Settlement Reached on Land in Commercial Zone

I am happy to announce that on May 1, 2018, the City Council approved a settlement agreement to resolve a lawsuit with developer Cedar Hills Farmland, LLC and the property owner regarding the development of land located in the city’s commercial zone just south of Walmart. This piece of land has been in a litigation status since 2015 and the settlement will allow all parties to be fully released from all claims in connection with the development of the property.

Under the terms of the settlement agreement, the parties agree in concept to a proposal submitted by the developer to develop the property as a single-family planned unit development with up to 80 single family lots, 14,000 square feet of open space, and a 7,000 square foot commercial pad with associated parking. As part of the agreement, the city will consider formal action approving a new zoning district to accommodate the development, a development agreement, and preliminary and final subdivision plats. These items will be on a future agenda for the Planning Commission and City Council.

Background

In 2013 Mr. Doug Young and representatives of the Smart family approached the city regarding the development of 11 acres owned by the Smart family and located in the city’s commercial zone. The original presentation included a five-story congregate care facility (55+ housing) on the Smart property and commercial/retail businesses located on the nine acres owned by the city, which is located on North County Blvd south of Harts. After several meetings with staff, Planning Commission, and elected officials to discuss the allowed uses in the zone, the application submitted by Mr. Young was to develop only the 11 acres of property owned by the Smarts and included a 291-unit 3-story congregate care facility and three commercial buildings.

During the discussions that occurred before and after Mr. Young submitted his application, a concern that was frequently raised was whether the congregate care facility was allowed per city code. The code stated that in the mixed-use office/retail zone, which included most of the Smart property, residential was only allowed if it was less than 50% of the building, was ancillary to retail, and was located on the upper levels of the building, not the main level. The only exception to this was assisted living facilities, which did not need to have a commercial component. As Mr. Young’s congregate care facility did not have any retail/commercial located in it, and as congregate care was not an allowed use in the zone, his proposal did not comply with city code.

Mr. Young indicated that he was willing to change his facility to be assisted living instead of congregate care, however, the feedback he was receiving from some members of the community was that congregate care was preferred over assisted living. For uses that are not expressly mentioned in city code, the City Council can make a determination on whether a project is “substantially similar” to something that is allowed or disallowed in code. On December 2, 2014, Mr. Young’s representative approached the Council and asked them to decide whether the congregate care facility being proposed could be considered substantially similar to an assisted living center, which is allowed in the mixed-use office/retail zone. After much debate, the Council voted 3-2 to allow congregate care to be treated as assisted living.

Once that decision was made, the Council was required by law to approve the congregate care facility but could impose conditions in order to address any adverse impacts the development would have on the community. The preliminary plans submitted by the developer included 291 housing units in the congregate care facility and three commercial buildings in the retail portion of the land. The layout presented is below.

Based on studies provided by the developer and performed at the request of the city, the Council approved the project on November 17, 2015 subject to fourteen conditions, which the city later reduced to ten. These conditions were all based on city code and included:

  1. Limiting the project to no more than 165 units;
  2. Requiring the congregate care facility to provide on-site services such as meals, healthcare, fitness classes, and social activities so that the facility was operating similarly to an assisted living center;
  3. Requiring 1.4 parking stalls per residential unit;
  4. Prohibiting outdoor overnight parking in areas adjacent to existing single-family homes, with covered parking provided in those areas;
  5. Requiring landscaping and open areas with linked pedestrian corridors designed to promote pedestrian activity and a walkable area;
  6. Constructing of the development in phases that include both commercial and residential components in order to keep with the intent of the commercial zone;
  7. Reducing the size and scale of the building to comply with the maximum density of 165 units;
  8. Requiring that each unit be occupied by at least one resident who is 55 years of age or older and not allowing for residents younger than 25 years of age;
  9. Requiring parking lights adjacent to single-family homes be low to the ground in bollards rather than on light poles; and
  10. Final approval of the project being made by the Planning Commission and the City Council.

Mr. Young appealed all conditions stating they were illegal and not supported. As part of the appeal, Mr. Young and the city agreed to both submit arguments to the State Land Use Ombudsman for an opinion. While the opinion of the Land Use Ombudsman is not legally binding, the opinions of this office closely align with what a court will eventually decide. Additionally, both parties must agree that once the Ombudsman provides an opinion and either party decides to go to court, the losing party must pay attorney’s fees for both parties.

On December 28, 2017, the Land Use Ombudsman provided an advisory opinion. The only conditions upheld were the requirement of 1.4 parking stalls, the requirement to have covered parking adjacent to single-family homes, and the requirement for bollard lighting instead of pole lighting in parking areas adjacent to single-family homes. All other conditions were dismissed as unlawful and unenforceable.

Settlement

After the Ombudsman’s opinion was released, Mr. Young requested a meeting with the city’s attorney to discuss a possible settlement. In the end, the settlement agreed on by the City Council and Mr. Young was for a residential community consisting of 80 single-family homes, 14,000 square feet of open space, and a 7,000 square foot commercial building. While this changes the use of that land from commercial to residential, the city agreed to the settlement for several reasons.

  1. Based on the Ombudsman’s opinion, the city’s chances of prevailing in court on all 10 conditions were slim. Whether the city was required to approve the 291-unit congregate care facility or agreed to the settlement, the land would be used for residential purposes, not commercial.
  2. Throughout this process, the number one concern heard from residents was related to the density of the project. The settlement lowered the number of housing units from 291 to 80.
  3. The original project was for a large facility of leased units as a senior apartment complex. The new agreement will be homes that are purchased, not leased.
  4. The layout and use of the land with the settlement matches the adjacent residential area, whereas the 291-unit congregate care facility would be very dense and would be the tallest building in the city. The proposed zone change under the settlement agreement better fits with the rest of the community and the surrounding area.

Next Steps

The developer of the project will go through the subdivision approval process as outlined in city code, which means they will submit plans to the Planning Commission and the City Council for review. Additionally, the rezoning of this land for residential use will go to the Planning Commission and City Council. The concept plans provided by the developer at this point are provided below, though these plans could change as it goes through the approval process. However, the number of houses will not exceed 80 and the size of the commercial building will remain the same. Additionally, this will be an HOA community and the intent of the developer is to market it as a 55+ HOA.

While the original intent of this land was to serve as a commercial district for providing residents with retail goods and services, we are pleased that the resolution consists of 80 individually-owned homes instead of the original proposal of a 291-unit senior residential facility with leased units. I appreciate the feedback we received from residents throughout this process, and the help of our staff and legal team to finalize an agreement that satisfied all parties. We look forward to welcoming a new neighborhood into our community and adding some additional retail space to our commercial zone.

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