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Changing the rules, mid-game

Published (2/3/2012)
By Nick Busse
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Imagine you’re a business owner, looking to construct a new building on property you’ve owned for many years. You spend several months and tens of thousands of dollars planning it. Finally, you submit your land use application to the city.

Then you find out there’s a problem. Someone on the city council doesn’t like your project. They vote to adopt a one-year moratorium on new land uses, and while it’s in effect, they change the land use regulations so that your building can never be built.

Does this seem fair to you?

Many builders and developers say it’s not, and they’re pushing legislation that would stop local governments from using what they consider underhanded tactics against developers.

Sponsored by Rep. Mike Beard (R-Shakopee), HF389 would severely limit the abilities of cities, counties and townships to adopt what are known as “interim ordinances.” Also known as “land use moratoria,” these ordinances allow local governments to unilaterally stop developments from going forward while they rethink their rules for developers.

For local governments, interim ordinances help ensure that their communities develop according to a plan, but businesses say they’re often applied in ways that are arbitrary and unfair.

The bill had its first hearing Jan. 26 in the House Government Operations and Elections Committee. Peter Coyle, a lobbyist representing the Builders Association of the Twin Cities, said the story described above is 100-percent true. He claims it’s just one of many examples where businesses have been left on the hook for enormous sums of money and squandered time simply because the city has some kind of problem with the project.

In other words, they’re following all the city’s rules, but the city finds a way to change the rules before they can reach the finish line.

“They find out that mid-stream after they’ve spent all their money on the land, the engineering, the architectural work, that somebody in the city or the county or the town doesn’t much like what they’re proposing,” Coyle said. “They’re at the complete mercy of the local government.”

Beard said local governments sometimes impose moratoria as a deliberate way of wearing down a developer or property owner. He thinks local governments should have to allow a complete land use application to go forward. They could still adopt moratoria for future developments, under the provisions, but not for ones that are already in the works.

“All this does is protect people who are playing by the rules that exist at the moment from being blindsided by a moratorium that then wears them down,” Beard said.

Proponents argue that nothing in the bill would prevent local governments from banning projects they think will be harmful for their community. They point out that the legislation includes some exceptions for unique situations, such as when a proposed “auto body shop” turns out to be a strip club in disguise.

“Once they make the rules, we have to follow them — we understand that. But they should also be bound by the rules,” Coyle said.

A fracking problem

As you might have guessed, there’s another side to the story. To illustrate it, here’s another what-if scenario:

Let’s say you serve on a county board in southeast Minnesota. An energy company wants to open up a large swath of land in your county to silica sand mining. You’re confronted by a group of constituents concerned about the impact of the mines on the local drinking water supply, air quality and their property values. They present you with a petition, signed by hundreds, asking for a moratorium to be put in place so these issues can be studied further.

What do you do?

This is the real-life quandary faced by many local elected officials in southeastern Minnesota, where the exploding demand for local minerals has run up against environmental and health concerns. This scenic part of the state happens to be rich in silica sand — a necessary ingredient in hydraulic fracturing, or “fracking,” which is used to extract natural gas and petroleum deposits from underground reservoirs.

The rapid expansion of silica mining poses a unique problem for some local officials. David Williams, an elected township supervisor in Preble Township, says many local governments simply haven’t anticipated these kinds of land uses before, and need time to study their potential impacts.

“The proposed developer is not the only property owner,” Williams said. “Those who are farmers, recreational users, rural residents — they are also property owners who are trying to protect their property value from some unexpected use that might damage their property value.”

Many counties and townships have already enacted moratoria to temporarily halt the mining projects. Williams said he thinks most of them will eventually grant conditional use permits and allow the mining to move forward, but said local officials want to give the issue its due diligence first.

“Most moratoria do not result in a flat-out prohibition of land use,” Williams said. “It just doesn’t happen.”

Bobby King, an organizer for the Land Stewardship Project, said developers aren’t always honest and forthcoming about the potential problems. He said the burden is on the locals to weigh the costs of a proposed project against its benefits. Sometimes, he argues, a moratorium is their only recourse.

“We fundamentally believe that local governments need to be fully empowered to respond to citizens’ concerns when unexpected and potentially harmful developments are proposed in their communities,” King said.

Some see the hand of big environmentalist groups behind these arguments. Beard thinks many of the bill’s opponents are more concerned about what the sand is being used for than about the mining itself.

“If they were selling sand to the glass plant … well, that would be one thing. But as soon as they hear that a big, evil oil company is buying it, well then they’re all torqued-off and they’ll do anything they can to sort of gum up the works,” he said.

There’s another, more fundamental argument against the bill: some say it gives away too much local control.

Rep. Bev Scalze (DFL-Little Canada), a former city councilwoman, said local governments are at a disadvantage against developers who generally have much more information about a project than they do. If Beard’s bill were to become law, she said some local officials might be less inclined to let developers move forward with permit applications for fear of being blindsided by some kind of new use that isn’t anticipated in their ordinances.

“It may actually impede development, unintended, because I think local governments might be a little more gun shy about accepting applications without a study or some research,” she said.

The bill’s supporters have an answer to that criticism too. John Kysylyczyn, a former mayor of Roseville, said the real problem is that cities, counties and townships don’t work hard enough to try to anticipate potential issues and new uses ahead of time.

“There’s no excuse for cities, counties or townships that are not proactive on issues,” Kysylyczyn said.

In spite of all their differences, Beard said the supporters and the opponents of the bill are trying to work out a compromise.

At the Jan. 26 hearing, Beard requested that the bill be laid over so that the interested parties can hash out some kind of agreement. He doesn’t think the eventual compromise will please everyone, but he hopes to alleviate at least some of the concerns. He said the bill will probably come up for a vote in committee sometime after the Legislature’s February break.

Sen. Warren Limmer (R-Maple Grove) sponsors the companion, SF270, which awaits action by the Senate Local Government and Elections Committee.

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