CR 99-121 Rezoning- Alliant Tech Parking Lot
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CITY Or:
July 15, 1999 ~<I>~ Council Report 99-121
HOPKINS
0 REZONING-ALLIANT TECH PARKING LOT
ProDosed Action.
Staff recommends the following motion: Move to approve Resolution 99-57. approving
Ordinance 99-827 for first reading for the rezoning of the former Alliant Tech parking lot
from R-I-C to R-I-A, PUD (Beard Group).
At the Zoning and Planning meeting, Ms. Boen moved and Ms. Swanson seconded a motion
to approve Resolution RZ99-8, recommending approval of Ordinance 99-827 to rezone the
former Alliant Tech parking lot from R-I-C to R-I-A, PUD. The motion carried on a 6-1
vote, Mr. Engel voting nay.
Overview.
The applicant, The Beard Group, is proposing to construct single family homes on the
parking lot that was previously owned by Alliant Tech. The site is approximately 9.5 acres.
The Planning Commission approved a development of 61 homes. Since the meeting, the
applicant has revised the site plan to construct 58 homes. The development as proposed
consists of 58 single-family homes. The price range will be approximately $150,000 to
0 $200,000.
The plat will have 58 lots that vary in size because of the PUD zoning.
Primarv Issues to Consider.
0 How has the Comprehensive Plan designated the subject site?
0 What is the difference between the R-I-C and R-I-A, PUD zoning?
0 Should the site be rezoned to R-I-A, PUD?
0 What was the discussion at the Zoning and Planning meeting?
SUDDortine: Documents.
0 Analysis of Issues
0 Location Map
0 Narrative from Applicant
0 Letter from Ryland Homes
0 Letter from Ehlers/Publicorp Inc.
0 Resolution 99-57
0 Ordinance 99-827
0 Nancy . f\nderson, AICP
Planner
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CR99-121
Page 2
0 Primarv Issues to Consider.
How has the Comprehensive Plan designated the subject site?
The Comprehensive Plan has designated the site as Low Density Residential. The proposed
zoning and the Comprehensive Plan designation are consistent.
0 What is the difference between the R-I-C and R-I-A, PUD zoning?
The R-I-C zoning requires a minimum lot size of 12,000 square feet and a minimum lot
width of 80 feet. The R-I-A, PUD zoning does not have a minimum lot size. The PUD
zoning allows flexibility in the zoning requirements. The site with the R-I-C zoning could
have approximately 30 homes, and with the R-I-A, PUD zoning the applicant is proposing
58 homes.
0 Should the site be rezoned to R-I-A, PUD?
When A1liant Tech decided to sell this site, of the calls staff received, most were inquiring
for the development of an industrial or multiple-family project. There was a concept review
last year for a multiple-family development. Staff has confirmed the desire for a single-
0 family development with the Zoning and Planning Commission and City Council and told all
developers inquiring about the site desired single-family development. Staff has worked
with the applicant to get a single-family development on this site. The R-I-C zoning has a
larger lot size, and that may not be the appropriate single-family zoning for this site. The
abutting lots on Tyler are zoned R-I-C, but they are narrow and long, the width being similar
to the R-I-A zoning. The PUD designation allows more flexibility in the zoning
requirements.
0 What was the discussion at the Zoning and Planning meeting?
Staff reviewed the proposal for 48 single-family units with the Commission. Bill Beard, the
applicant, appeared before the Commission. Mr. Beard reviewed the history of the site and
reason they submitted a proposal for 48 units. After a neighborhood meeting last Thursday,
the neighborhood indicated that they would rather have a homeowners association. Mr.
Beard presented a development for 61 units that would have a homeowners association. A
61-unit development would have a zoning ofR-l-A, PUD. Mr. Beard stated that they need a
certain threshold of units to have a homeowners association, and the 48-unit proposal does
not meet that threshold.
At the public hearing one neighbor spoke against the development and three others stated
they would rather have a homeowners association.
There was considerable discussion on the 48-unit development vs. the 61-unit development.
0
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CR99-121
Page 3
0 Alternatives.
I. Approve the rezoning. By approving the rezoning, the site will be rezoned from R-I-C to
R-I-A, PUD. This alternative will approve the 58-unit development with a homeowners
association.
2. Approve the rezoning from R-I-C to R-I-A. By approving the rezoning, the site will be rJ.? 'J-?
rezoned from R-I-C to R-I-A. This alternative will allow the 48-unit development. The '0\)\
applicant bas agreed to sign a development agreement with this zoning and most oz;
conditions for approval of the 58-unit development would apply to this rezoning.
3. Deny the rezoning. By denying the rezoning, the site will not be rezoned from R-I-C to
R-I-A, PUD and the proposed development will not be able to be constructed as
proposed. If the City Council considers this alternative, findings will have to be
identified that support this alternative.
4. Continue for further information. If the City Council indicates that further information is
needed, the item should be continued. If this item were continued, the applicant would
have to agree to this. State statute requires zoning applications to be approved within 60
days; the August 3, Council meeting would exceed the 60 days.
0
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0 ' July 15, 1999 @t)5t0
I N C
Ms. Nancy S. Anderson
Planner, City of Hopkins
1010 First Street South
Hopkins, MN 55343
RE: Redevelopment of the Former Alliant Tech Parking Lot
Dear Nancy:
This letter is intended to follow-up on our recent meeting regarding the above referenced project.
As we discussed at our meeting it appeared that the Council's questions regarding why an
association is viable for a 58-home development but not viable for a 48-unit home development
were not adequately explained at the July 6, 1999 City Council meeting. I believe in part the
reason for the incomplete explanation stems from the fact that I was, in adequately, trying to
answer a question that Ryland Homes should answer. As you know the Beard Group's role is
that of the site developer responsible for the master planning, plan approval and installation of the
infrastructure (roads, utilities, grading). Ryland Homes will be acquiring finished lots,
constructing and marketing the homes and in the case of the 58-home plan creating and forming
the association. What we had was a situation where the site developer was trying to answer for
the builder and frankly not doing a good job. Enclosed is a copy a letter from Wayne Soojian,
0 Division President of Ryland Homes, detailing the multiple reasons why, in this particular
instance, an association is viable for a 58-home development but not for a 48-home development.
I have also asked Mr. Soojian to be present at the July 20th Council meeting to answer any
additional questions.
I believe it is also important for the Council to know that we are pleased to proceed forward with
either the 48-home R-I-A plan without an association or the 58-home R-I-A PUD plan with an
association. Our agreements with our lender and Ryland Homes do not permit us to move
forward with any other plan.
Sincerely,
cf5~d~
William H. Beard
President
WHB\
Enclosures: Ryland Homes Letter
Development History
0 10 - 11th Avenue South Hopkins, MN 55343 (612) 930-0630 Fax (612) 930-0631
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0 Alliant Tech Parking Lot Development Plan History
As you know Paul Gamst and I purchased the 9.54 acre parking lot that abuts Oakes Park
and is referred to as "the Alliant Tech" parking lot. Following is a brief history of the
concept development proposals that we have been working on for the property.
Townhomes. The first concept proposal for development consisted of a 76-unit town
home development. We reviewed this proposal, in work sessions, with: the Planning
Commission, City Council and the neighborhood. The consen[)us of opinion coming
from these meetings was that the Townhome project wasn't consistent with the City's
goal to increase the number of single family homes and that the number of homes exceed
the neighborhood's and the City's comfort levels.
63 Sinele Homes with Association and open common space. Based upon the
feedback from the Townhome meetings we prepared a concept plan that included 63-
single family homes, common open space, extensive landscaping, private streets and an a
homeowners association. The homeowners association would in addition to enforcing
the covenants and restrictions placed upon the individual homeowner would also provide
for the care and upkeep of the common areas, snowplowing, street lights, and refuse
removal. For these services the individual homeowner would pay a monthly fee. This
plan was submitted for concept review to the Planning Commission and City Council. It
was our impression that the consensus opinion of both bodies was: single family homes
0 felt right and was consistent with the City's housing goals, the traditional grid alignment
of homes and streets lacked interest, and 63 homes still seemed too dense.
61 Sin~le Homes with Association and open common space. Following the 63-
Single Family Home concept review meetings we immediately began to prepare a plan
that we felt was responsive to what we believed was the consensus opinion of the
Planning Commission, City Council and the Neighbors that attended the meetings. The
result was that we prepared a concept plan that had 61-Single Family Homes, moved
away from the traditional grid alignment of homes and streets but still incorporated the
neighborhood association, private streets, extensive landscaping, common open space and
private services.
As the 61 home plan was developing we exposed the plan to staff Staff's comments
were that the reduction from 63 to 61 homes wasn't a significant enough reduction in the
project's density and that a 61 home plan might be viewed as being unresponsive and
risked not being approved. We explained to staff that the association, private streets,
uniform covenants and restrictions, open space and extensive landscaping were critical
elements to the plan and that even with 61 homes the project was just on the cusp where a
further reduction in the number of homes would make the cost of the association
economically unfeasible. Staff believed that the consensus opinion of the Planning
Commission and Council was that the reduction in density was more important than the
association. With this information we abandoned any further development of the 61-
0 Single Family Home plan and the commitment to an association, uniform covenants and
History Page 1
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0 restrictions, private streets, extensive landscaping, common open space and private
services.
48 Sinele Familv Home Plan that conforms to R-I-A standards. Further
consultation with staff lead us to believe that the appropriate approach would be to use
the R-1-A zoning requirements as the basis for development. The development plan
would then reflect the lot size and street alignment of much of Hopkins. The 48-Single
Family Home Plan not have an association as the number of homes are to few in number
to economically support an association. Each homeowner would have all the rights and
restrictions of any other homeowner.
Staff encouraged us to expose the plan to the neighborhood and a neighborhood meeting
was scheduled for June 24, 1999. At the neighborhood meeting the majority ofthe
residents present indicated that their preference was for a plan that included an
association. Their reasoning was that the development plans that included an association
provided open space, extensive landscaping and greater assurance that the entire
development would be maintained in an attractive manner. Their consensus opinion was
that if it took an increase in density to support an association it was worth it. Given the
neighborhood's position we let them know that if the neighborhood would support the 61
Single Family Home Plan with association we would work with staff to put the 61 Home
Plan before the Planning Commission and Council as an option and that we would in turn
support the 61 Home Plan as the preferred alternative.
0 The neighbors present decided to hold an additional neighborhood meeting on June 27,
1999 with out our presence to engage the entire neighborhood and seek a consensus on
which plan to support. This meeting was held and the 61-home plan, with an association,
was the preferred alternative.
58 Sinele Familv Home Plan. R-I-A pun. The current plan before you is for a 58-
single family home development. The development plan moved away from the traditional
grid alignment of homes and streets but still incorporated the neighborhood association,
private streets, extensive landscaping, common open space and private services. The 58
home plan is a revision of the 61 home plan that was never fully developed or presented.
0
History Page 2
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R\f~[QJ
~10MES
0
7900 West 78th Street
Suite 100
Edina, MN 55439
July 15, 1999 (612) 944-7701 Tel
(612) 944-7709 Fax
Mr. Bill Beard
Beard Group Inc.
10 Eleventh Avenue South
Hopkins, Minnesota 55343
RE: Alliant Tech site
Dear Bill,
Pursuant to our recent conversation regarding the above referenced development, this
letter will outline Ryland's concerns about downsizing the project. As I stated earlier,
Ryland is committed to the Alliant Tech site in the event either scenario is approved.
0 Ryland has supported the detached association concept throughout the approval process
and remains in favor of that option. We believe that a density of six to eight dwelling
units per acre is an appropriate use of the property which will act as a transition area
between the existing single family homes to the west and the higher density residential
developments and light manufacturing! distribution facilities to the east and south.
The concept of downsizing our initial proposal to 48 lots is also one that Ryland will
accept although clearly, the 48 lot design creates a series of marketing hurdles which
will change Ryland's approach to the project. Specifically, larger lots will be more
costly and therefore will result in a higher average sales price. Earlier in the process,
Ryland retained the services of Conhaim Associates, a Twin Cities market research firm
which specializes in residential new construction. The Conhaim report states the
"product should be base priced in the $140,000 to $170,000 range in order to reach the
site's maximum sales velocity potentia1." Under the 58 unit design, Ryland anticipates
being within these price parameters with our product offerings. The 48 lot design will
increase the average sales price by $10,000 to $15,000 due to increased land costs and
product modifications. While in theory Ryland can utilize the same product under
both scenario's, this is not practical from a marketing standpoint due to the difference
in lot size. The proposed product has been designed specifically for 'cluster' style
communities and will not command the same curb appeal when placed on larger lots.
Subsequently, a larger and more costly product line would need to be introduced which
will impact overall sales prices.
0
Contractor's License #20035443
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-2- July 15, 1999
0
This anticipated increase in average sales price resulting from reducing the overall
project density will slow the community's sales velocity by requiring Ryland to market
to an alternate buyer profile. This is the core issue when evaluating the viability of a
Home Owners Association for the 48 lot design. Ryland believes that the increased
sales price and accompanying product design change as well as the lot size change will
appeal to a different buyer profile. Ryland expects this buyer to desire more personal
control over their home site. In fact, the 48 lot design is very similar in spatial design to
the existing single family home sites along Tyler Avenue and Ryland expects it's
potential buyers under the 48 lot scenario to be similar in profile to the residents along
Tyler Avenue. Clearly these residents require more personal control as evidenced by
the proliferation of ancillary items such as satellite dishes, out buildings, lawn
ornaments, fences, etc. The covenants and restrictions stipulated by a HOA would not
allow these 'uses' to occur and subsequently, they would act as an additional burden to
Ryland. These burdens, combined with the additional monthly costs of an HOA will
significantly increase the risk associated with the Alliant Tech proposal. This is the
reason for Ryland's decision not to be involved in the community should a HOA be
0 required along with the 48 unit design.
In conclusion, Ryland is committed to the Alliant Tech site under either the S8 or 48
unit scenario however, in the event the City of Hopkins selects the 48 unit plan, Ryland
does not believe a HOA to be a viable option for the community. Hopefully, the
information contained in this letter will explain the rational used by Ryland to arrive at
this decision. For your use and information, I have enclosed a copy of Conhaim
Associates' market study. If you have any additional needs or questions, do not hesitate
to call.
Very Truly Yours,
uJ~----
Wayne J. Soojian
Division President
Ryland Homes Twin Cities
Enc.
0
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JUL 15 '99 09:27AM EHLERS & ASSOCIATES P.2/4
.
0 MJEMOlRAND1UM
~ I
TO: Jim Kerrigan - City of Hopkins
FROM: Sid Inman - Ehlers/Publicorp Inc.
DATE: July 15, 1999
RE: Housing Analysis - Single Family Housing Project, Beard Group (Alliant Tech
parking lot)
As per your request, I have prepared an analysis for the following three alternatives:
1. 58-unit project with a homeowners association
2. 48-unit project without a homeowners association
3. 48-unit project with a homeowners association
Alternative 1 assumes there is an average home sale price of $150,000. The total association fee
is projected at $41,760, resulting in a monthly fee of $60. The total monthly cost to a buyer under
this alternative would be $1,108.82 (principal, interest, and association fee).
0 Alternative 2 also assumes an average sale price of $150,000 and an association fee of $41,760.
The developer has stated that for the most part the cost of implementing the association (snow
removal, lawn maintenance, etc) is a fixed expense, and that any reduction in units does not reduce
the overall cost; therefore, with ten less units, the monthly association fee per unit is increased to
$72.50.
The developer has also stated that the cost of acquiring the subject property and site preparation
is a fixed cost, no matter whether the project is 48 or 58 units. He has estimated this cost at
$2,320,000; thereby, reducing the units by 10 there is additional $8,333 in cost per unit.
Finally, the developer has stated the amenity package, which includes substantial additional
landscaping, fencing and entrance monuments, etc., is fixed at approximately $116,000. As with
the other fixed expenses, the reduction in units does not reduce this cost. Reducing the number
of units by 10, therefore, results in an additional $417 per unit for these improvements.
After adding all the above additional project costs and association fee costs, the total monthly costs
to a buyer under Alternative 2 would be $1,182.50 or $73.68 a month more than Alternative 1.
Alternative 3 is a 48-unit project with no association. Again, because this project is 10 fewer units,
the additional site acquisition/preparation cost of $8,333 is added to the per-unit cost. The $116,000
in additional landscaping and site improvements was not included in this calculation, as there are
no common area improvements. The total monthly cost to a buyer under this alternative would be
$1090.19 or $18.63 a month less than Alternative 1.
0
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JUL 15 '99 09:28AM EHLERS & ASSOCIATES P.3/4
0 Jim Kerrigan, City of Hopkins
July 15,1999
Page 2
Based in the above, the following conclusions can be drawn:
[j The cost difference to a buyer between a 58-unit project with an association and a 48-unit
project with no association is minimal.
lJ There is a fairly substantial monthly cost to a buyer for a 48-unit project with an association
as compared to the same project with 10 more units. The monthly payment would increase
by approximately $73. which would require a higher household income to qualify, which, in
turn, could change the target market for this project.
In conclusion, please be aware that due to the short time frame of the analysis we were unable to
independently verify the estimated project costs as provided by the developer, but based on our
experience, believe they are reflective of this type of project.
Please review this analysis and call me if you have additional questions.
from the desk of:
Sid Inman
Development Consultant/Financial Advisor
Ehlers and Associates, Inc.
0 3060 Center Pointe Drive
Rosellille, MN 55113
(651) 697.8507
FAX: (651) 697.8555
E-MAIL: sid@ehlers-inc.com
N:\MiIlIlSOI3IHOI'KfNSlbc3I'd-housilIB,Wllt.!
0
JUL 15 '99 09:28AM EHLERS & ASSOCIATES P.4/4
"
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58 Units With An Association
Association Number Of Amount Per
0 Fee Units Month
Base Cost $41,760,00 58 $60.00
Cost
Of Months Interest Amount Per
Unit Financed Rate Month
Base Cost $150,000 30 7.50% $1,048.82
Total Per Month 51,109.82
1------ .~, .oO. " ...._._... .. ...,,_H_"_"".' _____.,
48 Units With An Association
Association Number Of Amount Per
Fee Units Month
Sase Cost $41,760.00 48 $72.50
Site Costs $2.320,000 5B 40,000
$2,320,000 48 48,333
l.and Sacp. $116,000 5B 2,000
$116,000 48 2,417
Cost
Of Months Interest Amount Per
Unit Financed Rate Month
Base Cost $150,000 30 7.50"10 $1,048.82
E.xtra Site Costs $8,333 30 7.50% $58.27
0 Land Sacp. $417 30 7.50% $2.91
Total Per Month $1,182.50
Difference Per Month $73.68
.-.-.....,....
48 Units With No Association
Association Number Of Amount Per
Fee Units Month
Base Cost $0.00 48 $0.00
Site Costs $2,320,000 58 40,000
$2,320,000 48 48,333
Land Sacp. $116,000 58 2,000
$116,000 48 2,417
Cost
Of Months Interesl Amount Per
Unit Financed Rate Month
Base Cost $150,000 20 7.50% $1,048.82
Extra Site Costs $8,333 30 7.50% $58.27
Land Sacp. ($2,417) 30 7.50% ($16.90)
Total Per Month $1,090.19
Difference Per Month $18_63
0 ----.--....-,... ,--.-
CHART -BEARD.123
0 CITY OF HOPKINS
Hennepin County, Minnesota
RESOLUTION NO: 99-57
RESOLUTION MAKING FINDINGS OF FACT AND
APPROVING A REZONING ON THE FORMER
ALLIANT TECH PARKING LOT
WHEREAS an application for a rezoning, ZN99-2, has been made by The Beard Group;
WHEREAS the procedural history of the application is as follows:
1. That an application for a rezoning was made by The Beard Group on May 28,
1999;
2. That the Hopkins Zoning and Planning Commission, pursuant to mailed and
published notice, held a public hearing on the application and reviewed such
application on June 29, 1999: all persons present were given an opportunity to be
heard;
3. That the written comments and analysis of City staff were considered; and
0 4. A legal description of the subject property is as follows:
Tract J and West 581.55 feet of Tract I also that part of west 581.55 feet of Tract
K lying south of north 434 feet thereof, Registered Land Survey No. 561.
NOW, THEREFORE, BE IT RESOLVED that the application for rezoning, ZN99-2, for the
above described property to R-I-A, PUD is hereby approved based on the following Findings of Fact:
1. That the R-1-A, PUD zoning district will comply with the Comprehensive Plan
designation.
2. The PUD zoning for this application is a departure from the strict application of
required setbacks, lot size, density and other requirements of R-I-A zoning. This
PUD rezoning will maximize the development of the subject property while
remaining sensitive to its unique characteristics and those of adjacent districts.
3. The City Council has determined that the subject site is an area suitable in
location and character for a PUD zoning.
4. The PUD zoning achieves efficient use of the subject property for recreation and
utility purposes.
BE IT FURTHER RESOLVED that application for Rezoning ZN99-2 is hereby approved
subject to the following conditions:
0 1. That rezoning of the former Alliant Tech parking lot from R-I-C to R-1-A, PUD
__ __________ _n____
0 is subject to the applicant satisfying all terms and conditions of the final plat
approval.
2. That the applicant shall execute a PUD Development Agreement complying with
all of the conditions of approval of the plat.
3. That the applicant shall also comply with all requirements of Hopkins Ordinance
Section 565.
Adopted this 20th day of July, 1999.
Charles D. Redepenning, Mayor
ATTEST:
Terry Obermaier, City Clerk
0
0
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CITY OF HOPKINS
Hennepin County, Minnesota
0 ORDINANCE NO. 99-827
AN ORDINANCE REZONING THE PROPERTY AT THE FORMER ALLIANT TECH
PARKING LOT
THE COUNCIL OF THE CITY OF HOPKINS DOES HEREBY ORDAIN AS
FOLLOWS:
That the present zoning classification ofR-I-C, Single Family Medium Density, upon the
following described premises is hereby repealed, and in lieu thereof the said premises is hereby
zoned as R-I-A, PUD.
Tract J and West 581.55 feet of Tract I also that part of west 581.55 feet of Tract K lying south
of north 434 feet thereof, Registered Land Survey No. 561.
First Reading: July 20, 1999
Second Reading: August 3, 1999
0 Date of Publication: August 11, 1999
Date Ordinance Takes Effect: August 31, 1999
Charles D. Redepenning, Mayor
ATTEST:
Terry Obermaier, City Clerk
APPROVED AS TO FORM AND LEGALITY:
City Attorney Signature Date
0