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2016-10-03 CC Agenda Packetlbertvy � I \ Mayor and Council Request for Action September 29, 2016 SUBJECT: PLANNING - KARSTON COVE 4TI3 ADDITION PRELIMINARY PLAT AND FINAL PLAT RECOMMENDATION: It is respectfully requested that the Mayor and Council consider the following: MOTION TO: Approve Resolution No. 2016-027 Approving an amendment to the Karston Cove Conditional Use Permit/Planned Unit Development and the Preliminary and Final Plat of the Karston Cove 4th Addition and to vacate select easements within Karston Cove 4th Addition. BACKGROUND: In 2004, the City of Albertville approved Karston Cove CUP/PUD and pat that included 14 townhome lots north of 64th Street and 29 lots south of 64th Street. This development was covered within the Karston Cove final plat and a planned unit development agreement that outlined development requirements for this townhome subdivision. The 14 townhomes north of 64th Street have been developed and sold to individual homeowners. The 29 lots south of 64th Street, while final platted, remain undeveloped. In 2009, the City and developer amended the development agreement giving the developer until October 31, 2010 to complete all public improvements and all private on -site improvements to develop the property. The developer went bankrupt in 2010 and never installed the required improvements. The City drew on the developer's letter of credit and is holding the money for the improvements. In 2011 Centra Homes purchased the 29 undeveloped lots and the rights to the letter of credit money from the bankrupt developer. According to the City Attorney, the City has six years from the October 31, 2016 date to bring suit against the developer's successor (Centra Homes) to have the improvements for the final plat installed (see Exhibit B). The current deadline is October 31, 2016. The developer is not interested in building attached townhomes on the site. They have stated that this housing type has become less popular within the current housing market. They also cite that the 2003 models that were approved would not sell favorably in today's market. As a means of addressing the issue of the expiring development agreement and the development objectives of Centra Homes, they have filed application with the City to amend the Karston Cove PUD agreement and they request approval of the Karston Cove 4th Addition. The 4th Addition plat would vacate all the townhome lots in Block 2 of Karston Cove 3rd Addition and repat this into an outot. By City ordinance, no building permit shall be issued for an outot. Any future development will require this outot to be subdivided into lots and blocks before building permits could be issued. Any future subdivision will require City Planning Commission review and Council approval. The application was taken to the Planning Commission on September 13, 2016 for public hearing. At this meeting, the project was presented and the Planning Commission took M:1Public Data\City Council\Council Packet Infonnationl201611003161Karston Cove Pre and Final Plat RCA - MC & AN REVISED.docx Meeting Date: October 3, 2016 ends Page 17 Mayor and Council Request for Action — October 3, 2016 Karston Cove Preliminary Plat and Final Plat Page 2 of 4 testimony from the current president of the existing Karston Cove HOA. He expressed concern over the viability of their HOA without the 29 townhomes that were to be developed south of 641h Street. After review of the staff report and public testimony, the Planning Commission continued the public hearing to October, requesting the applicant provide a concept plan for how this property may be developed in the future. City staff indicated that continuing the public hearing may be acceptable provided the contract deadline allows the City adequate time to act. If not, we would continue the public hearing at the October 3, 2016 City Council meeting and request Council action without a Planning Commission recommendation on this application. The City Attorney, upon review of the contract deadline, has requested that the Council act on this item on October 3, 2016 to be sure that subsequent action will be finalized by October 31, 2016. KEY ISSUES: • Per the City Attorney's comments, the City of Albertville has until October 31, 2016 to take action on the expiring development agreement. • The current Karston Cove HOA consists of just the 14 townhome lots north of 64th Street. At this small size, they are concerned over the financial viability of their HOA in the future. They are depending on future development of the property south of 64th Street to add to their membership and to contribute to their HOA financially. • While the City can require installation of the infrastructure (sewer, water and private drives) to support the 29 townhome lots, the City does not have the ability to force the developer to build the 29 townhomes. • If the development agreement extends beyond the statute of limitations (October 31, 2016), the City will have 29 platted lots without a development contract and required infrastructure improvements. The 4th Addition plat will vacate the townhome lots and will c re ate an out of that may be rep atte d in the future. • The applicant has no immediate plans for developing the site. Keeping the recorded Karston Cove 3rd plat will not ensure that the site will be developed consistent with past approvals and will not expedite the timing of the site's development. • The Karston Cove 3rd Addition townhome plat is dependent on a private street serving the individual townhome lots. The current security is to insure the installation of the public and private improvements. City staff does not recommend having the City install private utility and streets as the market may dictate that this property develop in a different manner, in which case most of the infrastructure that would be installed for the 29 units would be wasted and would likely have to be reinstalled to support a different of configuration in the future. • The subject site remains zoned R-5, Medium Density Residential. Future development of the site must be consistent with this zoning or the developer will need to pursue a zoning change through the City. • The applicant is requesting a vacation of easements on Karston Cove 3rd Addition. If this new plat is approved, City staff is supportive of a partial easement vacation, retaining easements originally established in Karston Cove 1st Addition over wetlands, ponds, and drainageways. M:1Public Data\City Council\Council Packet Infonnationl201611003161Karston Cove Pre and Final Plat RCA - MC & AN REVISED.docx Meeting Date: October 3, 2016 ends Page 18 Mayor and Council Request for Action — October 3, 2016 Karston Cove Preliminary Plat and Final Plat Page 3 of 4 • If Karston Cove 4th Addition is approved, an out of will replace all the townhome lots and the common lot. As an outot, no building permits will be issued for this lot until it is resubdivided into a lot and block description. All future development will be subject to public hearing and full review by the Planning Commission and City Council. • With the approval of the 4th Addition, the developer and City will be required to amend the Karston Cove CUP/PUD with a new development contract to be recorded against the property with the final plat. Staff is recommending that if the plat is approved, it is with the condition that the City retains the option to require future development of the out of south of 64th Street to join the Karston Cove HOA north of the site. This agreement restriction will be recorded with the property and run with the land. • As presented by the Karston Cove HOA president, there have been past concerns with the maintenance and condition of the site. An October 11, 2011 Bolton and Menk letter suggested "minimally a berm should be created, sidewalk, and a rove of trees should be planted to hide the field." • If the Council requires some of the improvements to be installed (e.g. sidewalk), then the City will return all of the letter of credit money the City is holding except an amount sufficient to ensure the construction of such improvements. The new developer's agreement will reflect the new amount of money being held by the City. In staff review today, we are not recommending adding fill to the site or site grading to create a berm. This may change the site drainage patterns. Installation of the sidewalk is a Council decision. City Staff is recommending installation of the sidewalk by June 3, 2017. The developer is proposing to leave the sidewalk unfinished until future development. The sidewalk will impact site access and will likely be damaged by construction traffic when the property is finally developed. Staff is recommending, as part of the PUD agreement, terms of site maintenance and penalties that will be assessed to the property if the City needs to mow or clean up the property. POLICYIPRACTICES CONSIDERATIONS: This plat was created in 2004 and no development has occurred in Block 2 of Karston Cove 3rd Addition in the last 12 years. The property owner does not believe that the 2004 housing type will work and has no interest in developing attached townhomes. No immediate development plans exist for the site. The City Council has been requested to act on this issue without recommendation by the Planning Commission due to development agreement deadlines at the end of October 2016. FINANCIAL CONSIDERATIONS: • The City will be returning the financial security to Centra Homes except an amount necessary to ensure any improvements that the Council requires be installed as part of the plat approval of Karston Cove 4th Addition. • The elimination of the townhome lots will not relieve the current financial situation of the existing Karston Cove HOA, but will essentially retain the status quo indefinitely. • The 4th Addition plat and PUD amendment attempts to provide protections for these financial considerations. M:1Public Data\City Council\Council Packet Infonnationl201611003161Karston Cove Pre and Final Plat RCA - MC & AN REVISED.docx Meeting Date: October 3, 2016 ends Page 19 Mayor and Council Request for Action — October 3, 2016 Karston Cove Preliminary Plat and Final Plat Page 4 of 4 LEGAL CONSIDERATIONS: Please see Exhibit B. Department/Responsible Person: Planning, Alan Brixius Submitted Through: City Administration/PWD, Adam Nafstad Attachments: Exhibit A: Resolution No. 201 6-027 Exhibit B: City Attorney Comments Exhibit C: Karston Cove HOA Comments Exhibit D: NAC Planning Report dated September 8, 2016 Exhibit E: Planning Commission Minutes of September 13, 2016 Exhibit F : HOA Letter to City Council M:1Public Data\City Council\Council Packet Infonnationl201611003161Karston Cove Pre and Final Plat RCA - MC & AN REVISED.docx Meeting Date: October 3, 2016 ends Page 20 CITY OF ALBERTVILLE COUNTY OF WRIGHT STATE OF MINNE SOTA RESOLUTION NO.2016-027 RESOLUTION APPROVING A PRELIMINARY AND FINAL PLAT FOR KARSTON COVE 4TH ADDITION, AMENDMENTS TO THE KARSTON COVE CUPIPUD DEVELOPMENT AGREEMENT, AND THE VACATION OF SELECT EASEMENTS WITHIN KARSTON COVE 4TH ADDITION WITHIN THE CITY OF ALBERTVILLE WHEREAS, Centra North LLC has submitted application for an amended CUPIPUD, a preliminary plat, final plat, and vacation of easements with a subdivision entitled Karston Cove 4th Addition and the proposed plat vacates 29 townhome lots and one common lot in Block 2 Karston Cove 3'd Addition; and WHEREAS, City staff has reviewed the submitted applications and submission documents and has prepared a planning report dated September 8, 201 6; and WHEREAS, the Planning Commission held a public hearing on September 13, 2016 to consider the application, the planning report, and take public testimony; and WHEREAS, upon conducting the public hearing, the Planning Commission requested additional information and continued the public hearing, pending the City Attorney's opinion that the continuance would not be an issue for the development agreement deadline; and WHEREAS, the City Attorney has issued a September 15, 2016 opinion requesting the City Council act on the application on October 3, 2016 to allow time for subsequent legal actions; and WHEREAS, the City Council met on October 3, 2016 to consider the application and held a public hearing to consider the vacation of select easements in conjunction with the Karston Cove 4th Addition; and WHEREAS, upon review of the application information, the request for Council action, the September 8, 2016 planning report, and public testimony, the City Council moves to approve the development application and vacate select easements associated with Karston Cove 4th Addition. NOW, THEREFORE, BE IT RESOLVED that the City Council of Albertville, Minnesota hereby approves the amendment to the CUPIPUD allowing the vacation of 29 townhome lots and one common lot, the Karston Cove 4th Addition preliminary pat, the Karston Cove 4th Addition final plat, and vacation of select easements associated with Karston Cove 4th Addition subject to the following conditions being met: Page 1 EXHIBIT A Agenda Page 21 City of Albertville Resolution No. 2016-027 Meeting of October 3, 2016 Page 2 l . The City retains the option to require the future development on out of A Karston Cove 41h Addition to J oin with the existing Karston Cove HOA on the north side of 641h Street through a revised PUD development agreement to be recorded against the property with the final p at. The obligation of the out of A property to join the existing Karston Cove HOA shall be conditioned on the declarations of the current HOA being amended to allow the out of A property to join the HOA prior to the rep atting of out of A into numbered lots and blocks. 2. The City finds that the drainage and utility easements dedicated on the Karston Cove 3ra Addition plat (but excluding those easements dedicated on the first plat of Karston Cove) are no longer needed for public purposes and that it is in the interest of the public to vacate said drainage and utility easements. 3. The City vacates the drainage and utility easements shown on the Karston Cove 3rd Addition plat, provided the 4th Addition final pat is revised to preserve as drainage and utility easements all drainage and utility easements originally dedicated on the first plat of Karston Cove Said easements shall be subject to the review and approval of the City Engineer prior to recording the final plat. The vacation of said easements shall be effective upon the recording of the Karston Cove 4th Addition plat. 4. The City approves the preliminary and final plat of Karston Cove 4th Addition, subject to the conditions set forth in the City Planner's report dated September 8, 2016, including execution of a development agreement as set forth below. 5. The Developer shall be required to install condition of final plat approval. by June 30, 2017 as a 6. The applicant enters into a development agreement with the City that includes the aforementioned conditions of approval, addresses the issues identified in the RCA for this matter, and meets the approval of the City Attorney. The development agreement shabe recorded against the property with the final plat. 7. Upon execution of the development agreement and recording of the plat, the City shall release the monies it holds in escrow from the proceeds of the letter of credit for Karston Cove 3rd Addition, except for an amount sufficient to cover 125% of the cost of the installation of and the anticipated expenses of the City Attorney, Planner and Engineer related to Karston Cove 3rd Addition and Karston Cove 4th Addition. The City Engineer shall determine the amount of escrow to be held for the installation of and the City Finance Director shall determine the remaining amount of escrow to be held to cover anticipated City expenses. Agenda Page 22 City of Albertville Resolution No. 2016-027 Meeting of October 3, 2016 Page 3 Adopted by the City Council of the City of Albertville this 3rd day of October, 2016. ATTEST: Kimberly A. Olson, City Clerk Jiian Hendrickson, Mayor Agenda Page 23 From: Mike Couri Saito: Pik cOuriru e.cOm] Sent: Thursday, September 15, 2016 9:55 PM To: Alan Brixi us Cc: Adam Nafstad; Kim Olson Sub ect: Karston Cove Fourth Addition Al, As we discussed today, I am requesting that the Karston Cove Fourth Addition plat be brought before the City Council for a vote at its October 3rd meeting due to the time constraints the City is under given the statute of limitations on this issue. The City and the Developer amended the Karston Cove 3rd Addition developer's agreement in 2009, giving the Developer until October 31, 2010 to install the public improvements and the necessary on- and off- site improvements. The Developer went bankrupt in 2010 and never installed the improvements. In the meantime, the City drew on the Developer's letter of credit and is holding the money to use to install the improvements. However, under Minnesota law, we have six years from the date a cause of action (the right to sue someone) arises Linder a contract to bring that suit in court. The City's cause of action against the Developer for its failure to install the improvements by October 31, 2010 arose on October 31, 2010. we have until October 311P 2016 to prepare and serve the Developer with a law suit or we lose the right to force the Developer to install the necessary improvements. If we lose that right, the Third Addition plat will still remain in place but will not have the improvements installed that are necessary to support the plat. I am asking that the City Council vote on the plat approval and amendment to the Developer's Agreement on October 3rd because delaying this to October 17th will likely be too close to October 31st for our office to be assured that we could get the lawsuit filed by October 31st if necessary. My concern is that if the Council were to approve the plat on October 17th, we would still need to get an amendment to the Developer's Agreement fully executed prior to October 31st. If the Developer did not like the terms of approval (assuming the Council approved the plat) and delayed signing the Developer's Agreement amendment for even a little while, we could find ourselves with too little time to draft the complaint and properly serve the Developer. Moving the Council vote on this issue up to October 3rd will give us plenty of time to prepare and serve a lawsuit if the Developer is uncooperative in executing the necessary amendment. I realize that moving this up to October 3rd will preempt the Planning Commission's action on this issue, but given the failed attempt at taking care of this issue with the same Developer in 2011,1 believe action on the October 3rd date is necessary. I have checked the subdivision statue (Minn. Scat. 462.358) and it does not contain a 60-day waiting period after referral to the Planning Commission before the City Council decides whether to approve the plat. That provision only applies to zoning ordinance amendments. Unless there is some provision in the City's subdivision ordinance which requires a Planning Commission recommendation or the passage of a certain amount of time after referral to the Planning Commission before the Council acts on the plat, the Council is free to take this issue up at its October 3rd meeting. I would suggest that we bring this to the City Council for simultaneous preliminary and final plat approval, as well as approval of the Developer's Agreement as we will need approval of all three of these at the October 3rd meeting in order to ensure that the Developer's Agreement can be amended before the October 31 statute of limitations runs. Agenda Page 24 Please feel free to contact me with any questions you may have. Thank you. Michael C. Couri Couri & Ruppe, P.L.L.P. 705 Central Avenue East P.O. Box 369 St. Michael, MN 55376 763-497-1930 Agenda Page 25 From: Jeff Hampton [, irn a i[„f, , i �: i a ire r , i........... .. � f ;.. . Sent: Monday, September 26, 2016 11:16 AM To: Alan Brixi us; 'Randy Christensen'; ....... ,,f„f,;,,f , E; 'Jeff Hampton' Sub ect: FW : Karston Cove Hi All Per our discussions at the Sept. 13th meeting regarding Karston Cove, you had stated we should be at the October 3 meeting. Can you please give me an outline related to Karston Cove at this meeting and what we should bring with us? What they will be discussing on the topic, etc, will they also be voting? Based on discussions that we had at the Sept. 13th meeting, we would like to propose the following at the meeting. Should this be in advance, or at the meeting? Based on our understanding that the City of Albertville would like to amend the current plat to return money held for the original development plan, Karston Cove is requesting the following terms be met to move forward with the vacating the current plat. 1. The City of Albertville provides written documentation signed by Centra Homes that they understand that the City could require any new planned development to be part of our association. This should be filed in the case that Centra Homes sells the property in the future so any new buyer is aware of this requirement. [Vote as discussed in the Planning Commission Meeting dated Sept. 13, we believe it was understood by a majority of the planning commission that our small 14 unit development is underfunded and has higher association fees because of our small size. Any development across the street would possibly end up with the same problem, especially since Centra has already stated that there is simply no longer a demand for that style of townhome and the quantity of homes built will be less than 29, which will also put them in a smaller group with potential issues in the future based on economies of scale. We understand that we will struggle to get by until the new development is included into our association, as we have for the past 10 several years. 2. The City of Albertville includes in their notes when vacating the plat that any future development that is built without inclusion into the current 14 unit association will have to build their own retention/water outlet ponds if not included in the current 14 unit association. 3. RE: Bolton and Menk, Inc. Consulting Engineers and Surveyors recommendation letter to Michael Couri, City Attorney dated October 11, 2011: RE: Point 3. "The unimproved property should not be left as an eyesore to the community. Minimally a berm should be created, sidewalk, and/or a row of trees should be planted to hide the field." This letter was from 2011. Here we are 5 years later, with the same view, even after the recommendation was made to the city. Karston Cove agrees that roads should not be put in. However, along 64th St, we would like the following done prior to returning any monies to Centra Homes: A berm, a sidewalk along the street, some trees, and some street lighting. While it is true that some of this may be torn up in the future when development occurs, it has been stated by Centra Homes that now is not the time. Centra Homes stated that the economy in Albertville simply does not EXHIBIT C Agenda Page 26 warrant any construction at this time, so it could be another 10 years before anything is built. Also per the Sept. 13, 2016 Planning Meeting, Centra Homes has zero plans for this piece of property at this time except to get the plat vacated and their money returned. While my understanding is there are new developments going up in Maple Grove, Rogers, Otsego, St. Michael, and Elk River, per Centra Homes the economy in Albertville cannot support a new development per the current plat at this time. We believe the requests above are reasonable requests by both the City and Karston Cove Townhome association. Also I would like to include a copy of the letter I read at the planning commission. Please let me know your thoughts, and if you could clarify how this meeting on Monday will be organized, it would be appreciated! Thanks in advance! Let me know what I need to provide to you, etc. Best Regards, Jeff Hampton CIT Relay and Switch 14680 James Road Rogers, MN 55374 763-535-2339 Agenda Page 27 flef,15 0 0 f s o in M e irri o ii� i M IHha y , Ste. 320, GoWein V a f f y , M Ni 55422 i p h o ins : 763.957.,!)site:. ins a a ins ins i ins g . , o ir,r,i 4xJifl=tJN4 01 :11 TO: Adam Nafsad FROM: Alan Brixius / Ryan Grittman DATE: September 8, 2016 RE: Albertville - Karston Cove 4th Addition Preliminary Plat, and Final Plat FILE N O : 163.06 — 16.06 BACKGROUND Centra Noah LLC has submitted an application for an amended CUP/ PUD, a preliminary plat, and final plat for property located along the south side of 64th Street NE in the City of Albertville. The proposed plat includes the removal of 29 townhome lots from the Karston Cove 3rd Addition and re -platting the site into one outlot. The site is zoned R-6, Medium Density Multi Family. The site is currently vacant parcels. The site is adjacent to R-6 zoning to the north, east, and west with a park (Winter Park) to the south. The current site is platted as Karston Cove 3rd Addition, under a CUP/PUD approved in 2004. The plat included 14 lots to the north of 64th Street NE, and 29 lots to the south of 64th Street NE. The 14 lots on the north side have housing units on them and have been developed and sold to individual homeowners. The remaining lots on the south side of 64th Street NE were never built on, but have remained as part of the final plat. The original developer let this property go back to the bank when the housing recession hit in Zoos. Centra Noah LLC has since purchased the property. Since the original 3rd Addition plat, townhomes have become less popular compared to other housing options in the current market. This final plat is controlled by a standing development agreement and a security. The applicants' intent is to vacate the current plat, obtain their longstanding security, and eventually developing this area with a product that is more desirable within the residential market. 2 Agenda Page 28 EXHIBIT D Attached for reference: Exhibit A: Site Location Exhibit B : Karson Cove 3rd Addition Plat Exhibit C: Karson Cove 4t" Addition Plat Exhibit D: Karson Cove Easement Vacation ISSUES ANALYSIS Zoning. The subject site is zoned R-6, Medium Density Multi Family. The applicants are proposing to re -plat the unbuilt parcels into one oulo. The applicants are not proposing any changes to the zoning map as part of the current request. Lot Area, Width, and Depth. The subject site is approximately 3.9 acres in area and contains 29 townhome lots. The 4t" Addition will vacate the existing townhomes and create a single 3.9 acre oulo. Under City Code, no building permits may be issued to an oulo. This site will need to be subdivided in the future to allow any future development. Easements and Utility connections. With the original platting of Karson Cove 3rd Addition, drainage and utility easements have been placed over all the land located outside the individual unit lots. Exhibit D illustrates these easements. No sanitary sewer or water has been extended into this parcel. However, there are existing wetlands and drainage areas that were placed into easements with the original Karson Cove 1st Addition plat. These original 1st Addition easements protect wetlands and drainage ways that impact the surrounding neighborhoods and must be retained. In review, staff is willing to vacate the 3d Addition easements over Lot 30, Block 2, but will require the 1 st Addition easements to remain in place. The applicants will need to re -dedicate the original 1st Addition easements on the 4t" Addition final plat. Curb cut Access. The applicants are proposing to leave the existing curb cuts in place. Staff supports the curb cuts remaining in place to assist with maintenance of the wetland areas and mowing of the remaining "dry land" areas. Sidewalk. The original plat included a sidewalk along the south side of 64t" Street NE. The sidewalk is not completed across the subject site. The City Engineer and the developer are proposing to leave the sidewalk unfinished until the area is re -platted for a new development. The City Engineer has noted that completion of the sidewalk would include completion of the curb cut accesses. In the future, a developer may wish to change these curb cut locations as they see fit. Future construction of the site will likely damage any sidewalk constructed at this time. Neighborhood Association. With the elimination of 29 lots, the neighborhood association will be significantly reduced in terms of the number of units. It should be noted that the covenants for the Karston Cove 3rd Addition allow the developer to add additional property to the association with an expiration date of November 2013. After which, the neighborhood L Agenda Page 29 association shall vote on whether or not to allow additional land to be added to the association. Staff recognizes that growing the neighborhood association will make it stronger and more financially stable. This subdivision was approved as a conditional use permit I planned unit development to allow the townhome development. In changing the plat, the City and applicants must amend the approved PU D. As a condition of amending the PU D, staff recommends that the City retain the option to require the developer to have the future development on the south side of 64t" street NE join the existing neighborhood association on the north side, if practical. RECOMMENDATION Based on our review of the plans submitted by Centra Noah LLC dated August 16, 2016, we recommend approval of amending the CUPIPUD, the preliminary plat, and final plat with a revised development agreement with the following conditions: The City retains the option to require the future development on the outlot on the south side of 64t" street NE to join with the existing neighborhood association on the north side through a revised PUD development agreement. 2. The City vacates the easements over Karston Cove 3rd Addition provided the 4t" Addition final plat is revised to dedicate the original 1st Addition easements over the wetlands, ponds, and drainage ways. said easements shall be subject to the review and approval of the City Engineer prior to recording the final plat. 3. The applicants enter into a development contract with the City that includes the aforementioned conditions of approval. cc. 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