Planning Commission Meeting Date: October 10, 2024
To: Members of the Planning Commission
From: Jake Reilly, Community Development Director
Mikayla Schmidt, City Planner
Mathias Hughey, Associate City Planner
Nate Carlson, Economic Development Coordinator
Ben Martig, City Administrator
Title
Review and Discussion of Amendments to Chapter 34 - Land Development Code Related to Industrial and Agricultural Land Uses and Re-Zoning of Property.
Body
Action Requested:
No formal action requested. Staff will facilitate a discussion related to standards and guidelines for industrial districts.
Summary Report:
The proposed industrial zoning ordinance amendments are in response to:
1) stated interest in refining land development code regulations to provide clarity to both staff and developers regarding design guidelines and standards;
2) the adoption of the Northwest Area Business Park Alternative Urban Areawide Review (2023) and related renewed interest from developers and site selectors;
3) and MN Session Law Chapter 63, which legalized adult-use cannabis and established a regulatory framework over the cannabis industry through the State of Minnesota’s Office of Cannabis Management. The Office of Cannabis Management (OCM) is expected to begin licensing cannabis businesses in early 2025.
The proposed amendments herein focus on permitted industrial uses for emerging technologies including data storage, industrial scale agri-business, clean energy production, cannabis cultivation, processing and manufacturing enterprises, along with Land Development Code definitions, guidelines, and standards.
Background
The City of Northfield has been planning for the development of the Northwest Area in addition to other redevelopment and infill site strategies consistent with the adopted Comprehensive Plan (2008) (Attachment 1) and the City’s Strategic Plan related to tax base growth. This area is being explored to further enhance updates for development in conjunction with the Comprehensive Plan update that is part of the City Strategic Plan. Although delayed by COVID and other priorities, staff is making substantial advancement in advancing the Council-recommended incremental approach to development in the area, memorialized in Resolution 2019-008 (Attachment 2).
How land is used and where those uses are in relationship to people, goods, and services is an important consideration in comprehensive planning. As the city works through the 2045-horizon comprehensive plan (Attachment 3) alongside a focused initiative to diversify the tax base in the city by taking a data-driven approach, the City Council, as advised by the Economic Development Authority (EDA) and the Planning Commission, has a role in guiding that work. To inform that work, in the fall of 2023, the Northfield City Council commissioned and subsequently adopted an Alternative Urban Areawide Review (AUAR) for an area of approximately 787 undeveloped acres (the 530 acres in the city limits and the remainder in Greenvale Township) northwest of downtown and west of the Northfield Hospital complex.
The AUAR is a unique-to-Minnesota environmental review process intended to evaluate cumulative impacts under multiple development scenarios, including the existing scenario described in the 2008 Comprehensive Plan, and consider mitigation strategies. The two scenarios in the AUAR reflect that intent. Since adopting the AUAR, site selectors have been expressing more interest in the site and several landowners in the area are willing participants in that conversation. More information about the AUAR and the document itself is available on the City’s website (Attachment 4).
Existing industrial-use areas do not have particularly strong guidelines that are specific to industrial site development, design elements, consideration of sustainability concerns, or compatibility with surrounding uses. In an effort to focus recruitment efforts for potential new and/or expanded industrial uses citywide, and to ensure those recruitment efforts can be effective and can accurately reflect the current strategic and comprehensive goals of the city related to expanded/diversified tax capacity and tax base, climate change mitigation, resiliency, and economic success, staff seeks input on updated criteria for industrial uses, particularly regarding design and performance standards.
The land retains an agricultural zoning designation representing the existing use. However, the zoning is intended to be an interim zoning classification allowing agricultural activities within the city limits on land intended for later development. Some uses allowed in the agriculture zone other than crop raising and residences include commercial solar farms and community solar gardens, aggregate extraction/mining, and schools. Northfield annexed approximately 530 acres in 2009 for commercial and industrial development just west of the Northfield Hospital; annexing additional land for commercial and industrial development was identified in the 2006 Comprehensive Economic Development Plan. To date, no development has occurred in this area except the installation of commercial solar farms, which require a conditional use permit.
Updated zoning regulations for the City were adopted in 2011, but the zoning classification intended for this area - the Economic Development Floating Zone or ED-F, was not completed. Although a draft Master Plan for a business park in this area was prepared in 2011, it was not adopted.
In 2018, the City Council established a committee comprised of members from the EDA, Housing and Redevelopment Authority (HRA), Planning Commission and City Council. The committee’s charge was to provide a recommendation to City Council regarding a process to facilitate growth in the Northwest Area. After careful consideration of multiple approaches to planning for development in the area, including a master plan, the committee recommended an incremental approach to development in the area, memorialized in Resolution 2019-008.
The memorandum accompanying the resolution identified several conclusions and recommendations, as well as future steps. Of note, and relevant to this memorandum and the potential opportunity adopting an interim ordinance presents, are the following:
This report is intended to try to address some of the specific conclusions and recommendations from the 2019 resolution, specifically:
• The 500 acres in the northwest area cannot be viewed in isolation from the overall economic development strategies employed by the City; 500 acres represents about 10% of the entire area of the City and must be integrated physically and economically into the community.
• Downtown is one of Northfield's most important assets; development should support and not draw business from downtown.
• Five hundred acres is more land than is needed for new growth within the foreseeable future. Since the 2011 Business Park Master Plan included the entire area, any proposed plan would need updated information, e.g. market feasibility; market absorption rates; fiscal analysis & return on investment for the City's estimated capital and maintenance costs for infrastructure including the expected timeline for breakeven on that investment.
• Staff and both appointed and elected decision makers should strive for vertical certainty and general agreement about development policy and process to reduce development uncertainty and risk.
Recommendations:
• Planning documents should be reviewed, analyzed, and updated:
o Consider further analysis of citywide land use and infrastructure to inform the planning process including official mapping of proposed road and infrastructure corridors.
o Create and adopt a Future Land Use map.
o Updating plans and policy should also reflect other City priorities such as climate action, equity, and transportation choice.
• Sustainability: The fiscal security of Northfield's future with respect to development opportunities and sustainability practices should be at the forefront of planning discussions. Northfield must evaluate the return on public investment for all projects including maintaining and replacing infrastructure improvements.
Since the 2008 Comprehensive Plan and land development/zoning regulations were updated, and the committee presented the above-referenced memorandum and path forward for the Northwest Area, including stating a request for a staff team to convene a conversation with Saint Olaf College and Northfield Hospital staff regarding the potential to rezone the approximately 50-acres next to the hospital site, the City of Northfield adopted a Climate Action Plan (CAP) in 2019 (Attachment 5) which directs the City to, “integrate the Climate Action Plan into policy and plan updates including, but not limited to, the comprehensive plan, Land Development Code, complete streets policies, and others,” (PP7.1, p. 38). Given that this work has not yet been done, the Northfield 2045 Comprehensive Plan process is an ideal time to consider climate as part of land use and capital planning. In addition, the CAP contains several policy goals for promoting, supporting, and preserving agriculture and local food production and for recruiting green businesses for any business park; both are relevant to this area.
Northfield has not yet adopted sufficient code language potentially applicable to this area that addresses elements of the CAP nor responds to conclusions and recommendations in the 2019 memorandum. Northfield has prioritized increasing the commercial and industrial tax base to reduce the tax burden on residential taxpayers and generally increase the tax base to pay for city services and improvements. However, Northfield has not yet evaluated how large an increase in tax base is needed for the level of spending anticipated or for the desired reduction in dependence on residential taxpayers. Further, and more critically, the city has not considered how the increased infrastructure and service costs will offset gains in tax revenues.
“Under Minnesota property tax law, class rates for commercial and industrial value are 1.50%-2.00%, in contrast to 1.00%-1.25% for residential value. Changes to commercial, industrial, residential, and other land uses in the city, along with resulting shifts in property tax revenues, will also result in public costs. While the property tax framework is rigidly standardized statewide, local policy direction about the location, density, and mix of land use is a powerful driver of productivity and economic resilience,” notes Jon Commers, CEO of Visible City, Inc. in a proposal for his firm to study the outcomes associated with recent years; infill development, quantify capacity for expanded infill development areas citywide - those already fully served by public infrastructure - and identify and test areas that appear to be ripe for redevelopment as well as test approaches and mix of uses to commercial and industrial expansion.
As demonstrated in multiple adopted plan documents, studies, evaluations, and reports over the decades, the City of Northfield tax base comprises mostly single-family homes and other residential structures. Property taxes are the primary mechanism by which municipalities and other local units of government are funded in Minnesota. Diversifying a municipalities’ tax base is one way to reduce the impact on one type of property owner, and in a community like Northfield with more than 30% of its market value consisting of tax-exempt property, the burden falls disproportionally on an individual homeowner.
Simply rezoning the areas to an appropriate commercial/industrial category is not sufficient to ensure future development meets goals related to carbon neutrality, nor the State of Minnesota’s similar goals. Nor is it sufficient to ensure that higher value natural resources such as fens, wetlands, old-growth forests, and other environmental resources are not compromised by development. Existing industrial-use areas do not have particularly strong guidelines that are specific to industrial site development, design elements, or consideration of sustainability concerns.
Proposed Amendments:
Staff proposes a limited update to the existing I1-B: Industrial and amendments to the existing ED-F: Economic Development Floating District zone that considers the goals of the Climate Action Plan, changes in building materials and technology, energy efficiency and environmental and economic sustainability in order to provide guardrails that meet those stated and adopted planning goals and provide clear guidelines and standards for potential industrial users interested in building in Northfield. Additional updates respond to MN Session Law Chapter 63 regarding adult-use cannabis. A more complete update would take place during the 2025-2026 Land Development Code update process.
The guidelines and standards are designed to improve tax capacity, preserve natural features, ensure sustainable outcomes related to power and water consumption, stormwater management, limit greenhouse gas emissions and ensure any public streets are designed for connectivity. They are also designed to ensure high-quality building design, sufficient and appropriate screening, and minimize negative external impacts on neighboring property especially regarding light and sound “pollution,” vibrations and other potential negative externalities.
Staff also proposes minor updates to the existing A-S: Agricultural zone to respond to both MN Session Law Chapter 63 and concerns regarding the proliferation of commercial solar farms in agricultural areas and potential impacts on the power grid and natural resource. Existing zoning code language considered in this amendment package is included as Attachment 6.
Proposed code amendments will be provided supplemental. Following discussion, a redlined version of the relevant portions of the city’s Land Development Code will be reviewed by the City Attorney. A public hearing at the Planning Commission will be scheduled once the City Attorney has reviewed.
Proposed amendments include:
• Definitions and standards related to:
o Accessory uses
o Bio-industrial uses
o Datacenter/server farm/cryptocurrency mining
o Cannabis cultivation
o Cannabis and hemp product manufacturing
o Limited production and processing
o Technology center
o Renewable energy production and use
o Site development guidelines
§ Buffers/green space
§ Building façade elements
§ Building height
§ Fencing
§ Floor area ratio
§ Public and private roadways
§ Screening, landscaping, buffering
§ Security
§ Storage
• Performance Standards
o Ambient temperatures
o Electric and magnetic fields
o Electronic waste
o Energy use/carbon-neutrality
o Noise/Sound
o Vibration
o Water use/reuse
Questions:
Are there additional concerns that do not appear to be addressed in the proposed definitions, performance standards, and/or design guidelines?
Consider what uses are identified as permitted, conditional or accessory. Are there questions or concerns regarding those distinctions between uses or if they are designated appropriately? (Allowing a use by right is less burdensome on both staff and the project proposer, however, a conditional use permit process may allow for additional or unknown concerns to be addressed during that process.)
Alternative Options:
Apply the existing I1-B: Industrial designation in the land development code to portions of areas designated as “district” in the comprehensive plan and A-S: Agricultural on the City of Northfield Zoning Map.
Apply the ED-F designation to portions of the NW area currently zoned A-S: Agricultural.
Include only certain components of the proposed amendments at this time, to be incorporated into a 2025 Land Development Code update.
Financial Impacts:
At this time this is a staff-driven effort and therefore no additional funds are anticipated to be spent on evaluating or writing code language. However, there are long-term financial impacts associated with industrial uses, both positive and negative.
Tentative Timelines:
August 15, 2024 - Initial discussion of industrial use district with Planning Commission
October 2024 - Draft language to planning commission and council
October 2024 - Public hearing at planning commission on draft language
November 2024 - Planning commission recommendation on text and/or map amendments
December 2024 - Council decision on text and/or map amendments
Q1 2025 - New industrial use regulations in place.