ITEM 3.4 PC Minutes 12.17.2018ITEM 3.4
OTSEGO PLANNING COMMISSION MEETING
OTSEGO CITY HALL
DECEMBER 17, 2018
7:00 PM
Call to Order.
Chair Black called the meeting to order at 7:00 PM.
Roll Call: Chair Pam Black; Commissioners: Aaron Stritesky, Jim Kolles, Roger Mord,
Dave Thompson, and Alan Offerman; Absent: Commissioners Steve Schuck and Richard
Nichols; City Council: Council Member Vern Heidner. City Staff: City Planner Daniel
Licht and Administrative Assistant Kelly Thelen.
1. Announcements:
None.
2 Consider the following minutes:
2.1 December 3, 2018 Planning Commission Meeting_
Commissioner Stritesky motioned to approve. Seconded by Commissioner
Offerman. All in favor. Motion carried.
3. Public Hearing Item:
3.1 Amendment Section 11-17-12 Requiring Storm Shelters. (Continued from
December 3, 2018)
City Planner Licht presented the Planning Report.
Applicant, Stephen Bona, Capstone Homes, Inc., 14015 Sunfish Lake Blvd NW, Suite
400, Ramsey, present. Mr. Bona noted support for the City ordinance but wants to give
the buyer the option for the storm shelter and not a requirement.
Mr. Bona disagreed that Capstone's request is based solely on economics. Harvest Run
has single family homes at entrance and villa homes. Mr. Bona has reached out to 11
different communities and did not find another city that requires a storm shelter. A
redesign of the homes to be built in Harvest Run would be necessary for them to
comply with the storm shelter requirement. Capstone Homes, Inc. was not building in
Otsego in 2016 when the ordinance began, but can see the City had good intentions for
public safety.
Mr. Bona said villa homes are a single level living with snow and lawn maintenance that
provide architectural value and are a nice compliment to single family homes. The price
for a new home is $300,000-$400,000. The buyers are empty -nesters and are typically
looking for homes with no stairs. It is a competitive market and buyers can travel from
Minutes of the Otsego Planning Commission
December 17, 2018
Page 2
Otsego to get the slab -on -grade villas without a storm shelter requirement. The cost is
$10,000-$15,000 for the storm shelter. Mr. Bona said the storm shelters offer little or
no perceived value to the buyer and buyers are not asking for storm shelters. Storm
shelters are not being built in the Twin Cities and this ordinance will turn buyers away
from Otsego.
Mr. Bona researched the requirement storm shelters and found one builder, Jeff
Benzinger, that have storm shelters in the Twin Cities. Lennar, DR Horton, and M/I
Homes all modified their house plans in Otsego to include split entries or basements
because of the storm shelter requirement. Lakeville, Minnesota, implemented a storm
shelter ordinance for 18 years, but no one has built homes to require the storm shelter.
Hugo, Minnesota, implemented a requirement for builders to require the storm shelter
be offered as an option to the buyers. Mr. Bona suggested builders should be required
to market the option for a storm shelter so the buyers have the ability to choose. Mr.
Bona mentioned Betenbough Homes in Texas that Capstone Homes, Inc., does
business with; they build 900 slab -on -grade homes a year. Betenbough Homes has
never seen a requirement for storm shelters.
Mr. Bona said the key is allowing the buyers to have the option to have a storm shelter.
The basement finish is an option, but the buyer does not normally have the $30,000-
$40,000 extra to have the basement. The storm shelter is a lower cost than a
basement finish, but is not a perceived value to the buyer. The third option is to require
builders to offer the storm shelter as an option to the buyers, which would remain
consistent with the Comprehensive Plan policies cited by City staff.
Mr. Bona concluded by proposing to modify the Zoning Ordinance to allow buyers the
option of a storm shelter as an investment for them and for builders to market that
option accordingly. Mr. Bona mentioned the letter from the Builders Association
related to the storm shelter requirement. Mr. Bona said that Capstone Homes is not
going down a legal path because the only way to have success is to talk about it with
the Planning Commission.
Chair Black opened the Public Hearing at 7:31 PM.
There were no comments from the public.
Chair Black brought the discussion to the Planning Commission members at 7:32 PM.
Commissioner Thompson asked about the two Harvest Run buyers' reactions to the
addition of the storm shelter. Mr. Bona said the buyers were resistant since they had to
change the layout of the house, but they were okay because there was going to be no
charge to them. Commissioner Thompson was curious if the buyers were pleased to
Minutes of the Otsego Planning Commission
December 17, 2018
Page 3
have the safe room. Mr. Bona repeated that the buyers were resistant since they had
to change the layout of the house, but they were okay with the requirement because
there was no charge to the buyer.
Commissioner Offerman questioned the prices quoted asked about Capstone Homes,
Inc.'s, cost versus Benzinger Homes. Mr. Bona said the estimate was $10,000-
$15,000. The prebuilt unit is $4,000 with added costs bring it in and do extra deep
footings. Commissioner Offerman said he found it hard to believe it is $15,000 for an
interior room the storm shelter is not outside the standard construction. Mr. Bona said
he believes the cost is correct, but the perceived value for the buyer is not there. Mr.
Bona added Capstone Homes, Inc. does not want to stop two big projects. Mr. Bona
repeated that the storm shelter is a big cost and slowing things down and losing time
because of this discussion. Commissioner Offerman said he has mixed feelings about
the storm shelter, but agreed public safety is a concern. Mr. Bona said price is not the
only issue. Commissioner Offerman replied the cost could be small and does not
believe buyers leaving Otsego is a fair concern.
CM Heidner questioned the feasibility of Mr. Bona's proposed amendment for the buyers
to have an option as the City cannot control the price charged by the builders.
Commissioner Offerman asked if the other builders modified their plans because of the
ordinance for market value. City Planner Licht said that Lennar and M/I Homes
changed plans to either split entry or full basements. Commissioner Thompson said the
split entry is shallow. Mr. Bona said Harvest Run is already graded so that makes it
difficult to regrade to half basements. The adjacent property to the east that Capstone
Homes has under contract could be changed to half basements. Commissioner
Stritesky said frost footings and concrete would be the same with added cost for floor
trusses. Commissioner Offerman added it is more money to add thickened slab around
bathroom to be a storm shelter, but you would not notice the change.
Commissioner Mord said that the basis for the storm shelter ordinance being approved
was the safety and welfare of residents during severe storms. Commissioner Mord
added there is enough creativity for developers to meet the requirement and create a
sellable home for the buyers.
Commissioner Stritesky said that cost of $10,000 for a storm shelter is about 2.8% of
house; sales could decrease, but if the requirement was made an option the builder
might not want to market it. Mr. Bona agreed that is 2.5% of new construction, but
look across the Twin Cities and note that no one else but Lakeville, who had 450
permits through November, is requiring a shelter. Mr. Bona said the profit might be
$1,000 for the storm shelter. Mr. Bona said that slab -on -grade homes are being built
everywhere and that even townhomes need basements for the perceived value. Hugo,
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December 17, 2018
Page 4
Minnesota, has required builders offer a storm shelter as an option, which might not be
a fool -proof plan, but they are doing it that way and it works.
Commissioner Offerman asked Mr. Bona what their plans are if the ordinance
amendment is either approved or not approved. Mr. Bona replied they are willing to
break down costs and give City the numbers if required to offer the storm shelter as an
option. Mr. Bona said that if the ordinance amendment is denied, the villa lots will need
to be regraded. The future additions of Harvest Run have not been graded, but will be
graded for single family dwellings. Capstone Homes, Inc. will also remove plans for
villas within the parcel to the east that they have under contract. Mr. Bona said that
Capstone Homes, Inc., will lose when the market hits a dip because there won't be a
variety of houses within the developments, as the more products you have, the longer
you will ride out the market.
Commissioner Offerman said he has mixed feelings between about phase developments
where a storm shelter is not required because they were preliminary platted prior to the
ordinance. Commissioner Offerman asked why aren't the lots that have not touched
and graded being redone to require the ordinance; was it because they got in before
the ordinance changed. Commissioner Thompson asked if the builder is required to put
in the storm shelters. City Planner Licht said building plans were approved when the
preliminary plats was approved prior to adoption of the Ordinance. Commissioner
Offerman continued that the ordinance requiring storm shelters was adopted for the
safety of the community.
Mr. Bona said Capstone Homes, Inc., is willing to work with Planning Commission to
create a plan. Mr. Bona questioned why the City can require the storm shelter versus
why the buyer should be able to decide. Capstone Homes, Inc., can only push the price
up so much, but added they want the buyers to have the option for safety.
Chair Black returned to the public for additional comment at 7:59 PM.
There were no public comments.
Chair Black closed the public hearing at 8:00 PM.
Commissioner Stritesky said that the City's intentions for public safety might not be
most popular, but someone has to be first to require storm shelters. Commissioner
Stritesky added he is not ready if there is a storm that comes through and plans were
not in place to have the storm shelter and there was destruction. Commissioner
Stritesky also noted that Benzinger Homes has followed the ordinance requirement.
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December 17, 2018
Page 5
Commissioner Offerman agreed with Commissioner Stritesky. Commissioner Offerman
also said that there may be a way to transition; maybe require it as option, but an
economical option. Commissioner Offerman also agreed with Commissioner Mord's
comment that the developers are creative at finding solutions.
Commissioner Mord remarked that providing a storm shelter as an option is the same
as repealing the ordinance. Commissioner Mord did not believe there is incentive for
builders to make it cost effective. A lot of thought was made when the ordinance was
adopted for it to be a safety requirement.
Chair Black commented the buyer might be the first of many homeowners that is
making the choice for the storm shelter if it is only an option.
Commissioner Kolles agreed the public safety is the most important factor.
Commissioner Kolles said he could not imagine what he would do if he lived in a slab -
on -grade home. Commissioner Kolles said he does not believe the option to choose
whether or not to have a storm shelter is feasible. Commission Kolles said that if
$350,000 is the cost for a house then the $10,000 cost for the storm shelter is peanuts.
Commissioner Kolles asked the Commissioners to think about putting a price on family
and wondered who would the blame go on if the storm shelter is not there.
Commissioner Thompson commented he has been going to the basement the whole
time he has lived in Minnesota and cannot imagine not having a basement or storm
shelter to go to.
Commissioner Kolles replied he cannot see the complaint about the $10,000 cost for the
storm shelter and added he would not buy a house if there was not a storm shelter or
basement.
Commissioner Stritesky said it is not a commercial issue and to repeal the requirement
for the builders to sell for less is irresponsible to the community.
Mr. Bona asked for an opportunity to respond. Chair Black allowed the opportunity to
comment. Mr. Bona said it is not about cost, but it is about the market. Mr. Bona said
he does not have an answer to the question about safety, but that no one gets blamed
if storm comes and destroy the City. Mr. Bona said this ordinance is a brand new
requirement and questioned where do the regulations stop: Mr. Bona commented on
fires are higher in the City and questioned when the requirement for sprinklers would
be adopted. Mr. Bona wondered when security systems would become a requirement in
the City. Mr. Bona said to repeal the storm shelter requirement would be the best thing
for Benzinger Homes because it is hurting sales. Mr. Bona said they would to bring in
costs and build options for the storm shelter in their development to have a creative
Minutes of the Otsego Planning Commission
December 17, 2018
Page 6
solution. Mr. Bona said that the second buyer of a house has a choice whether or not to
buy a house that has a storm shelter or not. Mr. Bona thanked the Planning
Commission for their time to discuss.
Commissioner Thompson motioned to recommend the application be denied
based on a finding that the request is inconsistent with the policies of the
Comprehensive Plan and intent of the Zoning Ordinance as set forth in the
findings of fact as presented. Seconded by Commissioner Stritesky. All in
favor. Motion carried.
Council Member Heidner encouraged Mr. Bona to work with City staff to consider
options to address their concerns regarding the storm shelter requirement.
4. Update on City Council actions.
Council Member Heidner updated the Planning Commission on recent City Council
actions.
5. Update on future Planning Commission Agenda items.
City Planner Licht updated the commissioners on possible future agenda items. No
January meetings because no applications have been made.
6. Adjourn.
Commissioner Offerman motioned to adjourn. Seconded by Commissioner
Stritesky. All in favor. Motion carried. Adjourned at 8:36 PM.
Pam Black, Chair
ATTEST:
Kelly Thelen, Administrative Assistant