Divided concerns prevented Dayton City Council from moving forward with a 2012 comprehensive plan amendment that would have removed the “urban reserve” designation from hundreds of acres of land within the city.
When the council approved the 2008 comprehensive plan approximately 20 percent of the city’s land mass was designated as urban reserve encompassing almost 100 parcels owned by an uncertain number of property owners. The rest of the land in the city was given phased year designations for expected development. Throughout the process, city administration explained these phase designations are meant to serve as a guideline more than a strict adherence for the city.
Assistant to the City Administrator Erin Stwora told the council that a meeting with the Metropolitan Council precipitated the exploration to change the urban reserve designation made in 2008.
“Any time a developer wants to develop in urban reserve they are required to go back to Met Council with a comp plan amendment,” said Stwora. “That provides them the opportunity to nitpick at the project. It also costs developers money.”
Stwora went on to explain representatives from Met Council said they were unlikely to look favorably on a single project within an urban reserve, making it potentially impossible for landowners to turn their properties into developments while designated as such. With Met Council expressing they were amenable to changing the urban reserve designation, the city began to pursue that route.
“It would allow the council to have more control over what happens instead of Met Council,” said Mayor Doug Anderson.
For Anderson and councilors Phil Forseth and Scott Hoke, pulling the land out of urban reserve makes sense because of the flexibility they say it would afford the city council, landowners and developers. They also believe it would save developers time and money by not having to submit a comp plan amendment to Met Council for approval. Since approval would be directly under city council’s control the process could potentially flow more quickly and smoothly.
Councilors Tim McNeil and Rick Shermer oppose pursuing a change in the land use designation.
One of their concerns is how the change in designation might affect property taxes for landowners in the current urban reserve. McNeil said based on what adjacent properties outside the urban reserve pay for property taxes, those within the urban reserve could see their taxes go from $8,000 per acre to $12,000 per acre.
At a point in the meeting where developer and landowner Scott Wiedema was allowed to provide comments, he said he was being taxed higher than $8,000 per acre because he had a building on his land. He suggested landowners with a building on their land or those who farmed their land would not be impacted so greatly by a tax rate change. While these conditions could include a number of parcels within the urban reserve it does not include all of them.
Mayor Anderson asked Shermer if there was a way to appease his concerns on the tax rate if he would consider moving forward in favor of the change.
“It’s more to it than that,” Shermer said, but didn’t provide specific concerns. He later commented with a change in makeup on the council forthcoming with the impending election, he didn’t believe this current council should be making this decision; that they should leave it for the future council to decide.
Shermer said the city wasn’t losing out on development opportunities because they have a portion of their land in urban reserve rather it is because the city’s fees are too high. He suggested that was why Guardian Angels stopped development on their property in the urban reserve. While council meetings don’t normally provide for residents to weigh in on council business outside of open forum Shermer invited Dave Fleck to speak on the matter. Fleck ended up saying they paused on their project because his land costs were spiraling too high comparative to other developers’ who are able to buy foreclosed properties at undercut rates. This practice would out price Fleck’s project compared to others who were able to purchase land in neighboring cities for “pennies on the dollar.” He did not comment on Dayton’s fees but offered his opinion on dealing with Met Council.
“I’d rather come into a city with no Met Council,” said Fleck.
Shermer said the city was not developing in other parts of the city that were earmarked for development in the 2010-2015 time frame based on the guidelines in the 2008 comp plan. Originally Shermer had been in consensus with the change and Anderson pressed him on his change of heart.
“We don’t know who is ready, who has the ability and financing,” said Anderson. “Our goal in this city is we need more rooftops, you more than anyone says that, are you now saying you don’t want the most flexibility for that?”
Shermer remained adamant that there was nobody looking to develop in the urban reserve area claiming Weidema was the one person who wants to do something in the urban reserve.
“Actually, there are three purchase agreements on the table,” said Stwora who declined to provide details as she had been asked not to reveal them by the parties involved.
Since other individuals were allowed to comment, Anderson asked an urban reserve landowner Bob Engstrom his thoughts. The council also had mentioned a project Engstrom would like to explore for his property.
“I may have a lot of company, others in our 70’s, where waiting until 2030 is not appealing,” said Engstrom. “Development costs are quite severe now, you have to have a special piece of land. Just because it’s not by the pipe doesn’t meant the market isn’t there. That’s a simple minded approach.”
Part of the reason the land that was drawn into urban reserve during the comp plan process was made based on where sanitary and water pipe was located within the city.
McNeil was also concerned about how taking the almost 100 parcels out of urban reserve would affect the city’s density rate. He didn’t want to have to commit that land to that density just yet. He indicated he’d rather take a more cautious wait-and-see approach, believing the change would actually do the opposite by tying the city’s hands and allowing for less flexibility.
Anderson pointed out the city’s density rate of 3 units per acre is a Met Council mandate that the city has no control over and will always be in place. All Met Council cities are subject to maintaining that density rate. Keeping the parcels designated as urban reserve doesn’t change that because Met Council would apply that standard when reviewing a developer’s comp plan amendment.
With the tax rate impact still a question mark Hoke suggested having an assessor come to a meeting to discuss the issue as well as hold a public hearing for potentially affected property owners.
McNeil suggested offering property owners the option of removing all the parcels from urban reserve, none of them or only some of them.
“You wanna pick the winners and losers?” asked Hoke suggesting that an arbitrary decision of where to draw new lines would affect who may or may not be able to make money off their land through development.
Because the amendment change would require a 4/5 vote and the council consensus didn’t lend itself to that, no vote was called. However, before abandoning the possibility of removing the urban reserve designation altogether the city plans to invite an assessor to speak on the tax impact as well as hold a public hearing on the matter at their Tuesday, Sept. 11 council meeting at 7 p.m. They are hoping to hear a good representation of opinions from urban reserve landowners on the matter.