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PC Minutes 7-7-20Chanhassen Planning Commission – July 7, 2020 2 PUBLIC HEARING: CONSIDER A REQUEST FOR A CONDITIONAL USE PERMIT (CUP) FOR FOOD PROCESSING AND OUTDOOR STORAE FOR SIX SILOS ON PROPERTY LOCATED AT 2100 STOUGHTON AVENUE (HEMP ACRES). Weick: The first item on our agenda is item number 2020-09 and will be in front of City Council on July 27th. It is a request for a conditional use permit for food processing and outdoor storage located at 2100 Stoughton Avenue and the name is Hemp Acres. And is that Mr. Generous, yes. We’ll turn it over to you Bob. Generous: Chairman Weick and commissioners. I was hoping that our presentation would come up on my PC. There we go, thank you. As you stated Planning Case 2020-09 is a conditional use permit request for food processing operation to process industrial hemp seeds into hemp oil and protein powders. This, the other part of the conditional use is for the outdoor storage of they propose to have 6 silos on the back of the building and so we wanted to address that upfront so people know that that would be coming. The applicant is Hemp Acres, LLC. The owner is Capstone Investors LLC. As you stated the public hearing is tonight and it goes to City Council on the 27th. The property is located at 2100 Stoughton Avenue. It’s surrounded on 3 sides by the city of Chaska. However it is in the city of Chanhassen. In 1958 Gedney Pickles consolidated their pickle operation at this site. Since then they were in continuous operation until 2019. Then they shut down their operation and the building has been vacant until earlier this year and then we have the easterly tenant moved in on approximately 40,000 square feet and they store Bradley Army vehicles in that building and then this is the westerly 50,000 square feet and they’re going to create the Hemp Acres processing facility. The legal description is quite convoluted and it includes land down on the Minnesota River valley. If you look at the, oh I should have. These sites used to be ponds for the treatment of the brine from the pickle operation so all the manufacturing waste or water were sent down there for treatment. The City of Chaska provides some treatment for the office portion of the building and so there is limited capacity that they provided. The applicant and the property owner need to contact the City of Chaska regarding all that and we’ve had Hemp Acres has had their SAC determination through the Met Council and they owe approximately one SAC unit which will be paid to the City of Chanhassen and then we will forward it to Chaska so. Again the request is for a conditional use permit for food processing and outside storage with the six silos on the westerly 50,000 square feet of the building. The River Valley Business Center is approximately 180,000 square foot building. This would be the second unit that’s occupied. There are approximately 90,000 square feet in the middle two additional units that would, would be able to be occupied for office industrial warehouse uses. However the limitation on those uses would be the ability of sanitary sewer services. The site does have it’s own well so that’s where all their water comes from. There is a potential if Chaska does not have sufficient capacity that they could create an onsite subsurface treatment system and that would be determined as future development comes in place. The property is zoned, is guided for office industrial uses in the City’s 2040 Comprehensive Plan. It’s zoned industrial office park and food processing and outside storage are conditional uses in the IOP district. Basically the 50,000 square foot unit is on the west end. Previously there was Chanhassen Planning Commission – July 7, 2020 3 an open covered dock area that has been removed from the site so it’s no longer there. In the future they’re looking at providing a parking opportunities on the west side of the building. When they propose to do that we will require that they come in with the plan and show us how they’re going to comply with city ordinance for landscaping and parking stall depth and drive aisle width. Access to the site is off of Stoughton Avenue. There’s a chain link fence that has an opening gate that they’ll come in through. The south portion of the building would be for sending out their, what they’re manufacturing. The north side and the silos would be on the northwest corner of the building and that’s where they’ll bring the raw hemp seed, industrial hemp seed into the property. I’ll have the applicant give you more discussion on their operation when they come for their presentation. Again this easterly run is where the armor vehicles are stored and then these two units are vacant right now. And this is a schematic aerial view. They’re proposing some changes to the entrance here to put in the handicap ramp and the addition of the silos on the northwest corner of the building. Their operation would be, the seeds would come in from the northwest corner and go through their conveyance system to the different processing operation. Lots of storage and warehouse in here. Here’s a distribution area that the trucks would take the stuff out. They have a small office portion of the development. We have calculated to see that they comply with city ordinance for parking and they have more than they need for this operation even if it was full capacity. And then Erik is going to discuss the site access, the road system and a little bit on the utilities so he’s on Zoom. Henricksen: Yeah, thanks Bob. Mr. Chair and commissioners, good to see everybody again. Just want to ask everybody hear me okay? This is a new laptop so I just want to make sure I’m coming in fine. Okay, good. So the review of this conditional use permit was unique in the city’s engineering and public works departments due to the site’s location and the surrounding public facilities. As Bob mentioned the site sewer is serviced by the City of Chaska. Water is had from a private well and there is no Chanhassen right-of-way abutting the property. As seen from this slide, the site’s primary access is on Chaska’s portion of Stoughton Avenue even though Chanhassen’s city limits encompass the site. The only right-of-way, the immediate area that is the City’s is a short section of Stoughton. It’s highlighted there in purple. And that section connects to Chaska’s section of Stoughton which then connects Carver County’s Flying Cloud Drive so it’s kind of a pass through right-of-way there. With that in essence there are no direct Chanhassen public services that the site utilizes even though it is fully within the city limit. With this unique situation engineering and public works staff reviewed the conditional use permit based mainly on the intent of Section 20-232 regarding transportation and traffic requirements of conditional use permits. This section essentially limits conditional uses that will create excessive traffic. Based on the proposed use the site does not appear to meet the threshold of excessive. If the site, if the site’s used as either 100 or more vehicle trip ends in any one hour or 750 trips per day a traffic impact study or some traffic analysis will need to be performed to further assess the impacts of the surrounding road network and to determine if the site was generating excessive traffic. As it is the judgment of staff and based on the proposed use there will not be nearly that amount of vehicular traffic. Staff has recommended that the CUP be conditioned that if an intensification of use of the site or expansion of the site is ever proposed then the applicant would be or should be required to provide such a traffic study. This is also in Chanhassen Planning Commission – July 7, 2020 4 align with the County’s review memo provided in your packet. Short and sweet but with that I will turn it back over to Bob. Generous: The one other thing about utility accessibility is the City did in 2015 look at a potential for City of Chanhassen providing services and the study determined that it would be feasible for the City to do it. However this is at the end of the line and it would take at least 3 lift stations to make this work so the timing on this operation is indeterminate right now but just to know that the City does have a potential as this is, if in the future to serve this with city services. Additionally as part of that look at, we’re looking at the potential for extending Engel Boulevard down to the northeast corner of this site to service this whole area. The utility extension would serve all the properties in Chanhassen, not just this one so there are other properties to the east that could connect to it and that as part of the 2015 study we did up guide several of the parcels in the area so they could develop at a more intensive and suburban type use so. With that staff is recommending approval of the conditional use permits for the food processing operation with outside storage of the six silos subject to the conditions of approval in the staff report and adoption of the Findings of Fact and Recommendations. With that I’d be happy to answer any questions. Weick: Thank you Mr. Generous. That was a good presentation. I have one quick question and then I’ll turn it over to the planning commissioners. Do you know the even relative height of the existing building that’s there? Even if it’s an estimate. Generous: I believe it is approximately 30 feet. Weick: Oh it is. Okay. So these silos are going to be roughly the same. Generous: Yeah a little bit higher. Weick: Okay. Generous: That one elevation sort of showed you the relative appearance of the units. Weick: Okay, that’s all I had. I will, I’ll just let our planning commissioners jump in right now if you do have questions for city staff. Reeder: Mr. Chairman? Weick: Yes, thank you. Reeder: Are these, who will own these tanks that we’re going to build? Generous: The applicant. Chanhassen Planning Commission – July 7, 2020 5 Reeder: The applicant but do they own the, are they buying the land? Generous: No they’re leasing it is my understanding. Reeder: So they’ll lease the building or…something that they’re leasing. Generous: Yes and they. Reeder: If they can maybe talk about that a little bit in their presentation. Weick: Other questions for staff? Reeder: All of this variances for outdoor storage is there any outdoor storage allowed? Over this one? Generous: That’s not part of their request. If they were to do additional storage they would have to come in for a separate conditional use permit. Reeder: Okay so just the tanks. Generous: Just the tanks and then of course their semi trailers will be on site but that’s part of their normal operation. Reeder: And if they could cover in their presentation whether there is any kind of an operation like this anywhere else. Just give me… Weick: Thank you Commissioner Reeder. Other comments for staff? Questions? Reeder: I guess I’ve got one more Mr. Chairman. Weick: Yeah please. Absolutely. Generous: The Fire Marshal has been intermittently involved with this so they’re looking at, they’ve already submitted the building permit application so we could get that review going and the Fire Marshal’s involved with that and the building official so and we’ve also had communications with the City of Chaska so. Reeder: Okay maybe they could cover that in their presentation too. Whether there’s any hazard to this operation. I’m really done now. Weick: Alright, fair enough. Any other questions for city staff from the Planning Commissioners? Chanhassen Planning Commission – July 7, 2020 6 Skistad: I guess I have a question. Weick: Yeah, sure. Skistad: Bob how do the wells work? I mean how much water does a well service? I mean I’m assuming it’s, it served Gedney so it probably will be more than adequate. Generous: I believe yes it’s more than adequate. They will not use as much water as the Gedney operation did so. The exact numbers I’d have to ask the building officials. Skistad: And then the holding pond would hold the 250 gallons of discharge? I read somewhere the process discharge was 250 gallons per day. Maybe that’s a question for. Generous: That would be for the applicant. Because they didn’t have any discharge from the manufacturing of the Gedney site but they’re also receiving less sewage to this operation so that’s part of the discussion they need to have with the City of Chaska. Skistad: Chaska, okay. Generous: Because their questions are where is it coming from? What are the connections and. Skistad: Okay. Generous: Which we don’t have, there’s no data like that available in our file so, because everything’s been done through them. Since 1963 they’ve had this agreement in place so. Skistad: Okay. Weick: Thank you Commissioner Skistad. We are open for other comments or questions for city staff at this time. And hearing none at this time I will invite the applicant to come forward. I will summarize, I’m sure you cover some of this in your presentation but I captured four kind of questions. One was is there anything similar in the area. Any type of similar operation. Could you clarify the silos that are being built on leased land. Is there any significant hazard to the operation? And then is there discharge and if so what is the gallon per day and where does that go. Charles Levine: Thanks for having me. My name’s Charles Levine, owner of Hemp Acres. Founder and Chief Operator. So we’re currently located in Waconia on our farm operating a 1,600 square foot facility. So to answer the question about the bins, they are pre-assembled. Meridian Bins is what we’d most likely be using but they’re steel, smooth wall hopper bins that come on a semi trailer and erected in place so it’s not something that’s built. We can physically take them on and off the site. And of other operations, I’m the only one in Minnesota for sure. There’s one operation in Carrington, North Dakota that specializes in flax seed oil that has now Chanhassen Planning Commission – July 7, 2020 7 started doing hemp but this is a brand new crop. Brand new industry and yeah I’m the first one to stick my neck out I guess. Weick: Fair enough. Charles Levine: And sorry was. Weick: Hazards and the. Charles Levine: Oh the only thing would be the milling of the hemp cake which is what we turn into protein powder and that’s all closed controlled systems with dust collectors so. Weick: Okay. Charles Levine: Yeah they’re all enclosed. Weick: And is there any type of water discharge as a result of the operation? Charles Levine: No this is all dry processing so the only use of water is for sanitation, cleaning of the equipment after we’re done using it so our water usage is quite minimal especially compared to what Gedney was doing. I think they were going through like a million gallons a week. Something like that. Weick: Okay. And then just anything you want to tell us about the operation and just kind of what you’re doing and. Charles Levine: Yeah so I brought a few samples. So this is hemp seed. You guys are welcomed to take a look at it but basically the industrial hemp plant is produces one of the most nutritious grains on the planet and through our process we take, it’s a very high oil content seed so we use a cold screw press. Use as really low temperatures to preserve all of the omegas in the oil and we take that through filtering and refining and then we bottle up our own retail, 12 foot ounce bottles all the way up to 55 gallon drums and 250 gallon totes and hopefully tankers as we expand. And so it has a really wide diverse range of applications. Everything from industrial lubricants to like nutripheuticals, cosmetics, salad dressings, hair products so that’s the oil. And then the cake is what is the by product of when you squeeze the oil from the seed which is rich in protein and fiber and so we take that, really similar to like a soy bean operation where we take that. Mill it. Pulverize it. Sift it and then we grade out certain different levels of protein which are food grade proteins that vegans, vegetarian plant based options. It’s like whey protein but all from seed. And then there’s also the de-hulling of the seed where you’re breaking off the outer shell which is the inner heart. That can go straight into bags. You can also take that and make milk out of it too. And you can take the whole seed and roast it. Add different flavors just like sunflower seeds so these are all the applications that we would be using with the hemp grain and contracting to start we’ll be doing 5,000 to 10,000 acres of local growers in the area to grow Chanhassen Planning Commission – July 7, 2020 8 industrial grain for us and bring it to us. Process and turn it into food and all sorts of different applications. Weick: Awesome. Can you, are you able to take some questions? I assume there might be some from the commission. I will kick it off and I’ll give people a chance to maybe collect their thoughts with a couple of questions, and I think you answered this but are you farming anywhere or no? Charles Levine: Yes. Weick: You are? Charles Levine: On our farm in Waconia. Weick: Okay. Charles Levine: We’ve set up, I’ve been growing since 2016 and I first got into this learning how to properly grow it and process it so we do, we also do CBD production on the farm and all of our cannabinoid production will stay on the farm. The grain side of the operations will be leaving the farm. Weick: And then you’ll also contract with other farmers? Charles Levine: Yes, yep. Yeah I won’t be supplying the grain for our process. Weick: Oh okay. Charles Levine: We’re looking to contract with a number of different farmers. Weick: Okay, got it. So that answers a couple questions there. And then do you do like aerate or, and I’m thinking more from like anything motorized like drying or aeration within your silos in order to keep that seed from mildewing or anything? Charles Levine: No, so that’s all done on the farm. Weick: Okay. Charles Levine: I would treat it just like any other commodity. Weick: Okay. Charles Levine: A farmer would harvest it. Put it in their bin. Dry it down to 9 percent moisture so we only accept grain at 9 percent. Chanhassen Planning Commission – July 7, 2020 9 Weick: Okay. Charles Levine: And then at that it’s stable. We don’t have to do any further drying and the rate at which we’re processing, we’re emptying one bin. Filling another bin. Emptying that bin and processing it so it never, it’s very rare that it’s sitting there stagnant. Weick: Okay, perfect. With that maybe I’ve given a chance for the commissioners to collect their thoughts and we’ll certainly open it up for questions at this time. Just go ahead and jump in if you have a question. Skistad: My question originally was on odors. Some of the staff mentioned that they did travel to look at the facilities and that that sounds like with only 9 percent moisture in there that really isn’t going to be an issue. Charles Levine: No. The odor portion of the process would come from like CBD production which is very similar to marijuana so that skunky aroma is really prevalent in those types of biomass processes but with the grain it’s really there’s no scent. No odor. No taste really. It’s a very bland product. You can smell that bag. It doesn’t really smell like anything. Skistad: Yeah. Thank you for bringing the samples in. Reeder: Mr. Chairman? Weick: Yes. Reeder: Is there a by product? Is everything you, is there anything left over after you… Charles Levine: Everything is used. Nothing goes to waste. Reeder: So there’s no? Charles Levine: No, in fact there. Reeder: Anything going to the dump. Charles Levine: No, no. In fact if the cake, if we can’t turn all of it into protein powder it’s an incredible source for livestock feed so any excess would be going to feed lots, yeah. Reeder: That’s pretty nice to be able to use it for other things. Chanhassen Planning Commission – July 7, 2020 10 Charles Levine: The only waste from the process is the filter aid which are minerals that we add to the oil to do the filtering and even that has been shown to have re-uses and applications either as like a fertilizer or feed. Reeder: And if you couldn’t find a place for that what would you do with it? Charles Levine: I would haul it to my farm and spread it on my field. As fertilizer. But mostly it’s, everything has an end use. Reeder: I did have a question earlier. Was there any other outside storage that you’ll need? You’re not asking for anything. Charles Levine: No. No not at this time. Just grain bins. Reeder: Okay. Maybe a question for staff. If we did have an odor problem how do we deal with that? Generous: If we discovered an odor problem we would work with the manufacturer to address that either through a filtration system, whatever. That’s where that, what our CUP is talking about. What are their plans for mitigating any odors in there so. And again we don’t anticipate that this processing would create anything that we would need to address. Reeder: It’s got to be better than pickles. Generous: Definitely. Weick: Thank you Commissioner Reeder. Any other questions for our applicant from any other commissioners in the Zoom meeting at this time? Von Oven: Commissioner Von Oven here. If we’re going to cover sight through the height of the silos and odor through the comparison to pickles we should probably cover sound so can you just make some comments on whether or not we would expect any greater noise in the area for the people that are living around? Is it all self contained within the building or is it literally just the sound of trucks coming in and out bringing hemp seed? Charles Levine: Yeah so the loudest piece of equipment would be our air handlers which would sit out by the bins and I provided Bob with noise data sheet from our equipment manufacturer. It’s about 90 decibels. We can enclose that in a little hut basically. Many farms do that. They have air handlers on their farm and they just build a shed around to, it will cut the sound down by half at least. So we can do that. We’ll probably do it anyway for our own peace of mind. Generous: That’s the information I found out too based on what they provided. They meet OSHA requirements but if they can cut it down and…says that I calculated that the noise level at Chanhassen Planning Commission – July 7, 2020 11 the property line should be about 66 decibels which is conversational so. Well right next to the equipment it would be about 85 to 90 decibels. That’s still within the guidelines so. Charles Levine: It’s a loud electric motor. A 75 horsepower motor so it draws some power but again very easily contained. Von Oven: Great, thank you. Weick: Thanks Commissioner Von Oven. Any other questions for our applicant at this time? Thank you everyone and hearing no questions, thank you for obliging us with, teaching us a little bit about your operation and what you’re going to do on the property. I think it’s a neat business so thank you. Charles Levine: Thank you. Weick: And thank you for showing us the samples as well. For those of you that weren’t in the room there’s samples of the cake and the seed and some of the oil final products that are sold. With that we will open the public hearing portion of tonight’s item. I don’t believe we received any email correspondence on this item. Generous: No. Weick: No. Anyone present in the chambers who would like to come forward and make a comment is free to do so at this time. Generous: We didn’t even receive a phone call on this one except for the City of Chaska. Weick: Okay fair enough. Seeing nobody come forward and having nobody on the phone lines, in front of you there Mr. Generous? Okay. I will close the public hearing portion of tonight’s item and open it for commissioner discussion. Comments. Motions. I will open the floor. While you might be collecting your thoughts I guess I will say that again that you know based on that this processing really has no, you know no leftovers to it really. They’re using everything that they can. A great opportunity I think. You know I don’t know a whole lot about the business but it certainly sounds like a strong business plan and certainly a market that is growing. I mean I think it’s nice to have someone using that location. That old location for a new purpose. And you know all the questions were answered. I think we talked about, potentially I was, Commissioner Von Oven I was also thinking when I was talking about like aeration or drying of those outside silos I was thinking like will there have to be motors or noise or things running so it doesn’t sound like that’s going to be an issue for us. So it certainly checks a lot of boxes for me. Other comments from commissioners? Reeder: Mr. Chair I do have one more question which I forgot to ask. Is Minnesota a great place to grow this stuff? I mean do you think you’ll have an ample supply? Chanhassen Planning Commission – July 7, 2020 12 Charles Levine: Absolutely. So little history of hemp. There was the largest hemp processing facility in the world was located in Hutchinson and if you talk to any old timers around here they’ll say oh yeah my dad grew hemp for the war. And you know back then there was, cannabis has a really interesting history but specifically for the war they re-legalized it. Subsidized it heavily and Hutchinson was the largest facility. It was called War Hemp Industries and farmers all across the state grew it and brought their hemp there and to another couple hemp mills in the state but now it’s 3M’s facility in Hutchinson. And so yeah I mean the history of hemp, the Declaration is written on hemp paper. The old 10 dollar bills that showed hemp. Yeah there’s a lot of history and it grows really well. Invite you to my farm. You can see how well it grows so yeah. Oh and one other thing I’d like to mention too. The stalks, that’s what you hear hemp is good for rope but that’s where it comes from is from the stalks and we have anticipations of later down the road to be developing processes for the fiber stalks to turn into batteries, concrete, plastics and composites. You can make batteries that are 20 percent more efficient than with the mien with hemp fiber. So it’s a totally different way of looking at agricultural crops. We can be growing batteries and houses and plastic so. Weick: That’s really cool, thank you. Thank you Commissioner Reeder. Other comments from you? Reeder: I’m done. Weick: Any other discussion for the meeting or I can certainly entertain a motion. Reeder: Mr. Chairman I would move that the Chanhassen Planning Commission recommends the City Council approve the Conditional Use Permit for food processing operation with outdoor storage for six 35 foot silos subject to the conditions of approval and adopts the Findings of Fact and Recommendation. Weick: Thank you Commissioner Reeder. We have a valid motion. Do we have a second? Randall: Second. Weick: We have a second from Commissioner Randall. Before we vote any final comments on the item? Hearing none we’ll go ahead and have a roll call vote. I’ll call your name and indicate either aye or nay. Reeder moved, Randall seconded that the Planning Commission approve the Conditional Use Permit to allow Hemp Acres to process food products from hemp seeds and allow the construction of six 35-foot tall silos based on the plans prepared by Phillip D. Johnson, Architect, dated April 4, 2020, subject to the following conditions: Chanhassen Planning Commission – July 7, 2020 13 Building: 1) A building permit will be required for unit improvements, silo installation, and unit remodeling. Engineering: 1) If an intensification or increase in use or an expansion is requested for the site, a traffic analysis will be required to determine the volume of traffic the new site will generate. 2) Any future intensification of the site usage shall investigate the use of the driveway access to Audubon Road. Natural Resources: 1) The applicant shall work with city staff to finalize a planting plan. 2) The applicant shall incorporate a landscape buffer along the north side of the building, which includes Autumn Blaze maple, Siouxland poplar, Black Hills spruce and Amur maples. 3) The front planting areas shall have wood mulch as a ground cover. 4) All proposed parking lot landscape islands and peninsulas shall comply with City Code. Planning: 1) When the site is redeveloped or the usage intensifies, the existing pickle tanks shall be removed from the property unless they are used as part of the building tenant operation. Water Resources: 1) Updated plans illustrating the total land disturbance activities associated with all site improvements shall be submitted for review and approval by the city. And adoption of the Findings of Fact and Recommendation. All voted in favor and the motion carried unanimously with a vote of 6 to 0. Weick: That motion carries unanimously 6-0. And we with that, thank you again to everybody for presentation. Staff as well as the applicant and good questions on behalf of the commissioners. I’m looking forward to seeing that business prosper for Chanhassen. PUBLIC HEARING: CONSIDER A REQUEST FOR A SETBACK VARIANCE AT 7701 FRONTIER TRAIL. Weick: MacKenzie.