This is a zone change request from Neighborhood Commercial (NC) to Planned Development with underlying NC, to allow 1 microbrewery license and 1 restaurant beer & wine license (no gaming) on a 3.6 acre parcel of land north of Grand Avenue and west of 54th Street West. Planned Development zone changes may include some standard zoning provisions for uses, setbacks and site development but generally each Planned Development zone change is tailored for specific uses on a specific parcel. The property is currently un-developed and sits adjacent to the Cottonwood Grove neighborhood to the north. The legal description of the parcel is Lot 4, Block 1 of the MK Subdivision. The property owner, MYK LLC (Patricia Kramer) is represented by Scott Aspenlieder of Performance Engineering. The prospective buyers are Michael and Tyler Schmechel who own and operate several similar businesses in Billings. A pre-application neighborhood meeting was held on August 27, 2018, at Grace Montessori School and a Preliminary Review meeting was held on September 26, 2018. The Zoning Commission conducted its public hearing on November 7, 2018, and is forwarding a recommendation of denial on a vote of 1 in favor and 4 opposed to a motion to recommend 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 Planning Staff to 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 findings of the 10 review criteria.

The Zoning Commission voted against a motion to recommend approval. The motion was made by Commission Member Larson, seconded by Commission Member Boyett and was based on the Planning Staff's recommended findings of the 10 review criteria. The Zoning Commission members who voted against the motion did not articulate any specific changes to the proposed findings. Zoning Commission members made general statements about why they intended to vote against the motion to approve the zone change.

Zoning Commission Member Dennis Ulvestad stated he was voting against the motion because he believed the applicant was using deceptive practices to gain a capital advantage over the new restaurant, bar & casino (The Lion's Den) that will be opening soon directly south of the subject property. Commission Member Ulvestad stated there was property available for sale that is properly zoned for the proposed use. This properly zoned lot is on the corner at 54th St W and Grand Avenue just east of the new Lion's Den location. Commission Chairman Dan Wagner stated he lives in the West End, does not mind driving to get services or groceries or dine out, and he would not want this use anywhere near his neighborhood. Commission Member Mike Boyett stated he believed this would set a precedent to encourage more Planned Development zone changes to accomplish the "one-off" uses of land not normally allowed. Commission Member Michael Larson stated he was torn on this application. He stated he understood the neighborhood's hesitancy to accept this type of use and zone change. Commission Member Larson stated he had experienced a similar issue when he lived near Rehberg Lane and Grand Avenue in 1997. He stated MacKenzie River Pizza wanted to open a restaurant with a beer & wine license at 3025 Grand Avenue. He stated there was quite a bit of neighborhood concern at the time about increasing crime, drunk driving, robbery, trash and declining property values. Mr. Larson stated none of these predictions came true and he enjoyed being able to walk to a casual dining spot with his family. He stated he believed the same would happen here at 54th St W and Grand Avenue.

Commission Member Larson made a motion to recommend approval and adoption of the staff's proposed findings of the 10 review criteria and the motion was seconded by Commission Member Boyett. The Commission voted 1 in favor (Michael Larson) and 4 opposed to the motion. The Commission did not articulate any specific findings on the 10 review criteria other than the statements of the Commission members during the debate.

The findings below are the proposed findings forwarded to the Zoning Commission by city staff.

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:
Community Fabric:

• Developed landscape areas in commercial areas encourage more pedestrian activity and vibrant commercial activity
• Attractive streetscapes provide a pleasant and calming travel experience in urban and suburban neighborhoods
• Outdoor public spaces provide casual and relaxing gathering areas for people
• Planning and construction of interconnected sidewalks and trails are important to the livability of Billings

The proposed zoning will allow the owner to sell the property to the buyer who is interested in creating 2 new businesses with enhanced site development requirements to encourage pedestrian activity, enjoyment of outdoor spaces in a casual and relaxing atmosphere. The proposed PD will restrict uses that do not contribute or enhance these place-making activities.
 
Strong Neighborhoods:

• Walkable neighborhoods that permit convenient destinations such as neighborhood services, open space, parks, schools and public gathering spaces foster health, good will and social interaction

The proposed zoning requires provisions for all modes of travel to and from the property and site development requirements to increase outdoor activity.
 
Prosperity:

• A diversity of available jobs can ensure a strong Billings’ economy;
• Retaining and supporting existing businesses helps sustain a healthy economy
• Successful businesses that provide local jobs benefit the community

The proposed zoning will allow the new owners, Michael and Tyler Schmechel, to locate within the city limits in order to sustain and grow their business. Craft brewing and family oriented restaurants that offer outdoor casual dining and activities are a growth business in Montana. The local economy benefits from a diverse offering of community and neighborhood services.
 
The proposed zone change is consistent with the following guidelines of the 2001 West Billings Neighborhood Plan:

• Promote efficient utilization of land within the West Billings planning area by promoting well designed, more pedestrian friendly, urban development patterns with a mix of uses and an efficient, creative use of land.
• Shorten automobile trips by locating non-industrial commercial development in close proximity to residential areas.
• Limit “community” commercial centers to appropriate intersections of arterial streets and spaced no less than approximately two miles apart. Community commercial centers should be compatible with the surrounding area and designed to serve the overall West Billings community unless otherwise approved by the governing bodies.

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 PD provides for limitations on potentially incompatible uses – auto supply stores, gas stations, convenience stores and similar uses currently allowed by the NC zoning district.
 
4.   Will the new zoning facilitate the adequate provision of transportation, water, sewerage, schools, parks and other public requirement?
Transportation: The proposed zoning should not have any effect on the existing transportation system. An update of the existing TAS for the subdivision may be required by the City Traffic Engineer at the time a building permit is submitted.
Water and Sewer: The City provides water and sewer 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 should have no effect on transportation systems. The PD provides for an off system bike trail along the northern property line and requires bicycle parking facilities for each development within the PD.
 
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 developed with an in-demand type of dining and relaxation experience. Additional development within the 3-acre parcel will include other compatible uses.

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 tailors the underlying zoning of NC to provide 2 additional uses but prohibits many other uses normally allowed in the NC zone. The PD also has operational restrictions to respect and protect the adjacent neighborhood.
 
9.   Will the new zoning conserve the value of buildings?
There are no buildings on the subject parcel. The value of surrounding buildings (north and south) may be improved by the proposed development. Marketability of adjacent property is not included within this review criteria.
 
10. Will the new zoning encourage the most appropriate use of land throughout the City of Billings?
The proposed zoning will encourage an appropriate use of land in this part of Billings.
 

If approved, the property will likely be developed within the next 2-3 years. This will add value to the property tax base. It is not known at this time how much value this would add, but it will increase the property taxes and the city assessed fees based on a non-vacant parcel. This increase in property taxes and fees may be off-set by new service demands based on the new development. No city agency expressed concern with providing service to this property.

If the zone change is not approved, the property cannot propose another zone change for 12 months. The prospective buyer may not purchase the property, and the owner would put the property back on the market. No additional tax or fee revenue would accrue unless the property was sold and developed under its current NC zoning.

The proposed Planned Development (PD) zone would keep the underlying NC zoning, add the use to allow 1 microbrewery and 1 restaurant beer & wine license, restrict other uses as well as place strict requirements for landscaping, signage, operational requirements and buffering for adjacent residences on the future development of the property. The property does not have direct access to an arterial street but is within a commercially zoned subdivision consisting of Community Commercial (CC) zoned lots and NC zoned lots. There is a completed residential subdivision to the north - Cottonwood Grove. It is also currently adjacent to land outside the city limits zoned Agriculture Open-Space (A-1). The adjacent county land is in the same ownership as the subject property.

Microbreweries (manufacturing less than 1,500, 31-gallon barrels per year) are only allowed by right in the Community Commercial (CC), Highway Commercial (HC), Central Business District (CBD), Controlled Industrial (CI), Heavy Industrial (HI), EBURD districts and South 27th Street Corridor zones. Microbreweries manufacturing more than 1,500, 31-gallon barrels per day require special review approval in the CC, HC, CBD and S. 27th Street Corridor zones. Microbreweries and other alcoholic beverage makers are regulated by the Montana Department of Revenue Liquor Licensing Division. State law allows microbreweries to have a "tap room" or sample room where patrons may consume up to 48 ounces of the brewer's product during limited serving hours (MCA Title 16, Chapter 3). There are 8 listed craft brewers in Billings and 3 distilleries. Montana is listed 3rd in the nation for number of craft brewers per capita according to the Brewers
Association, a U.S. trade group.

Restaurants that offer service of beer and wine are not allowed uses within the NC zoning district. These restaurants are only allowed in the CC, HC, CBD, CI, HI, EBURD Districts and the South 27th St. Corridor zone. These restaurants are also required to maintain a minimum separation of 600 feet (measured property line to property line) from churches, schools and public parks with playing fields or playgrounds. This location is not within 600 feet of any of these uses. Restaurant beer and wine licenses do not have any ability to add video gaming or gambling of any type.

The proposed PD zoning district will retain the underlying NC zoning and intends to allow only 1 (one) microbrewery license and only 1 (one) restaurant beer and wine license on the entire 3.6 acre parcel. The PD zone also proposes to restrict certain uses normally allowed in the NC zone including out-patient veterinary clinics, sand and gravel mining, all other food or beverage makers, pipelines and other utility transmission infrastructure including any wireless antennae, convenience stores or gas stations, auto supply stores, hotels, motels, or campgrounds, laundromats, dry cleaners, funeral homes, public parking lots (as a primary use) and modular built dwellings (Article II of the draft PD). The proposed PD limits the outdoor seating areas for both the microbrewery and the restaurant and dictates that all outdoor activities will cease at 9 pm. The PD proposes to prohibit all electronic message signs, neon signs, balloon signs, roof signs, and strings of pennants or flags. The PD states all signs except for 1 (one) sign must be wall signs placed on buildings. The 1 (one) freestanding sign is allowed for each developed parcel of land.

Site lighting and landscaping are also proposed for strict regulation including limiting all outdoor light standards to 15 feet maximum height and requiring full shields on all outdoor lights except street lighting. The PD dictates a minimum 25-foot wide landscaping buffer be maintained along the entire north property line adjacent ot Cottonwood Grove Subdivision. The landscaping requirements also include the use of 2-inch caliper trees, water saving drip irrigation, and reduced amounts of off-street parking (1 per 200 sf of floor area) to minimize asphalt areas.

The PD was presented to the surrounding property owners at a pre-application meeting on August 27, 2018. The application was received by the Planning Division in September and a preliminary review meeting with the applicant, the surrounding property owners, and other City staff was held on September 26, 2018. Meeting notes from the pre-application meeting and the public comments received via email and letter are included as attachments. Only city staff and the applicant attended the Preliminary Review meeting on September 26, 2018.

Several surrounding property owners, as well as property owners in the general vicinity, have expressed concerns with the proposed PD. The primary concern appears to focused on the availability of alcohol at this location. Secondary concerns stated were about "bars" in general, gambling (casinos), crime generated by locations that serve alcohol and impaired or drunk drivers. Five of the 21 letters of comment were concerned with additional traffic generation, noise and lighting. Three of the 21 letters were either in support of the proposal or neutral. There were a few concerns about the effect of having a commercial-type land use adjacent to high value homes in lower density suburban neighborhoods. The letters of comment from surrounding owners are included as an attachment.

Traffic on Grand Avenue and 54th Street West is increasing as new city and county subdivisions are constructed in the area. Traffic counts in 2018 on these nearby arterial streets are about 8,700 vehicle trips per day on Grand Avenue and about 3,500 vehicle trips per day on 54th St. West. These are low traffic volumes for fully constructed arterial streets, however neither Grand Avenue nor 54th St. West are constructed to a full arterial street section. Both roads are partially within the city limits and have large sections that are still within the county's jurisdiction. This has historically made it difficult for either governing body to make substantial road improvements to handle increasing traffic volumes.

The most recent traffic study completed for the West End was the 2016 West Billings Multi-Modal Planning study to determine where existing traffic flow and safety is deficient and where improvements may be necessary in the future. The intersection of Rimrock Road and 54th Street West was determined to have an existing safety concern with the volume of traffic. This intersection is about 1 mile north of the subject property and a traffic light is now installed at this intersection to improve pedestrian and motorist safety and circulation. Two other nearby intersections at Grand and 48th Street West and Grand and 56th Street West were also identified as deficient and in need of a traffic signal improvement or a roundabout. The study also concluded most of the major streets in West Billings are not conducive to use by pedestrians or bicyclists due to narrow shoulders, no separated pedestrian or bicycle paths, and high travel speeds. The study identified 2 corridor improvement projects to complete the upgrade of Grand Avenue from Shiloh Road through to its intersection with 62nd St West. A short section of Grand Avenue corridor was improved and the traffic signal installation was completed on Grand Avenue at 54th Street West to coincide with the opening of Ben Steele Middle School at 5640 Grand Avenue. The 2016 study analyzed crash data in the area from 2010 through 2015. The study predicted current and future traffic patterns based on steady or aggressive growth and land use patterns. The executive summary of this plan is included as an attachment.

The property can be served by all city utilities and other city services exist in the area including police and fire. The West Billings  Neighborhood Plan (2001) anticipated a "community center commercial node" for a proposed 4-way intersection at Grand Avenue and 56th St West. The northern leg of this 4-way intersection was abandoned and the intersection was split between 54th St. West (north of Grand) and 56th St. West (south of Grand). In this new configuration, a community center commercial node is no longer possible. The commercial node here is more oriented to neighborhood level commercial services with some provision on the east side of 54th St. West for community retail services such as the proposed Albertson's. The proposed PD zone change would introduce 2 uses in the existing NC zone that are not currently allowed but also eliminates currently allowed uses that could have a larger detrimental effect on the neighbors in the Cottonwood Grove Subdivision to the north. The PD also sets minimum standards for landscaping, lighting and signage that are above the "standard" site development requirements for allowed uses in the NC zone.

The Planning staff reviewed the proposed final draft of the PD zone change and recommended approval to the City Zoning Commission. The Commission did not concur with this recommendation.The Zoning Commission voted 1 in favor and 4 opposed on a motion to recommend approval. The Planning staff recommendation was based on a proposed finding the use and zone is compatible and conforming to the City's adopted 2016 Growth Policy, including the 2001 West Billings Neighborhood Plan. Staff found the proposed limitations in the  PD would allow the proposed and potential uses of the property to fit in with the existing and future land uses in the area.

Limitations imposed in the Draft PD-NC zone include grocery or food retail stores, auto dealers or gas stations, hotels, rooming houses or modular dwellings of any kind. The PD also prohibits gambling, adult entertainment, laundromats or dry cleaners, auto repair or auto supply as well as neon lighting or electronic message center signs. The PD proposes operational restrictions so any outdoor activity at any location on the property must cease by 9 pm, and any outdoor pole lighting is fully shielded. The number of potential patrons on a daily basis to the microbrewery is an unknown at this point in time, however, state law limits how much beer can be sold or given away at any microbrewery sampling room. This limitation is meant to prevent sampling rooms from becoming a "bar", and would necessarily limit the number of patrons at the sampling room on a daily basis. Brewers may only serve what is produced on site or at an affiliated brewer's facility. Traffic volume to this location is not known due to the developing nature of the subdivision. A traffic impact study was submitted with the original MK Subdivision and would have to be updated based on the proposed uses. The original traffic study was based on the zoning and probable uses allowed within those zoning districts. Some uses "capture" drive by traffic and other uses create more traffic as destination points. The proposed uses will be destination points for calculating traffic and whether any addition traffic control measures are needed. All access to and from Grand Avenue and 54th Street West is already existing. No new access driveways to these 2 arterial streets will be allowed.

The Zoning Commission conducted its public hearing November 7, 2018, and received the staff report, testimony from the agent, Scott Aspenlieder and prospective buyers, Michael and Tyler Schmechel. In addition to the written comments received, the Commission received public testimony from Terra Pierce, owner of the Lion's Den at 1411 Chy Way (under construction), Tiffany Wardell of 1309 Daybreak and Chair of the West End Task Force, and John Woods of 3521 Tommy Armor Circle. Ms. Pierce and Ms. Wardell testified in opposition and Mr. Woods testified in favor.

Mr. Aspenlieder stated the proposed zone change was to allow the proposed use for a microbrewery and family oriented restaurant on the west side of the property. He stated the Planned Development was intended to ensure the compatibility of any uses with the adjacent residents and land owners. He stated they received good comments and suggestions from those adjacent owners and made changes to the PD based on those comments. He stated the only suggestion they did not incorporate was to include a 10-foot high brick wall around the entire parcel. He stated the PD will require any new building to be on the southern 2/3 of the property including any other buildings besides the microbrewery and restaurant building. He stated the only area with alcohol sales or brewing will be for the site shown on the concept drawings. If the owner creates additional building lots, those lots are not entitled to additional alcohol sales or brewing. Only 1 microbrewery and only 1 restaurant that serves beer and wine will be allowed on the 3.6 acre parcel. In response to a question from Commission Member Dennis Ulvestad, Mr. Aspenlieder stated the reason for choosing this lot and this location was due to the increasing number of residents in the West End (rooftops) and the area was already zoned in a commercial node. He stated the prospective owners were interested in this lot because it was away from the speeding traffic on Grand & 54th St W.

Mr. John Woods of 3521 Tommy Armor Circle testified in favor of the zone change. He stated the West End has waited a long time for local services and he would like to have nearby casual dining as well as other commercial services in the area.

Michael Schmechel, prospective buyer, testified in favor of the proposed zoning. He stated this area is already a commercial node and the proposed PD was just to allow the 1 microbrewery and 1 restaurant that serves beer and wine. He stated millennials want walkable neighborhoods and with no or few services in the area, this would fill a need in the area. He stated the development of the rest of the lots in this commercial subdivision could be similar to what developed at Rehberg Lane & Grand Avenue. He stated the proposed use is not a bar, not a casino, and is oriented towards young families and outdoor activity. He stated the business would not be a late night activity and all service would be closed by 10 pm.

Terra Pierce, owner of the Lion's Den at 1411 Chy Way, testified in opposition. She stated all of Lot 4 is now owned by Patricia Kramer and the PD would only apply to that lot. She stated based on her experience, microbreweries and their tap rooms are in direct competition with bars, restaurants and casinos. She stated her business purchased the lot to south because it was already zoned for her proposed use. She stated they paid a premium price for the lot because of the allowed use. She stated she also could have purchased one of the NC zoned lots and paid much less and tried to do a zone change. She stated the microbrewery does not belong in a NC zone, it was more appropriate to a manufacturing or industrial zone. She stated it was absurd to allow a brewery next to a neighborhood. She urged the Commission to not approve the zone change. She stated the buyers have a chance to buy the corner lot that is already zoned for the proposed uses.

Tiffany Wardell of 13009 Daybreak testified in opposition. She stated she appreciated the applicant's efforts to reach out to the neighborhood and the West End Task Force. She stated the Task Force has not taken a formal position on this application but she stated she talked to many people in the area and all were opposed to the zone change. She stated some people were not sure if making suggestions on changes to the PD document would be interpreted as supporting the zone change. She stated the Task Force was feeling inundated with zoning applications and new developments. She stated she understood the need for new services in the area but was concerned the proposed uses would be out of character with the neighborhood. She stated the area needs more family friendly businesses, not places to drink. She stated she moved west of Shiloh Road to get away from businesses and commercial areas. She stated she likes to drive to get her groceries and any services she needs.

Scott Aspenlieder provided rebuttal testimony. He stated he understood the difficulty of making these types of zoning decisions where new uses are proposed and the edges are filling in between the far flung subdivisions on Billings West End. He stated he has spoken with many West End residents who do want new services and commercial businesses. He stated to not approve the proposed uses and zoning would be a detriment to the city's infrastructure and finances. He stated the only way to ensure the West End is sustainable is to allow new developments.

Tyler Schmechel testified in rebuttal as well. He state he is also a partner in the proposed development and that he is a millennial. He stated is was ridiculous to think microbreweries "steal" business from bars, restaurants and casinos. He stated a successful microbrewery - Draught Works Brewing - in Missoula opened in a vacant area in 2012 and has spurred all kinds of new development since then. He stated most microbreweries are becoming family friendly places for a short relaxation period after work and school and before dinner either at home or at nearby restaurants. He stated Ms. Pierce and the Lion's Den are not victims and he will not be stealing any of their business.

The Zoning Commission is forwarding a recommendation of  denial on a vote of 1 in favor and 4 opposed to a motion to recommend approval.

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