tear down building A. You could build upon that lot and as long as it met all the requirements, everything’s fine. You can keep building B. That’s no problem. I appreciate the problem you’re having with the bank. I guess the only thing I would look at there is if you’re going to build the type of house you’re looking at, that equity’s got to shift to that. I mean it’s lakefront property. It’s worth something. I’m not sure if your taxes are going down next year or not according to the assessor, because it is on the lake but that’s next year’s problem. I don’t know what to tell ya. I mean that’s kind of the perspective that I look at this from is you know what are we doing as far as the ordinance and our interpretation within the city’s been pretty consistent there. I mean one of the things you brought up is that yeah, for a public good but the burden’s upon you to show how it’s a public good. And just eliminating you know the supposed rentals, again that probably doesn’t meet the burden. I appreciate the problem you’ve got but I’m afraid we can’t do things to help you from a financial standpoint just because the bank doesn’t see things quite the same way that everyone else does. Deputy Mayor Tjornhom: Okay, thank you. You can have a seat. Bryan. Councilman Litsey: Actually I agree with what Councilman McDonald said. I don’t have a whole lot to add. I mean you have some options here. Maybe look at those but I think what you’re trying to do here is simply it’s just not going to work within the ordinance and so forth so 19 Chanhassen City Council - May 26, 2009 I don’t have much more to comment. Like I said Councilmember McDonald laid it out pretty well so. Councilwoman Ernst: The only thing now that we’ve come up with this other option I would totally consider, encourage you to at least talk with staff about that option and I would actually go along with Councilman Litsey and Councilman McDonald with what we have in front of us today. But again taking a look at those options. Deputy Mayor Tjornhom: Thank you. Yeah I’m going to go back to actually what the request is tonight because we’ve been talking about a lot of different things and so just for clarity so we all know what we’re voting on and what’s being discussed. The applicant is requesting that, let’s see. The applicant is appealing staff’s decision regarding multiple dwellings on a single lot on property zoned single family residential and so that’s really what the issue is at hand. Is if we as a council feel it is beneficial or not beneficial to the city to allow 2 dwelling spots on one lot. And so while we’ve heard discussion about the financial problems, we all understand those at this point. If you can figure out the market and real estate then you know I think maybe you’d make enough money to buy all the lakeshore on Lotus Lake and live there but unfortunately you know it’s a mystery to us all why some bankers render the decisions they do and as a council I don’t think it’s our job or it’s in our best interest to start dealing with financial matters and so I think it’s important to stay with the matter that’s at hand and the ordinance does state that with a single lot there should be done dwelling and so I am going to agree with the rest of the council members tonight that we should go along with staff’s recommendation. So do I have a motion? Councilman Litsey: I’ll make a motion. That the City Council affirms the Planning Commission and staff’s interpretation of Planning Case 09-05 for the property described as Lots 6 and 7, Sunset View Addition for the regulation regarding multiple dwelling units on a single family lot and requires the applicant to remove buildings A and B in order to build a larger dwelling unit and combine Lots 6 and 7 into a single zoning lot. Deputy Mayor Tjornhom: Thank you. Was there a second? Councilman McDonald: I’ll second. Councilman Litsey moved, Councilman McDonald seconded that the City Council affirms the Planning Commission and staff’s interpretation of Planning Case 09-05 for the property described as Lots 6 and 7, Sunset View Addition for the regulation regarding multiple dwelling units on a single family lot and requires the applicant to remove buildings A and B in order to build a larger dwelling unit and combine Lots 6 and 7 into a single zoning lot. All voted in favor and the motion carried unanimously with a vote of 4 to 0. POWERS CROSSING PROFESSIONAL CENTER: OUTLOT A, BUTTERNUT RIDGE (SOUTHEAST CORNER OF POWERS BOULEVARD AND HIGHWAY 212); APPLICANTS: UNITED PROPERTIES, LLC/TIMOTHY AND DAWNE ERHART. 20