City Council Worksession

South St. Paul WORKSESSION AGENDA SSP City Hall 125 3rd Avenue North Training room Monday, January 24, 2022 6:00 pm AGENDA: 1. Police Chief Interviews (90-120 Minutes) No attachment. 2. Danner Inc. PUD Concept Plan Review (Joint Worksession with the Planning Commission) 3. 770 North Concord Development Interest (Domingo Holdings LLC) 4. Public Works Staffing Concept No attachment. 5. CLOSED SESSION: Labor Negotiations and Compensation Study Implementation 6. Council Comments & Questions  CITY COUNCIL WORKSESSION REPORT A DATE: JANUARY 24, 2022 2 DEPARTMENT: Community Development-Planning Prepared By: Michael Healy, City Planner/Zoning Administrator ADMINISTRATOR: JRH AGENDA ITEM: Danner Inc. PUD Concept Plan Review (Joint Worksession) DESIRED OUTCOMES: • Review a concept plan for a PUD proposal to move Danner Inc. to Verderosa Avenue. • City Council and Planning Commission provide informal feedback to the Applicant. OVERVIEW: Background Danner Inc., the Applicant, is a trucking and road construction contractor located at 843 Hardman Avenue South. The company has been operating at this location since the late 1980’s but the property was originally much smaller than it is today. In 1995, the Applicant acquired an adjacent 23-acre piece of contaminated vacant land from the City with the understanding that they would engage in rock crushing, grading, and filling activities on the site and eventually bring it to a buildable state so it could be redeveloped for uses that would increase the City’s employment and property tax base significantly. Following that acquisition, the Applicant now owns roughly 33 acres of land at 843 Hardman Avenue. The 33-acre property is very close to being “shovel-ready” and has attracted a large amount of interest from developers. In 2016, there was an active proposal to turn the 33-acre site into an enormous facility for FedEx. The FedEx project ultimately did not move forward, due to factors outside of the Applicant’s control. Today, there is a different developer proposing to purchase the entire 33-acre property and turn it into a small industrial park. This is consistent with the 2040 Comprehensive Plan and is something that will add significant value to the tax base and bring new jobs to the community. Danner Inc. is a successful business with over 50 employees and they intend to keep operating in the area even if they do sell the 33-acre Hardman Avenue site for redevelopment. In 2016, when the FedEx project was still in development, Danner Inc. acquired a piece of highly contaminated property on Verderosa Avenue with the intention of relocating their business. This property had previously served as a dump and was essentially unbuildable due to the soil being full of construction waste, animal waste, and other buried garbage. The Applicant partnered with the City and with the Minnesota Department of Employment and Economic Development (DEED) and obtained a $1,565,526 grant to help clean up the site and make it suitable for development. Danner Inc. has also invested upwards of $1,200,000 of their own money – 35% more than the required match for the grant - in the cleanup. Danner Inc. would like to move their business operations to their Verderosa Avenue property. However, they do not believe that the property will suit their needs without a Planned Unit Development approval that allows them flexibility from several zoning regulations. City Council Worksession Report – Danner Inc. PUD Concept Plan Review January 24, 2022 Page 2 of 4 Zoning Status of Verderosa Avenue Property The Verderosa Avenue property is zoned I-1 Light Industrial. Additionally, it is located in two environmental overlay areas. The entire property is located in the Mississippi River Critical Corridor area and the eastern part of the property is located within the Shoreland overlay district. The Applicant’s proposed business could be allowed on the subject property, with the City Council’s approval: • The I-1district has strict architectural requirements for new buildings. Based on preliminary discussions, the proposed building should meet the requirements. • Office/warehouses are a permitted use in the I-1 district. • Exterior storage is allowed in the I-1 district but requires a Conditional Use Permit. The City can regulate the type of items that are stored outdoors, the height of those items, the location of those items, and the screening that is installed to hide items from public view. • The Applicant would like to have a fuel pump that they use for their own fleet vehicles and to sell fuel to fleet vehicles from other companies, something that they do today at 843 Hardman Avenue. For example, Danner Inc. has a contract with Amazon to refuel their delivery vehicles. The I-1 zoning district does not allow commercial gas stations (i.e. Kwik Trip or Speedway) but does allows “truck stops” with a conditional use permit. Retail fuel sales could be allowed if the City Council is willing to treat the fleet vehicle retail sales as a limited “truck stop” use which could be regulated via a Conditional Use Permit. The City did approve a partial plan for Danner Inc. to move to Verderosa Avenue in 2016. However, the 2016 plan had a lot of missing pieces and there were major zoning, subdivision, and engineering issues that needed to be resolved. The City Council was not willing to grant a Conditional Use Permit for exterior storage in 2016 because of all of the unresolved issues. The Applicant did not move forward with the relocation and all of the 2016 approvals have expired. Challenges in Developing the Verderosa Avenue Property Development of the Verderosa Avenue property includes a number of challenges: 1. The property is “messy” in that it is not platted and consists of several different parcels. The parcels are unusually shaped and include noncontiguous pieces of land and public road easements. Any redevelopment of the property will need to include a plat that turns the land into clearly defined buildable lots, unbuildable outlots, and road right-of-way. 2. The eastern part of the site is encumbered by a number of easements including a billboard easement, a City sewer line easement, and an Xcel Energy easement for large overhead power lines which cross the Mississippi River east of the subject property. When combined, these easements effectively prevent the far eastern part of the site from being buildable. City Council Worksession Report – Danner Inc. PUD Concept Plan Review January 24, 2022 Page 3 of 4 3. As previously stated, the entire property was once a dump. Danner Inc. has worked for years and invested significant resources to clean up the western portion of the site to create a useable building pad. The eastern portion of the site is being actively remediated (at Danner’s expense, without grant resources) in conformance with a Response Action Plan (RAP) as approved by the Minnesota Pollution Control Agency. While these cleanup actions will not be as extensive as those on the western portion, the RAP provides that safe separation distances between any remaining subsurface contamination in the eastern half of the site and final grade will be met or exceeded. Upon completion in May 2022, more than 85,000 cubic yards/120,000 tons of contaminated waste will have been excavated from the property and disposed of at a licensed and regulated contaminated waste facility. 4. The property is only about 300 feet deep which is not ideal for a contractor’s operation. The shallowness of the property makes it more challenging to develop a site plan for a business operation that needs a significant amount of outdoor storage and also needs to accommodate the turning movements of large trucks. The Applicant is proposing to address stormwater issues by building a large pond and this further complicates site design. 5. There are overhead power lines located just a few feet from the curb on the north end of the property along Verderosa Avenue. These power lines are an obstacle in planning for sidewalks and/or landscaping trees along Verderosa Avenue. 6. Engineering requirements for stormwater management are going to be fairly complex for this property due to its proximity to the Mississippi River and the fact that the soil has a history of contamination which affects how stormwater facilities can be designed. Why does This Project Need to be a Planned Unit Development? The Applicant does not believe that they can successfully relocate to their Verderosa Avenue property without a PUD approval that includes four (4) types of zoning flexibility: 1. FAR Requirement. The City Code requires new development in the I-1 zoning district to have a minimum Floor Area Ratio (FAR) of 0.2. Generally, this means that at least 20% of a buildable lot must be covered in buildings. o Danner Inc. only requires a 17,172 square foot building for their operation. They consider any additional building size beyond that to be unnecessary space that will not benefit their business in any way. o Once it is platted, the property will have 6.114 acres of useable area (this does not count the easement areas which are essentially unusable by the Applicant). As proposed, the project would have an adjusted FAR of .0644. Only 6.44% of the property will be covered in buildings. o Back in 2016, the City pushed very hard for splitting up the Verderosa property into multiple development lots in order for the project to meet FAR requirements. ▪ Realistically, it does not appear that the eastern portion of the site can be its own development lot due to the location of easements. City Council Worksession Report – Danner Inc. PUD Concept Plan Review January 24, 2022 Page 4 of 4 ▪ The Applicant is not willing to split the property and any requirement that the lot be split is a “deal-breaker.” They need the entire eastern part of the site for exterior storage in order to successfully operate their business. 2. Front Yard Setback Requirements. The City Code requires a 20-foot setback from front property lines for parking lots and at least a 40-foot setback from front property lines for exterior storage. Per the Code, exterior storage cannot be in “required front yards” and corner lots in industrial districts have two front yards, one along each street. o Due to the shallowness of the lot, the Applicant has stated that they cannot meet this setback requirement along Verderosa Avenue and still have enough room on the site for stormwater ponding, exterior storage, and the turning movements of their large trucks. o The intent of the setback requirement is to beautify the streetscape. The Applicant is proposing to meet the “spirit of the ordinance” by doing the following: ▪ The property will come very close to meeting the front setback requirement along the east property line. ▪ Along the north property line, they are proposing a 7-foot setback from the property line (this equates to roughly a 20-foot setback from the curbline). ▪ They will construct a 6-foot tall vinyl privacy fence around the entire exterior storage area. This fence will be set back 5-feet from the north property line along Verderosa Avenue. ▪ On the outside of the privacy fence along Verderosa Avenue will be a 5- foot wide mulched and landscaped area with shrubbery. 3. Impervious Surface Regulations. Lots within 300 feet of the Mississippi River are in the Shoreland area and cannot have more than 30% coverage by impervious surfaces. o Technically, the 30% rule applies to the entire lot and not just to the portion of the lot that is within the Shoreland area. This is due to the way that the ordinance has been written and it could be argued that this is a flaw in the ordinance. o The Applicant has carefully designed their project so that only 30% of the part of their development site that is within the Shoreland area is impervious. However, much more than 30% of the entire lot will be impervious. o The Applicant is clearly meeting the “spirit” of the Shoreland ordinance but not the letter of the law. This is acceptable but only through a PUD approval. 4. Landscaped Parking Lot Islands. Parking lots over 3,000 square feet in size must have at least one (1) 200 square foot planting island for each additional 3,000 square feet of total parking lot size. This requirement only applies to parking lots and not to storage areas. City Council Worksession Report – Danner Inc. PUD Concept Plan Review January 24, 2022 Page 5 of 4 o The Applicant has stated that this requirement will undermine their site layout. o This is largely an aesthetics-oriented requirement and it has frequently been waived for industrial developments in the past. How is the Applicant Justifying the PUD Request? Planned Unit Developments are reviewed holistically and the City Council is asked to determine whether the overall development is good for the community. They must find that the development is consistent with the comprehensive plan and aligned with the intent of the City Code. It is typical for a developer requesting zoning flexibility in some areas to go “above and beyond” in other areas to justify the overall PUD approval. The Applicant is justifying the PUD request in three ways: 1. They are asking that the City reflect on the nature of the site, both its history as a contaminated dump and its current challenges. The Applicant asks that the City Council acknowledge that there are some legitimate practical difficulties present at this site and that the PUD approval can be at least partially justified using the practical difficulty rationale, just as the City would do for a variance request. 2. The Applicant is proposing to exceed the “minimum number of trees” requirement for the I-1 zoning district. They are proposing to plant a large number of trees along Interstate 494. Over time, this will soften the visual impact of the exterior storage when viewed from the highway. 3. The 2040 Comprehensive Plan explicitly calls for a sidewalk or trail to be built along Verderosa Avenue to connect the Bridgepoint Industrial Park with the Wakota Bridge’s bicycle/pedestrian trail and the DNR Boat Launch Park. If the City Council still supports making this connection, the Applicant is willing to pay for and construct the entire missing sidewalk segment along Verderosa Avenue. This would be a roughly 1,700-foot- long sidewalk. a. The intent of this connection to is support bicycle commuting to jobs in the industrial park and to better connect SSP residents and workers with the DNR Boat Launch Park and the Wakota Bridge trail across the Mississippi River. b. The City Engineer has noted that this will be a difficult sidewalk to design due to the location of power poles on the south side of Verderosa and the location of a buried Metropolitan Council sewer line along the north side of Verderosa. c. The Applicant is proposing to build the sidewalk on the north side of Verderosa, across the street from the subject property. The sidewalk would then cross to the south side of Verderosa at the eastern end of the subject property and would connect there with the Wakota Bridge trail. Feedback Sought from the Planning Commission and City Council The Applicant and City Staff are seeking the following feedback from the Planning Commission and the City Council: 1. How do you feel about the four elements of PUD flexibility that are being requested? 2. How do you feel about the screening proposal? Is the proposed 6-foot vinyl fence with landscaping sufficient screening along Verderosa? The maximum allowed height for fences in the I-1 district is 8 feet. 3. Is the sidewalk/trail connection along Verderosa Avenue that is called for in the 2040 Comprehensive Plan important enough to work through the engineering challenges? What are your thoughts on the proposal to place this sidewalk on the north side of Verderosa, across the street from the development site? 4. At this time, do you see any red flags or deal breakers that would cause you to consider voting against this PUD proposal? If so, what can the Applicant do to address those concerns? Regardless of how comfortable City leaders are with the zoning aspects of the project, the final design of the site is subject to change due to stormwater requirements and some conflicts with the City’s sewer easement and the eastern edge of the proposed exterior storage area that is shown on the concept plan (See Attachment I for full City Engineer’s comments). Additionally, there will need to be some revisions to the landscaping plan due to on conflicts between proposed tree locations and existing utilities. ACTION NEEDED The Planning Commission and the City Council are asked to give informal feedback on the Applicant’s concept plan. The City Council is NEVER obligated to approve a PUD or offer any flexibility from zoning requirements. If City leaders are supportive of the project, the Applicant plans to move forward with preparing formal architectural and civil plans based on the concept plan. The project will be reviewed by the Planning Commission and the City Council at their regular meetings once a complete application has been received. ATTACHMENTS A- DANNER INC.’S PROPERTY AT 843 HARDMAN AVENUE SOUTH B- PROPOSED DEVELOPMENT SITE ON VERDEROSA AVENUE C- PHOTOGRAPHS OF PROPOSED DEVELOPMENT SITE D- AERIAL MAP SHOWING PROPOSED SIDEWALK CONNECTION E- 2040 COMPREHENSIVE PLAN EXCERPTS SUPPORTING SIDEWALK CONNECTION F- APPLICANT’S CONCEPT PLAN G- APPLICANT’S CONCEPT LANDSCAPING PLAN H- APPLICANT’S NARRATIVE I- CITY ENGINEER’S COMMENTS  ATTACHMENT A DANNER INC.’S PROPERTY AT 843 HARDMAN AVENUE SOUTH  ATTACHMENT B PROPOSED DEVELOPMENT SITE ON VERDEROSA AVENUE  ATTACHMENT C PHOTOGRAPHS OF PROPOSED DEVELOPMENT SITE View of Site Along Verderosa Avenue Looking East Towards the River View of Site Along Verderosa Avenue Looking West Away from the River City Council Worksession Report – Danner Inc. PUD Concept Plan Review January 24, 2022 Page 10 of 4 View from the Existing Dead-End of the Wakota Bridge Pedestrian Trail Looking North View from the Interstate 494 Exit Lane Nearest the Subject Property  ATTACHMENT D AERIAL MAP SHOWING PROPOSED SIDEWALK CONNECTION  ATTACHMENT E 2040 COMPREHENSIVE PLAN EXCERPTS SUPPORTING PROPOSED SIDEWALK CONNECTION Excerpt from Page 7-181 of the Transportation Chapter of the 2040 Comprehensive Plan: Map from page 7-179 of the Transportation Chapter of the 2040 Comprehensive Plan Showing Verderosa Avenue’s inclusion in the regional ped/bike plan network: Map from page 7-183 of the Transportation Chapter of the 2040 Comprehensive Plan Identifying Verderosa Avenue as a Sidewalk Gap That Needs to be Filled:  ATTACHMENT F APPLICANT’S CONCEPT PLAN (4 PAGES) NOTE: The concept plan submittal only shows a 2-foot wide landscaped area with bushes outside of the vinyl privacy fence. Following conversations with City Staff, the Applicant is now proposing to revise this to be a 5-foot wide landscaped area.  INSET A I-1 PROPOSED 00-ENG-116198-SHEET-SITE CIVIL ENGINEERS LAND PLANNERS LAND SURVEYORS LANDSCAPE ARCHITECTS 2422 Enterprise Drive (651) 681-1914 I hereby certify that this plan was prepared by Name Revisions Date 01-07-2022 DANNER INC. DANNER OFFICE ADDITION Mendota Heights, MN 55120 Fax: 681-9488 www.pioneereng.com me or under my direct supervision and that I am a duly Licensed Professional Engineer Brian N. Molinaro 1. XX-XX-XX City Coments Designed NAP PRELIMINARY SITE PLAN 843 HARDMAN AVE. S. SOUTH ST. PAUL, MINNESOTA 4.10 OF 4 under the laws of the State of Minnesota Reg. No. 47504 Date 01-07-2022 Drawn PDS SOUTH ST. PAUL, MINNESOTA 55075 c 2022 Pioneer Engineering, P.A.  PROPOSED SITE REQUIREMENTS I-1 ZONING 00-ENG-116198-SHEET-SITE-AREA 4.20 CIVIL ENGINEERS LAND PLANNERS LAND SURVEYORS LANDSCAPE ARCHITECTS 2422 Enterprise Drive (651) 681-1914 I hereby certify that this plan was prepared by Name Revisions Date 01-07-2022 PRELIMINARY SITE PLAN AREA DANNER INC. DANNER OFFICE ADDITION Fax: 681-9488 me or under my direct supervision and that I Brian N. Molinaro 1. XX-XX-XX City Coments Designed NAP 843 HARDMAN AVE. S. 4.20 OF 4 Mendota Heights, MN 55120 www.pioneereng.com am a duly Licensed Professional Engineer under the laws of the State of Minnesota Reg. No. 47504 Date 01-07-2022 Drawn PDS CALCULATIONS SOUTH ST. PAUL, MINNESOTA 55075 SOUTH ST. PAUL, MINNESOTA c 2022 Pioneer Engineering, P.A.  REQUIREMENTS I-1 ZONING PROPOSED SITE 00-ENG-116198-SHEET-SITE-AREA 4.21 CIVIL ENGINEERS LAND PLANNERS LAND SURVEYORS LANDSCAPE ARCHITECTS 2422 Enterprise Drive (651) 681-1914 I hereby certify that this plan was prepared by Name Revisions Date 01-07-2022 PRELIMINARY SITE PLAN AREA DANNER INC. DANNER OFFICE ADDITION Fax: 681-9488 me or under my direct supervision and that I Brian N. Molinaro 1. XX-XX-XX City Coments Designed NAP 843 HARDMAN AVE. S. 4.21 OF 4 Mendota Heights, MN 55120 www.pioneereng.com am a duly Licensed Professional Engineer under the laws of the State of Minnesota Reg. No. 47504 Date 01-07-2022 Drawn PDS CALCULATIONS SOUTH ST. PAUL, MINNESOTA 55075 SOUTH ST. PAUL, MINNESOTA c 2022 Pioneer Engineering, P.A.  REQUIREMENTS I-1 ZONING PROPOSED SITE 00-ENG-116198-SHEET-SITE-AREA 4.22 CIVIL ENGINEERS LAND PLANNERS LAND SURVEYORS LANDSCAPE ARCHITECTS 2422 Enterprise Drive (651) 681-1914 I hereby certify that this plan was prepared by Name Revisions Date 01-07-2022 PRELIMINARY SITE PLAN AREA DANNER INC. DANNER OFFICE ADDITION Fax: 681-9488 me or under my direct supervision and that I Brian N. Molinaro 1. XX-XX-XX City Coments Designed NAP 843 HARDMAN AVE. S. 4.22 OF 4 Mendota Heights, MN 55120 www.pioneereng.com am a duly Licensed Professional Engineer under the laws of the State of Minnesota Reg. No. 47504 Date 01-07-2022 Drawn PDS CALCULATIONS SOUTH ST. PAUL, MINNESOTA 55075 SOUTH ST. PAUL, MINNESOTA c 2022 Pioneer Engineering, P.A.  ATTACHMENT G APPLICANT’S CONCEPT LANDSCAPING PLAN  00-PLAN-116198-SHEET-LAND.DWG CIVIL ENGINEERS LAND PLANNERS LAND SURVEYORS LANDSCAPE ARCHITECTS 2422 Enterprise Drive (651) 681-1914 I hereby certify that this plan was prepared by Name Revisions Date 1-7-22 DANNER INC. DANNER OFFICE ADDITION Mendota Heights, MN 55120 Fax: 681-9488 www.pioneereng.com me or under my direct supervision and that I am a duly Licensed Landscape Architect Jennifer L. Thompson 1. XX-XX-XX City Coments Designed TLM/JLT LANDSCAPE PLAN 843 HARDMAN AVE. S. L1 OF 1 under the laws of the State of Minnesota Reg. No. 44763 Date Drawn TLM/JLT SOUTH ST. PAUL, MINNESOTA 55075 SOUTH ST. PAUL, MINNESOTA c 2022 Pioneer Engineering, P.A.  ATTACHMENT H APPLICANT’S NARRATIVE  ATTACHMENT I CITY ENGINEER’S COMMENTS A COUNCIL WORK SESSION REPORT DATE: JANUARY 24, 2022 3 DEPARTMENT: ECONOMIC & COMMUNITY DEVELOPMENT PREPARED BY: Ryan Garcia ADMINISTRATOR: JRH AGENDA ITEM: 770 North Concord Development Interest (Domingo Holdings LLC) DESIRED MEETING OUTCOMES: We’re looking for the EDA to discuss and form consensus around the following topics: • Is there EDA support for the proposed use at the property? • If so, is the EDA supportive of staff negotiating a development agreement? Overview: Staff has been approached by a small business owner, Domingo Contreras, who is interested in developing an approximately 10,000 square foot commercial building on the east side of Concord Street North, on EDA-owned vacant property located at 770 Concord Street North (just north of Fury Outlet/Motorcycle). The developer is seeking EDA feedback and response to their concept, which proposes that the commercial building would be occupied by the businesses that he and his family currently own and operate in St. Paul. At this very early stage, the developer has not prepared any sketches or plans for the physical development of the site, but they are aware of and comfortable with the City’s MMM-4 Zoning Requirements. Given that this would be the first new development along North Concord in quite some time, and the first new development to proceed under the newly adopted zoning ordinance for this area, we do not want to advance the concept any further without receiving guidance and feedback from the EDA. Background of the Development Site: The EDA-owned property totals approximately 0.56 Acres and is situated on the east side of Concord Street North at Waterous Street, between Fury Outlet/Motorcycle and Rauchwater Excavating. The property was acquired by the Housing and Redevelopment Authority of South St. Paul (HRA) approximately twenty years ago, as we understand it for the purposes of blight elimination and long-term land banking. From the early 1930s through the time the HRA acquired the property in 2003, it appears that the property consisted of at least one commercial structure until demolition in 2003 by the HRA. The last known business to occupy the site was the “Tire Market”, in operation as an automotive service business from at least the early 1970s through early 2000s. The HRA does not appear to have conducted any site due diligence, with the exception of a boundary survey, prior to its acquisition. The property has remained vacant since the HRA’s acquisition and has been zoned mixed-use since the HRA acquired it and was just rezoned “Mixed Makers and Markets – Subdistrict 4” recently. The MMM-4 District permits general retail and general service businesses by right, so fundamentally the discretion is upon the EDA as to whether sale of the property at this time for the proposed (conforming) use is desirable, or whether continuing to hold the land (for possible future assembly with adjacent parcels, or for a different use) is preferred. About the Proposed Development and the Developer: Although quite preliminary, the developer proposes development of the site to a multi-tenant commercial building to house two distinct but related business entities operated by the developer and his family: DM&P Equipment and Supplies, Inc. and Zuber, Inc., which are business-to- business service entities in the commercial food industry. The proposed building would house offices, “showroom”/sales area, a kitchen (DM&P crafts, packages, and brands spices and marinades for sale to the public and the food industry), an inventory area, and shop space for very light assembly (basically putting together from “kit” the Zuber line of products). The developer is drawn to the South St. Paul location’s centrality to their customer base, some personal/family ties, and a general appreciation of the community’s personality and “pro- business” attitude. Mr. Contreras and possibly his lending partner, John Bennett with 21st Century Bank, plan to attend Monday’s meeting and will be prepared to share more about their proposal and the businesses. Potential Next Steps: Mr. Contreras has offered to purchase the EDA property for $85,000. If the EDA’s consensus is that the proposed development is in the community’s and the EDA’s best interest, Staff will work with the developer to proceed to a formal purchase and development agreement, proceed with due diligence and work through the City’s review process. Attachments: Orientation Map