Update on Zoning Verification for Baker White at 6111 Highway 10 NW

In January of this year, a Building Permit Application for an interior remodel was received for the building located at 6111 Highway 10 NW (the "Subject Property").  As the permit was reviewed, questions were raised regarding whether the intended use was permitted within the H-1 Highway 10 Business District.  After multiple consultations with the City Attorney's office, it was determined that the use was neither a permitted, conditional, or accessory use in this zoning district and therefore, Planning Division Staff did not approve the Building Permit.  Since that time, Staff has continued to explore potential remedies and has also met with both the Business Owner and the Property Owner to discuss this matter and gather additional information.

Notification is not required as this is only intended as an update for City Council.

Baker White (the "Business") currently utilizes four (4) of the existing six (6) suites within the multi-tenant building on the Subject Property.  The suites occupied by the Business include an E-Cig retail operation (permitted use), Baker White offices (permitted use), a warehousing space (accessory use), and a clean room/mixing lab (warehouse), which would be classified as light manufacturing (not permitted in this zoning district). It was the City's understanding that this existing warehouse space was directly related to the adjacent eCig retail suite, and not a separate light manufacturing and distribution use.

The Building Permit Application was to create new space where 'sample sticks' (www.samplesticks.com) could be made for vape customers to taste test various flavors prior to purchase.  The production of the 'sample sticks' essentially includes melting a hard gel in a microwave, dipping small sticks in the liquid, and letting the liquid cool till it is hard again. This too would be classified as light manufacturing, after consultation with the City Attorney.

Records indicate that this Business has been operating on the Subject Property since 2013 (that was the first record of a Business Registration Certificate) with no apparent issues.  However, as a result of a Fire Safety Inspection in 2017, the Business was informed that fire suppression was required for the clean room/mixing lab suite.  It appears that those improvements have been made (permits were issued retroactively for the work in 2017).  It also appears that other interior improvements were occurring at that time without the necessary permits (removing and/or moving a mezzanine as well as modifying the fire suppression system).  In order to correct an immediate public safety concern, the fire suppression system was updated.  This process did not include a request for Zoning Verification. Sidebar: as a result of this scenario, which does occur from time to time, Staff is in the process of including a Zoning Verification and Building Code Verification with each permit and license that is issued by the City.

Options
At this time, there are several potential options to consider to address the apparent zoning code violation(s) that exist on the Subject Property.  Staff is seeking some direction from the City Council on what the preferably option(s) is.

1. The Business Owner/Property Owner could apply for a Zoning Amendment to identify light manufacturing as a permitted use in the H-1 Highway 10 Business District.  What is being proposed and what is already occurring on site seems to be compatible with other permitted uses in this district (been in operation for 4-5 years with no complaints).  However, Staff would have to examine what, if any, impact this could have on the rest of the zoning district.  A good example of a blended retail/industrial type of district can be viewed on the Highway 169 corridor in Champlin.  Considering the traffic concerns of Highway 10 and some of the safety concerns with accessing the Subject Property, less retail based uses may even be desirable.  But, the Business Owner has indicated that any further delay (potentially about a 60-day process) will have serious impacts on his potential contracts for production and distribution of the 'sample sticks'. 
2. Staff could assist the Business Owner in finding an appropriately zoned property for this type of use.  This offer has already been extended to the Business Owner.  Staff has offered this solution.
3. An evaluation of both permitted and conditional uses is needed within the H-1 Highway 10 Business District.  This district was established with limited permitted/conditional uses, as it was intended to preserve what was identified as being needed for future highway right-of-way and therefore lessen the future cost of acquisition.  The vision for the Highway 10 corridor has changed with the current Highway 10 Access Planning Study and not as many properties are needed for right-of-way (including the Subject Property). This is a much longer process.
4. Establish a timeframe in which the light manufacturing use occurring on the Subject Property be terminated.  This is the least desirable option available in Staff's opinion.  The Subject Property is well maintained and there have not been any serious blight or zoning code violations.

Staff has been in communication with the City Attorney's office multiple times for legal interpretations on various elements of this review.  Ultimately, it is the City Attorney's opinion that a Zoning Amendment would need to be processed before permitting the tenant improvements proposed with the Building Permit Application.  Furthermore, a Zoning Amendment could also assist with addressing the clean room/mixing lab that already exists on the Subject Property.

This case is being handled as part of Staff's normal duties.

Staff does not have a specific recommendation at this time.  The purpose of the case was to provide an update to City Council and get feedback and direction on how the Council would like to proceed.

Provide direction to Staff on how best to proceed with addressing this matter.