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IEDC Agenda 04-05-2011AGENDA MONTICELLO INDUSTRIAL & ECONOMIC DEVELOPMENT COMMITTEE Tuesday, April 5, 2011 7:00 a.m., Mississippi MEMBERS: Chair Rich Harris, Vice Chair Luke Dahlheimer, Patrick Thompson, Bill Tapper, Dick Van Allen, Dan Olson, Zona Gutzwiller, Wayne Elam, Joni Pawelk, Elaine DeWenter, Chris Kruse, Don Roberts, and Wes Olson LIASIONS: Sandy Suchy, Chamber Clint Herbst, Mayor Glen Posusta, City Council 1. Call to Order 2. Approve Minutes: a. March 1, 2011 Consideration of adding items to the Agenda 4. Reports: a. Economic Development Report b. City Council 1. PiberNet 5. BR &E c. Chamber of Commerce and Industry a. Update on projects 1. Downtown 2. Transportation 3. Communication b. Next Meeting date 6. Concierge Team a. Breakfast with Mayor /Administrator b. Suggestions for site tours 1. Production Stamping Wed. April 20 °i at 9am e. Resource guide (web /print) d. Word on the STREET? e. Expansion — site review meetings Discuss consideration of an update relating to the Monticello Zoning Code regulations for Adult - Oriented Land Uses 8. Adjounmient. (8:30am) IEDC Minutes 03/01/11 MONTICELLO INDUSTRIAL & ECONOMIC DEVELOPMENT COMMITTEE (IEDC) MEETING MINUTES Tuesday, March 1, 2011 7:00 a.m., Mississippi MEMBERS PRESENT: Chair Rich Harris, Vice Chair Luke Dahlheimer, Bill Tapper, Dick Van Allen, Dan Olson, Zona Gutzwiller, Wayne Elam, Joni Pawelk, Wes Olson MEMBERS ABSENT: Patrick Thompson, Elaine DeWenter, Chris Kruse, Don Roberts LIASIONS PRESENT: Sandy Suchy, Chamber Clint Herbst, Mayor LIASIONS ABSENT: Glen Posusta, City Council STAFF PRESENT: Economic Development Director Megan Bamett- Livgard, City Administrator Jeff O'Neill 1. Call to Order 2. 3. Rich Harris called the meeting to order at 7:00 a.m. Approve Minutes WAYNE ELAM MOVED TO APPROVE THE FEBRUARY 1, 2011 MINUTES AS AMENDED. MOTION WAS SECONDED BY LUKE DAHLHEIMER. MOTION CARRIED 9 -0. Consideration of adding items to the A¢enda None 4. Reports a. Economic Development The EDA will again be discussing the potential purchase of the 13.6 acre Chadwick property, located adjacent to the Monticello Business Center at their March meeting. The City received an inquiry from a business in Elk River looking to expand and potentially relocate to Monticello. Staff hopes to meet to tour their facility in early March. City staff and the McComb Group met in February to review preliminary design IEDC Minutes 03/01/11 concepts for the Embracing Downtown Project. The Steering Committee will review the design concepts on March 15th and Downtown Stakeholders will review the design on March 29th. The report will be presented for community input in April. b. City Council 1. FiberNet Mayor Clint Herbst reported that Jerry Olson is the new interim General Manager at FiberNet replacing Don Patton. Both men are eXperienced HBC employees contracting with the City for their expertise itl telecommunications. The transition will not affect FiberNet operations and a permanent General Manager will be hired at some point. 2. Street Reconstruction The Street Reconstruction project segment currently underway involves the East side of River Street from CSAH 75 to Interstate 94. There was brief discussion about the need to create a better intersection. 3. Public Works Equipment`l"our The City Council members visited Public Works to take a look at various pieces of equipment due to lye replaced. The City had been.cutting back on equipment replacement for a time but determined certain equipment is in need of replacement due to continual maintenance. These costs are included in the budget. 4. Bertram Chain of. takes (3iiint. The City will atibmtt a grant application for recreational fields for the next two parcels when fiirttier development plans are in place. The Minnesota Youth Soccer Association (MY A) board met to determine their level of interest in establishing a soccer facility on the City's sludge field just north of the Bertram Park. If approved by their board, the. iviYSA would present the idea to their membership for input. This may strengthen the City's grant applications for the Bertram Park property. 5. Additional Updates Flood: The City doesn't anticipate any serious flooding problems. Staff is preparing to respond when appropriate. Goal Setting: The City will be participating in a broad goal setting process. Department Heads and City Boards and Commissions will submit proposed goals for review by City Council. Council will meet to discuss and rank these goals for IEDC Minutes 03/01/11 implementation priority. Wastewater Treatment: The City is required to make plant upgrades by 2017. Wastewater treatment blueprints have been drawn up for expansion. There are many issues yet to be resolved regarding landfill, sludge storage options, and sharing costs with Cargill - a major City water user. The potential MYSA project on the sludge field would certainly determine the pace at which improvements would need to be made. c. Chamber of Commerce and Industry The Chamber will host the State of the City luncheon at River City Extreme on March 15t11. IEDC members are also invited to participate in Business Day at the Capital scheduled for March 16t1i. 5. BR &E a. Update on Projects 1. Downtown River Group The Downtown. River Group has been, researching ways to incorporate the river into local events and promotions. Kevin Sorenson from Riverwood Bank met with staff to develop reorcation on the rivcr programs such as canoeing or kayaking for this summer. 2.: Transportation Staff asked for volunteers interested in participating in a Transportation Task Force established to move forward studies related to the adopted Transportation Plan. Both Mayor Clint Herbst and IEDC Vice Chair Luke Dahlheimer agreed to consult their calendars for, availability to participate. 3. Comnninication The Economic Development website, Building Business in Monticello, has been further enhanced. The Concierge page has added resources including information about the availability of local meeting rooms and higher education facilities in the area. b. Next Steps Staff will meet with BR &E groups to ensure that each continues to make progress on their assigned projects. IEDC Minutes 03/01/11 6. Concierge Team a. Breakfast with Mayor /Administrator 1. Midwest Precision Machine, Suburban Manufacturing, Aeroplax The Mayor and City Administrator have had various monthly breakfast meetings to strengthen connections with business community: b. All Elements Site Tour Scheduled for March 2 "`A at'9am The Concierge Team plans to tour the All Elements business this month. c. Resource guide (web /print) Staff introduced Concierge postcards to be used as local marketing flyers. d. Word on the STREET? Sandy Suchy noted that the flower shop in town, Paconia, is looking for a buyer. Luke Dahlheimer agreed to connect staff with someone who'd contacted him about potentially, starting a business in Monticello. e. Expansion --Site Review' Meetings Three businesses plan to do industrial expansions this year. The legislature is working to extend the July 1St deadline for utilizing TIF financing. 7. Benin Discussing Mori Staff asked the IEDC to some discussion about t and Industrial Business Park remain zoned Ligb commercial users. to consider Monticello's future industrial needs. There was aunt of land currently zoned Industrial, guided Industrial, is (IBC). The EDA prefers that the Monticello Business Atrial. IBC zoned property integrates industrial users with Staff noted that, although there are some 30 -35 acres of developable land in the industrial park, it is not a contiguous piece of property and is difficult to sell. The City has begun to notice a pattern of inquiries looking for some 50 acres of land. This represents a very different shift in the demand for developable land. Jeff O'Neill indicated that there are a few larger parcels in Monticello which might be considered for such industrial needs. Each would involve significant public investment to IEDCMinutes 03/01/11 make parcels developable. Staff noted that there are federal infrastructure grants available. There was brief consideration of the issues surrounding each site. The Spike property, about 80 acres of land, adjacent to Monticello Business Park, would likely be the most readily developable in teens of utilities and sales price. It might be best suited for IBC zoning as it is close to Bertram Park. It does not have easy access to the interstate however. The area south of Featherstone on Highway 25 would provide hundreds of acres in an easily accessed location but utilities would need to be oxtended. The original heritage development is also a largo parcel, (land which could be utilized as industrial. There seemed to be a consensus that theme is a need to further discuss, the option of a second industrial park in Monticello as the City would need to be prepared to accommodate industrial growth to come. 8. Adjournment BILL TAPPER MOVED TO ADJOURN AT 8:24 AM MOTION WAS SECONDED BY LUKE DAHLHEIMER. MOTION] CARRIED 9 -0. Recorder: Kerry T. Burn Approved: April S, 20t 1 Attest: Megan Barnett- Livgard, Economic Development Director Economic Development Director Updates: EDA: The EDA made an official offer to Mr. Chadwick for his 13.6 acre parcel. Staff is waiting for John to respond to the offer. Planning Commission: The Community Development Director completed a detailed housing report that was presented to the Planning Commission at their March meeting. A copy of the presentation is attached to this report. Work continues at a brisk pace on the Monticello Parks and Trails Plan & Resource update. Below is a bullet point summary of progress. • Park survey complete, results tabulated. • Preliminary survey findings and draft park plan framework presented to Parks Commission and MCC Advisory Board. • Meeting with Monticello School District representatives set for early April. • NAC in contact with local athletic associations regarding plan • NAC will be meeting with Embracing Downtown Monticello engineering firm, Westwood, to coordinate downtown trail and park planning efforts. • NAC will incorporate the concept sketch for the Bertram Chain of Lakes recreation area into the draft plan. • Community meetings regarding the draft plan will be scheduled for April /May. • The City has authorized W SB to begin working on the GIS base park and trail layers, and the development of a new online mapping interface to integrate, park, trail, activity, history and point of interest information. • Database of parks, trails and park activities complete. Includes lengths, surfacing, amenities and more. Provided to WSB for GIS layer and web mapping. • Database of points of interest/historic sites created. Fact sheets on each in progress (Senior Service Program employee Carole Larsen compiling and researching). • Website application for parks /trail drafted. Parks, trail and activities tabs all complete in draft form. URL set -up in progress. BR &E: Part of regular agenda. Inquiries: Wright County Economic Development Partnership received an inquiry from a manufacturing company looking to locate in Wright County. Staff submitted information regarding the City's industrial park and privately owned industrial properties that would be a suitable option in Monticello. Industrial Marketing / Venues: Information pertaining to opportunities and amenities in Monticello was direct mailed to companies in St. Cloud. A follow up concierge piece will be sent the week of April 4, 2011. Staff will also work on establishing a commercial broker breakfast event in April. The idea is to invite applicable brokers to make them aware of what Monticello has to offer potential clients. Business Communications & Retention Initiatives: The City hosted a State of the City event at the March 15°i Chamber Lunch. The event was well attended. Staff provided detail information pertaining to transportation, FiberNet, economic and community development, and Bertram Chain of Lakes. At the end of the meeting staff distributed Concierge postcards to everyone in attendance. We are making every effort to let the business community know that Monticello has many resources and we are here to help them in any way possible. The Chamber / Concierge Directory is anticipated to be delivered to the business community in April. Embracing Downtown: Will be discussed as part of the regular agenda. Economic Development related articles: Attached please find a copy of an article regarding MN's recession recovery published by Positively MN. Future Meeting Dates: 1. EDA: April 13, 2011 2. Embracing Downtown Community Meeting: April 18, 2011 IEDC April 5, 2011 Dave Senf • t' • 41 This. � x Iii cle Minnesota's economy is rebounding from the Great Recession at a fasterpace than the rest of the country, but the recovery this time looks nothing like the rebound after the 1990 -91 recession. ' rends published an article several years ago "Moving on Up: The Great 1990s Minnesota Expansion"— that praised Minnesota's economic performance during the 1990s.1 The state economy got a head start on the boom years by managing to avoid the worst of the country's first jobless recovery following the 1990- 91 recession. Minnesota's job growth surged while the national job market limped along for two more years after the recession. Minnesota employers increased payroll numbers at roughly twice the national rate between 1991 and 1993, hiring 4 percent of all employees added to U.S. payrolls during the first jobless recovery. 2,800,000 2,600,000 0 2,400,000 E 2,200,000 2,000,000 1990 1991 1992 1993 As a result Minnesota's share of the nation's wage and salary employment shot up above 2 percent for the first time (see Figure 1). Job growth in the state continued to outpace national job growth, albeit not by much, through 1996, roughly tracked national job growth for the rest of the boom years and through the 2001 recession, then slipped behind the national pace in early 2003. Minnesota workers benefited from what was essentially an 18 -year economic expansion that kicked off in 1984. Near the end of the expansion, labor shortages developed and unemployment dropped to record lows. Minnesota's average annual unemployment dipped below 4 percent for seven straight years between 1995 and 2001, achieving a record -low 2.8 percent unemployment in 1998 and 1999. The state was ajob seeker's nirvana during the late 1990s, producing record labor force participation and employment -to- population levels. The low jobless rate even induced domestic migration to Minnesota for the first time in three decades as workers relocated from other states to take advantage of favorable job opportunities. Wages for Minnesota workers increased faster than nationwide FIGURE i _Minnesota's Share of Nonfarm Wage and Salary Employment ® Jobs — National Share 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: 5easonallyndjustedemployment from (onent Empleymentstodstics (CES) program, Minnesota Department of Employment and Economic Development 0 MINNESOTA MIRACLE minnesota economic TRENDS march 2011 2.06 2.04 z 2.02 2.00 1.98 d 1.96 D 1.94 Dave Senf FIGURE Minnesota's Per Capita and Median Household Income Rankings, 1929 -2009 5 • Per Capita Income Rank o s�♦ _ _ v • Median Household Rank is o ea e • es 20 ee oo ee p 35 — 1919 1929 1939 1949 1959 1969 1979 1989 1999 2009 Source: Per capita income data (ram, Bureau oftronomicAnolysis, U.S. DepartmentofCommerce. Median household income data 6om U.S. Census. in response to the tight labor market, driving Minnesota's average annual wages and salaries from 2 percent below the national average in 1995 to 2 percent above by 2003. "The net result: By all broad economic measures Minnesota's economy outperformed the national economy during the 1990s, boosting the state's relative economic position to an all -time high. One decade, one mild recession and one Great Recession later, Minnesota's share of the national economic pie has slipped a bit, but the gains achieved during the boom years haven't completely faded. Minnesota is rebounding faster than the rest of the country from the Great Recession, and its relative economic picture is once again on the upswing. The state lost a smaller share of its payroll employment than the rest of the country during the Great Recession, with a peak - to- trough decline of 5.8 percent versus 6.1 percent nationally. More importantly, the state has been adding jobs at a much faster pace than the country since job growth resumed in late 2009. Payroll totals in Minnesota climbed 1.9 percent between September 2009 and November 2010, or almost three times as fast as the 0.7 percent increase nationally. There is still a long and bumpyjob recovery ahead for Minnesota and the rest of the country, but for now the state is gaining ground relative to the rest of the nation. `Through last November, Minnesota had recaptured 33 percent of the jobs lost during the Great Recession, while nationally only 11 percent of the jobs had been recovered. Minnesota's relatively strong job growth over the last year has lifted its share of payroll employment to near the record level recorded during early 2003. Other broad economic measures have stopped slipping and will likely move upward again if Minnesota's job growth continues to run ahead of the national pace. During the boom years of the 1990s, Minnesota's per capita personal income and median household income rocketed to the upper tier after having hovered in the mid -teens during the previous two decades (see Figure 2). Minnesota's per capita income climbed to the eighth - highest by 2003 before starting to tail off as state job growth lagged behind the national rate. Over the last few years, Alaska, California, Illinois, Hawaii, Virginia, Washington and Wyoming have passed Minnesota, pushing the state's standing down to 15th in 2009. Minnesota's per capita income slipped from 9.4 to 5.6 percent higher than the U.S. average between 2004 and minnesota economic TRENDS march 2011 NO MINNESOTA MIRACLE 2009. The decline translates into $1,500 per person in 2009. U.S. census data on median household income nationally show a similar track for Minnesota. The state's median household income ranking jumped from the mid -teens in the early 1990s to second place behind Maryland in 2000 before dropping to 11th in 2009. Minnesota's median household income was reported by the census to be 29.2 percent higher than the national median household in 2000. Nine years later the state's median household income was only 12.7 percent higher than the national median household. The state's 2009 median household income would have been roughly $64,300 rather than the actual $56,100 reported for 2009 if Minnesota had held on to the 29.2 percent advantage enjoyed in 2000. Minnesotan's relative income slide between 2003 and 2009 occurred across all major components of personal income except for personal current transfer receipts (see Figure 3).2 Personal current transfer receipts are primarily government payments, including Social Security, Medicare and Medicaid benefits, food stamps, veterans benefits and unemployment insurance compensation. Minnesota's share of these sources of income declined during the boom years but climbed over the last decade. Minnesota's share of the other personal income components, including the largest source of income, wage and salary disbursements, spiked during the boom years before peaking around 2003. Wages and salaries then waned from 2005 to 2007 before flattening out during the Great Recession. Most of the state's relative loss in per capita income can be traced to lower shares of wage and salary disbursements and dividends, interest and rent income. Minnesota's share of the national wage and salary pie probably got a tad bigger in 2010 because the state added jobs at a faster clip than many other parts Dave Senf of the country. Unlike some other states, Minnesota is not experiencing a jobless recovery. The employment rebound may not be as robust as hoped for, given the depth ofjob loss during the Great Recession, but job opportunities are improving as layoffs gradually return to pre - recession levels and hiring slowly picks up. Job creation over the last year in Minnesota has been led by the administrative and waste services (temp help jobs), accommodation and food services, and health care and social assistance sectors. Manufacturing, private educational services, retail and information hiring have also shown encouraging signs of life. Minnesota's Share of 2.? U.S. Personal Income Components, 1989 -2016 a; 2 a E2.( E 0 a 1.S ° 1.8 Vf w 1.7 0 1.6 v 0 1.4 1.3 1.2 FIGURE 3 Source: 8ureouoffranomrcAnaois,US.. Departmentoffommeree I ncomedatafoi1o10i s through the thodquarter The amounhshow are theseasonallyadjustedannual estlmatesfdrthethlydguaror2010. NO MINNESOTA MIRACLE minnesota economic TRENDS march 2011 Dave Senf FIGURE 4 Minnesota Job Growth After Recent Recessions The dismal housing market continues to be a major 02009-10 N 2002.03 ri -U1 1991.92 roadblock to a more robust Local job market, with construction government -i and real estate jobs declining State,government � over the last year. Those sectors added jobs during the previous Federal, civilian recoveries. Other services, except public administration w Job growth over the last year Accommodation and food services looks a lot more like job growth experienced after Arts, entertainment, and recreation the 1990 -91 recession than after the 2001 recession Healthcare and social assistance (see Figure 4). Minnesota's Educational services payroll employment through ,t November 2010 was up 40,700 Administrative and waste services jobs in the 14 months since bottoming out in September Management of companies and enterprises Ill �t 2009. Fourteen months Professional, scientific, and technical services after the 1990 -91 recessions 50,100 jobs had been added to Real estate and rental and leasing c.. Minnesota payrolls. Minnesota's first and so far onlyjobless Finance and insurance recovery followed the 2001 Information MMMMM,90,4im recession, when just 1,700 jobs had been added 14 months Transportation and warehousing and utilities after bottoming outs Rdtailtrade _.�T,,;,;a While Minnesota has for now Wholesaletrade Wall dodged another jobless recovery and is again gaining a larger Nondurable goods manufacturing -------- share of the nations economic pie, the state's labor market has Durable goods manufacturing just begun to climb out of the (construction 6 deep job hole carved out by the Great Recession. The state Natural Resources and Mining needs three more years ofjob - 15;000 - 10,000 -5,000 0 5,000 10,000 15,000 growth similar to last year's pace to fully regain the jobs lost Source.: Seasonal adjustedempbyroentfiom the C ureenthoploymentShrobsors (CES)program in 2008 and 2009. Minnesota Deportment of Employment and Economic Development. ENDNOTES. Sen( Dare, "Moving on Up. The Great 1990s Minnesota Expansion, "Minnesota Rome micUsers, January 2004. ' more information on state personal income estimates by the Bureau of Economic Analysis can be found at hilp: / /www.bea.gov /reglonaUspll. ' To smooth out the monthly swings in Current Employment Statistics data, the three -month average surrounding the month when jobs bottomed out during the past recessions are compared with the three -month moving average 14 moNhs after adult recession. minne5ota economic TRENDS march 2011 NO MINNESOTA MIRACLE IEDC Agenda: 04/05/11 Consideration of an update relating to the Monticello Zoning Code regulations for Adult - Oriented Land Uses. (AS/NAC) A. REFERENCE AND BACKGROUND: A review of language pertaining to Adult- Oriented Land Uses was included within the base project scope of the recent comprehensive amendment to the Monticello Zoning Ordinance. In a long series of legal cases, adult entertainment and arts- related activities have come under the protection of the "Free Speech" clause of the first amendment. For this reason, the City has limited ability to regulate adult- oriented uses and must provide opportunity for their location. As such, the purpose of the City's adult use regulations is to provide for the establishment and operation of adult uses within the City while providing controls which limit negative impacts upon residential and commercial areas. In updating of the zoning code language for adult -uses, it was found that the City needed to complete a more detailed inventory analysis related to land area available for adult uses. This was due mainly to changes to the City's overall land area and boundaries, and the inability to include Xcel Energy's large I -2 zoned area within the area available for adult uses. These changes have raised the need to adjust zoning allowances and buffer distances to ensure that the ordinance continues to meet legal standards in this area. Consideration on how best to structure amendments to the zoning ordinance for Adult Uses relative to the land use analysis is underway by the Planning Commission. It is important that the City carefully construct its adult -use ordinance in order to minimize the potential for legal challenge of the code, which could ultimately result in the complete negation of the zoning ordinance. While the City completes the Adult- Oriented Land Use regulation amendment process, the City Attorney recommended an interim ordinance prohibiting the siting of new adult uses within the community. A moratorium ordinance was enacted by the Council on February 14th, 2011 to allow adequate time for review and development of ordinance language. The IEDC should be aware of the legal basis for the Planning Commission and Council's decision - malting regarding adult uses as both the previous and current code allow adult -uses within the industrial zoning districts. The location of adult -uses within industrial areas is common throughout the country and is primarily due to the fact that industrial land areas provide the largest contiguous amounts of land area that can be made available to these types of uses, with the least intrusion by buffering from "sensitive areas" such as schools, religious institutions, etc. Generally, the ordinance changes being considered by the City will not alter or impact the basic nature of industrial uses in the I -1 or I -2 areas. Rather, the code amendments will serve to balance the need to provide available land for adult- oriented uses while mitigating their impacts on surrounding land uses. IEDC Agenda: 04/05/11 On April 5th, the Planning Commission will consider two primary ordinance amendment alternatives relating to Adult- Oriented Uses. The first option utilizes the traditional 5% threshold approach. Five percent is a de facto percentage established as an appropriate level of available land area thorough a series of court cases. This approach is likely the "safest" approach, in regard to being able to defend the City's ordinance from a legal challenge. With a 275 foot buffer from sensitive uses, the current land use pattern would yield 5.07% of the City's net usable land area to the potential for adult uses. To follow this approach, the City would need to make the following changes: Amend the I -1, Light Industrial District to add adult- oriented uses as a permitted use, with the same conditions in the I -2 district. 2. Amend the regulations to provide that no parcel with frontage on I -94 would be eligible for an adult- oriented use. This amendment is intended to avoid the highest profile properties advertising such activities to the passing public. 3. Change the regulations to provide for a buffer distance of 275 linear feet, reduced from the current 700 feet. 4. Retain all other regulations as currently adopted. This approach assumes that the City will not want adult - oriented uses abutting the freeway, and calculates the opportunity area with this assumption. To accomplish this, an additional restriction would need to be added to the I -1 District which specifically prohibits their location on freeway- abutting parcels as a basic zoning restriction. To do this, the City would need to restructure its current two industrial districts into three districts. In short, task 2 above would be divided into the following subtasks: a. Create a new "I -3, Freeway Industrial District" which mirrors the uses in the original I -1, with no adult- oriented uses. b. Rezone properties with freeway exposure to the 1 -3 District (which has the effect of leaving them in the same position they are now). This is the preferred approach of the City Attorney's office. However, staff was concerned that the creation of a new base zoning district, changes to the current base district, and rezoning of several parcels would be confusing to the property owners, and cumbersome to administer. As a result, a second option was developed that relies on the "number of eligible adult- oriented parcels" approach which has been upheld in some of the cases cited by the Attorney. The second approach essentially creates a buffer of variable distance by establishing an ordinance that allows adult- oriented uses only on parcels that don't abut sensitive use parcels, IEDC Agenda: 04/05/11 overlaying portions of both the I -1 and I -2 Districts. Thus, the I -1 and 1 -2 Districts would provide for the opportunity for adult- oriented use on parcels that do not share a common property line with parcels zoned or used for residential, school, park, or have exposure to the interstate freeway. The net result of this approach would be a percentage of about 4% of the City's total area, and total number of as many as 45 separate parcels available. The City Attorney's office endorses this approach as being consistent with cases where restrictions have been successfully defended. Steps to accomplish this approach include mapping a specific area, rather than just relying on a buffer distance to define the potential area. Moreover, this approach would not change over time — a benefit in that it is more predictable, but potentially negative if the City does not monitor the introduction of new uses — such as a commercial daycare operation — into the district. To implement this approach, the Planning Commission would need to do the following: Remove adult- oriented uses as a pernitted use from the I -2 base district language. 2. Amend the current adult use regulations to stand alone as a separate overlay zoning district, with the chosen overlay district title. Map and adopt the overlay district for the designated area. This approach ends up being least disruptive to current property owners. The permitted uses of the base district do not change significantly, and nobody would need to have their property rezoned to reflect district language changes. To follow is additional general information for the IEDC regarding Adult- Oriented Land Uses, and the legal underpinnings of zoning related to these uses. The information has been assembled from research prepared by Northwest Associated Consultants and Campbell Knutson. ALTERNATIVE ACTIONS: No specific action is required by the IEDC. The information is provided to the IEDC for informational purposes. Again, the ordinance changes being considered by the City will not alter or impact the basic nature of industrial uses permitted in the I -1 or I -2 areas. IEDC Agenda: 04/05/11 QUESTION & ANSWER: ADULT USE ORDINANCE Q.1. Why does the City have an ordinance that allows these uses? A.1. In a long series of legal cases, entertainment and arts- related activities have come under the protection of the "Free Speech" clause of the first amendment — perhaps more descriptively thought of as "Free Expression ". As a form of expression with First Amendment protection, the City has limited ability to regulate adult - oriented uses. Q.2. Doesn't creating an ordinance allowing adult uses encourage their location in the community? A.2. Probably not. Purveyors of adult entertainment base their location decisions like any other business. These types of uses are allowed by nature of their first amendment protection — not having regulations would diminish the City's ability to manage where they go in the community. Q.3. Why don't we create an ordinance thatprohibits these uses? A.3. The courts have made it clear that such ordinances are unconstitutional as an illegal constraint on expression. If a City is found to have such an ordinance under a legal challenge, a court would throw out the City's code, and the adult use would have free rein to locate where they wish, without the City's ability to manage the impacts of the use. Q.4. Can we create an ordinance that includes these uses as potentially allowed, but limits their location in such a way that effectively zones them out of'the City? A.4. No. This would be called a "pretextual" ban — the City may regulate certain aspects of these uses, but may NOT have an ordinance that effectively bans them under the guise of "regulation ". A court would treat this type of ordinance the same as an outright prohibition. Q.S. Well then, what kinds of regulations can we adopt? A.5. In the area of speech regulation, the City typically has the ability create what are commonly called "time, place, and manner" regulations. As a general rule, the City may not discriminate by the content of the speech, nor may it discriminate by the identity of the speaker. However, the City can place non- discriminatory restrictions based on location, or on the style of delivery of a message, or on the duration or tinning of a message in the protection of public health, safety, and welfare. In addition, the City may prohibit "obscene" speech. Thus, an adult use establishment which is otherwise properly located may be prohibited from displaying messages that are judged to be obscene. Q.6. What do you mean by `properly located "? A.6. A number of US Supreme Court cases have addressed this issue. The most relevant is City of Renton, WA v. Playtime Theatres, a case that arose in Renton, Washington over a IEDC Agenda: 04/05/11 challenge to the City's ordinance regulating the location of adult theatres. In Renton, the Court majority established that the City's regulations were not regulating the content of the speech, but rather, regulating the "secondary effects" of that speech which might be imposed on the public, especially populations judged to be sensitive to these effects. Renton's ordinance, and the court opinion validating it, established a number of standards for the regulation of adult- oriented uses. Cities were granted the ability to regulate the location of these establishments to mitigate the potential secondary effects of such uses. Q.7. What kinds of regulations can the City adopt? A.7. Essentially, the City can create restrictions by zoning district that limit the ability of the establishments, or the patrons of the establishments, to have an impact on defined sensitive populations. These usually take the form of defining the uses, specifying which zoning district such uses can be located in, and then creating a buffer zone from sensitive land uses that the City wishes to protect from the secondary effects of the establishment. It is critical to note, however, that the zones and the buffers need to be placed in such a way that adult use have a "reasonable" opportunity to locate in the community (see the comment on "pretextual" prohibitions above). Q. 8. How much "opportunity" does our ordinance have to provide to avoid being considered a `yretextual "prohibition? One lot? An entire shopping center? A. 8. Unfortunately, this is where the requirements are a little murky. The court's standard in Renton was a "reasonable" opportunity, a preciously minimal guide. In Renton, Washington, evidence was introduced that the ordinance regulating adult uses created an opportunity area of 5% of the City. The courts found this area to be meet its' standard of reasonableness. In the years since, many communities have confused the 5% threshold as some sort of silver bullet standard. It is not. However, it is the only real guidance we have, so we think of it as a good target to show evidence of reasonableness. Coming too far short of that threshold should raise some questions about the effect of the ordinance in illegally regulating expression. Q.9. What are these sensitive uses we can protect? A.9. Monticello's ordinance is typical, listing the following: • Residentially zoned property. • Agricultural land located in the neighboring township or in the City that is guided for residential use. • A licensed daycare center. • A public or private educational facility (elementary, middle, junior high or senior high school). • A public library. • A church. • Amusement places such as roller rinks, dance hall and bowling alleys. • Liquor sales (establishments) IEDC Agenda: 04/05/11 Q.10. How much buffer can we leave from these uses? A.10. Monticello's current ordinance provides a 700 foot buffer. Others rely only on the zoning district boundaries, and several ordinances use 100 feet or some increment as their buffer zone. The balancing act is to provide some separation, while continuing to provide a reasonable opportunity area. Q.11. What if all of the land we provide is taken up by buildings and current uses? A.11. The courts have been clear that it is not the City's responsibility to play realtor for the adult use establishment — they must fend for themselves in the real estate market and if all properly zoned and located parcels are full, that's the market working, not the ordinance, just as it would be for any other business looking to locate in a particular zoning district. Q.12. What do we need to do? A.12. Because staff, including the City Attorney, believe that the Xcel Energy property is not likely to be considered "eligible" due to Nuclear Regulatory Commission requirements, not to mention its proximity to large areas of parkland, the remaining I -2 zoned land provides less than 3 percent opportunity area, and just over 1 percent when the current 700 foot buffer is applied. The challenge will be to find some combination of buffer distance and increase in the area of properly zoned parcels to get to "reasonable" — in general, something closer to 5 %.