This is a zone change request for a property at the intersection of Lake Elmo Drive and Josephine Drive in Billings Heights. The existing zoning is Residential Multi-family (RMF) and the proposed zoning is Community Commercial (CC). The equipment repair business and the storage yard for boats & RVs, were made non-conforming uses when the county adopted the RMF zoning for the property in 1973.  The zoning was not changed when the city annexed the property in 1984. The owner now is trying to sell the parcel and would like to remove the cloud of legal non-conformity. The legal description of this 1.72-acre parcel is Lot 15 of Josephine Subdivision, less 3,167 square feet for Lake Elmo Dr. The property is owned by Orville Kurtz and the agent is David Goodridge. A pre-application meeting was held at the subject property on April 27, 2018. The Zoning Commission held its public hearing on June 5, 2018 and is forwarding a recommendation of approval. 

Zone Change applications are reviewed using statutory criteria referenced in the Alternatives Analyzed section of this memo. Zone Changes require approval through an ordinance. Zone Changes allow the change from one type of zoning district to another types of zoning – e.g.. residential single family to residential multi-family or residential to commercial. A Zone Change cannot have conditions of approval and if approved, permits the owner to use the land for any purpose allowed within the zoning district.

City Council may:

• Approve the zone change and adopt the findings of the 10 criteria as recommended by the Zoning Commission;
• Deny the zone change and adopt different findings of the 10 criteria;
• Allow the applicant to withdraw the zone change; or
• Delay action on the zone change request for up to 30 days.

Prior to making a decision on the proposed zone change, the City Council shall consider the following findings of the 10 review criteria:
1.   Is the new zoning designed in accordance with the Growth Policy?
The proposed zone change is consistent with the following guidelines of the 2016 Growth Policy:

• Strong Neighborhoods: Neighborhoods that are safe and attractive and provide essential services are much desired.

The proposed zoning will allow the owner to sell the property without the burden of a non-conforming use. The new owner can continue the commercial use of the property in conformance with the zoning regulations. The new owner, City Cab, needs a property where there is space to store the cab fleet, do minor repairs and maintenance on the vehicles and where the business owner can reside. This property provides these essential qualities. Cab and taxi service is in high demand in Billings, where the aging population will need to rely on alternative modes of transportation in the decades to come.

• Prosperity - A diversity of available jobs can ensure a strong Billings’ economy; Retaining and supporting existing businesses helps sustain a healthy economy

The proposed zoning will allow the new owner to re-locate within the city limits in order to sustain and grow his business. Transportation services provides a strong economic foundation for the Billings community. Supporting and retaining existing transportation companies is a goal of the 2016 Growth Policy.

• Prohibit high intensity commercial development in residential areas by implementing the preferred future land use map for the Heights Neighborhood Plan to guide development through zoning requests.

The 2006 Billings Heights Neighborhood Plan adopted a preferred land use map. The area between Lake Elmo Drive and Main Street was designated as a commercial mixed use area. The proposed zoning aligns with the preferred land use map.

2.   Is the new zoning designed to secure from fire and other dangers?
The new zoning, as do all standard zoning districts, requires separation between buildings and setbacks from property lines. This should provide security from fire and other dangers.
 
3.   Whether the new zoning will promote public health, public safety and general welfare?
Public health and public safety will be promoted by the proposed zoning. The property has been a legally non-conforming use of land since 1973 – 45 years. A property with this type of legal limitation on its entitlement can bring down adjacent property values. Property owners tend not to invest, re-finance or upgrade these properties due to the inherent financial difficulties. Providing this property with a conforming zoning district will support the general welfare by taking this property out of financial jeopardy.
 
4.   Will the new zoning facilitate the adequate provision of transportation, water, sewerage, schools, parks and other public requirement?
Transportation: The proposed zoning will not have any effect on the existing transportation system.
Water and Sewer: The City provides sewer and the Billings Heights Water District provides water to the property. There will be no additional impacts to the system from the proposed zoning.   
Schools and Parks: Schools and parks should not be affected by the proposed zoning. 
Fire and Police: The subject property is served by city public safety services. The Police and Fire Departments had no concerns with the zone change.
 
5.   Will the new zoning provide adequate light and air?
The proposed zoning provides for sufficient building separations to allow for adequate light and air.
 
6.   Will the new zoning effect motorized and non-motorized transportation?
The new zoning will have no effect on transportation systems.
 
7.   Will the new zoning promote compatible urban growth?
The new zoning does promote compatibility with urban growth. The proposed zoning will allow this parcel to be sold without the legal and financial burdens of a legal non-conforming land use. The property, and the businesses located here, are part of the fabric of this area of Billings Heights. The area between Main Street and Lake Elmo Drive is recognized as an area for mixed uses including residential, offices, service businesses as well as retail businesses.  
 
8.   Does the new zoning consider the character of the district and the peculiar suitability of the property for particular uses?
The proposed zoning does consider the character of the district and the suitability of the property for the proposed use. The proposed zoning is identical to the zoning north of the subject property and is an appropriate zone with the adjacent businesses and collector streets.
  
9.   Will the new zoning conserve the value of buildings?
The value of existing buildings and the parcel will be improved and conserved by the proposed zoning. The existing zoning would not allow the reconstruction or re-use of some of these building except for an identical use.
 
10. Will the new zoning encourage the most appropriate use of land throughout the City of Billings?
The proposed zoning will encourage the maintenance and sale of the property by allowing new and similar uses. This is the most appropriate use of the land at this location

If the zone change is approved, it could improve the property and market values of the subject property. Investing, selling or completing improvements to a property that is not correctly zoned can be difficult and can artificially depress the property value. If the zone change is not approved, the owner would need to sell to an owner who is willing to conform to the existing multi-family residential zoning or continue to use the property for RV & boat storage and a single family residence.  

The proposed zoning, Community Commercial (CC), will allow the owner to sell the property without the financial and legal burden of its legal non-conforming status for zoning. The new owner can continue the commercial use of the property in conformance with the new zoning district designation. The new owner, City Cab, needs a property where there is space to store the cab fleet, do minor repairs and maintenance on the vehicles and where the business owner can reside. This property provides these essential qualities. Cab and taxi service is in high demand in Billings, where the aging population will need to rely on alternative modes of transportation in the decades to come. When this property was zoned RMF in the County in 1973, Mr. Kurtz's business, Heights Equipment Repair, had already been in business for at least a decade. The business has been a legal non-conforming use since 1973. Mr. Kurtz has retired and would like to sell the property.

The property is located at the intersection of Lake Elmo Drive, a collector street and Josephine Drive, a local street. Property to the north is zoned CC and has been used by the Long Brothers for warehousing, storage for a trucking company and heavy contractor's storage. This business to the north has existed before zoning was adopted in 1973. Property to the east, south and west across Lake Elmo Drive is zoned Residential Multi-family (RMF). These properties are developed for single family and multi-family dwellings. Lake Elmo Drive carries about 11,000 vehicle trips per day, a heavy traffic load for a collector street. The city re-built Lake Elmo Drive about 10 years ago to add curbs, gutter, sidewalk, a center turn lane, and a multi-use path. Prior to this reconstruction, Lake Elmo Drive had no sidewalks, curbs or gutters in this section. Josephine Drive provides an east/west connection between Main Street and Lake Elmo Drive. A one-time traffic count over 10 years ago, showed about 1,500 vehicle trips per day. Josephine Drive has only a 20-foot paved street section without curb, gutter, parking lanes or sidewalks.

The legal non-conforming uses and status of the property makes it difficult to insure, maintain, sell, re-finance or invest in property improvements. A non-conforming property tends to become neglected due to these substantial legal and financial difficulties. It also tends to bring down adjacent property values due to this dis-investment. The proposed zoning will alleviate this burden and allow the property to stabilize as a conforming use. The site does not meet the city's current site development standards for issues such as storm water management, parking, paving, screening and landscaping. Any new buildings or significant changes in use will trigger compliance with some or all of these site development requirements. The proposed use, City Cab, is not significantly different than the prior use by Mr. Kurtz.
 

The Zoning Commission held its public hearing on June 5, 2018, and received the staff recommendation of approval and testimony from the agent, David Goodridge. Testimony was also received from 2 surrounding owners; Judy Johnson of 429 Lola Lane and Sue Cozzens of 416 Lola Lane. Ms. Johnson and Ms. Cozzens testified that their biggest concerned involved reduction in their property value if the zoning is change to commercial zoning. Ms. Johnson stated she has lived at 429 Lola Lane for the past 45 years so she cannot afford to lose any value to her property and she knows of people who have suffered a property value loss due to a commercial zone change. Mr. Goodridge stated the contract purchaser will be using the property as it has been used for the past 52 years, but the zone change would make those activities legally conforming.

Commission member Larson stated he believes there is no firm conclusion on the question of whether commercial zoning adjacent to residences negatively effects property value. He stated it would depend on whether the development is built to current zoning, building and development standards. Mr. Larson stated in general any new development adds value to the surrounding property regardless of its use or zoning district. Commission member James Mariska stated if the zoning is approved, higher and better uses of the property will occur incrementally over time and should help clean up the area. Commission member Larson stated it is not likely a bar or casino would want to locate on this parcel at any time in the future. He stated the City Council would not be inclined to waive the required 600-foot separation distance to the school and playground less than 200 feet away. Commission Chair Dan Wagner stated the city has adopted regulations (2012) to better control commercial activities on property near residential zones including limiting lighting, noise, requiring screening and buffering. Commission member Dennis Ulvestad stated he would not be voting in favor of the zone change. He stated the proposed zoning has too much potential to impact the neighbors.

Commission member Michael Larson made a motion to recommend approval and adoption of the findings of the 10 review criteria and the motion was seconded by Commission member James Mariska. The Commission voted 3 to 1 to approve the motion.

The Consistency with Adopted Policies or Plans is discussed in the Alternatives Analyzed section above.