MONDAY, JANUARY 27, 2025  
CHANHASSEN CITY HALL, 7700 MARKET BOULEVARD  

Summary   

5:30 P.M. - WORK SESSION (Fountain Conference Room) 

Councilmember Haley Schubert was not in attendance. 

Civic Campus Playground

Parks & Recreation Director Jerry Ruegemer introduced Bailey Wolf of Flagship Recreation to present an interactive model of the playground and splash fountain amenities that will be included during Phase II of the Civic Campus project. Flagship is a design-build company that is the supplier of playground equipment for the Civic Campus.

Phase 1 of the Chanhassen Civic Campus construction involves building a new City Hall and Senior Center, along with supporting parking, streetscape and plaza improvements, while allowing the current City Hall to remain operational during construction. Phase 2 includes the demolition of the existing City Hall and the creation of a flagship park space for downtown Chanhassen, featuring amenities such as a park pavilion, pickleball courts and a performance stage. The playground and “pour in place” (PIP) surface will be installed in Spring 2026. (Pour in Place is a durable and customizable surfacing material made from rubber and a binding agent, commonly used in playgrounds and recreational areas to provide a safe, shock-absorbent, and low-maintenance surface that meets ADA standards.). 

Wolf provided Council with an in depth look at a proposed color palette for the playground, referred to in her remarks as “Option #3,” since it was during a September 23, 2024 City Council meeting that the council was presented with 5 options. Some of the colors included in Option #3 are acorn, leaf, limon and dune. 

A few councilmembers expressed a preference for a color called “lagoon” and, at the conclusion of the discussion, the council expressed a preference for the following color scheme: lagoon, acorn, leaf and dune colors, with a grey/black (50/50 mix) colored Pour in Place and a maple leaf of a to-be-determined accent color. 

Housing Study

Allison Streich, executive director of the Carver County Community Development Agency (CDA), and Maxfield Research and Consulting’s Joe Hollman presented the findings of the Comprehensive Housing Study they recently completed on behalf of Carver County. The study and analysis provides recommendations on the amount and types of housing that may be developed to meet the needs of current and future households residing in the County. 

Some notable findings from their study: 

• Chanhassen’s population is projected to grow just under 2% per year from 2020 to 2040. 

• The median household income in Chanhassen is $124,829, which is 18% higher than the county average and 39% higher than the metro area average. 

• Unemployment dropped in Chanhassen from 6.1% in 2010 to 2.2% in 2023. 

• 94% of jobs in Chanhassen are filled by workers commuting into the city and 23% of the people commuting into the city are driving 25 miles or more. 

• Chanhassen averages 136 new housing units/year (49% detached single-family, 23% townhomes, 27% multifamily). 

• The average cost to construct a new single family home in Chanhassen is currently $851,033. 

• There will be a demand for 6,829 housing units in Chanhassen from 2023-2040. 

• Chanhassen currently has 0.9 years of platted lots available for construction where typically a 3 year supply is seen as equilibrium.  This is anticipated to drive interest in new development in the community.  

Overall, the analysis suggested that while Chanhassen has a relatively affluent population and high homeownership rates, housing affordability is a concern for both first-time homebuyers and renters, particularly for moderate-income households.   

Hollman told Council said that, throughout Carver County, the primary need is for housing that is targeted towards moderate income households. And, in Chanhassen, Hollman said housing demand will eventually outstrip the available land and therefore recommended finding ways to allow for greater housing density (townhomes, twin homes, etc.). 

Local Affordable Housing Aid 

Community Development Director Eric Maass delivered a presentation on Local Affordable Housing Aid (LAHA), a sales tax in Minnesota that funds affordable housing projects. The Minnesota Legislature passed the LAHA sales tax in 2023. The tax is 0.25% and applies to retail sales in seven counties: Anoka, Carver, Dakota, Hennepin, Ramsey, Scott and Washington. The amount of aid each county receives is based on a formula that considers the percentage of households considered to be cost-burdened (a “cost-burdened household” is one in which the gross rent is 30 percent or more of household income or in which homeownership costs are 30 percent or more of household income).  

For 2024, the City of Chanhassen has been certified to receive $126,855.46 in funding to support affordable housing within the city. Maass provided the city with a few options on how to use the funding. Some of the ideas presented by Maass were: 

• Establish a City of Chanhassen Local Housing Trust Fund (serve as a 3-year backstop) 

• Identify a housing development project with affordability component that could utilize the dollars 

• Explore the ability to use all or a portion of LAHA funds to provide low or no interest loans to qualifying households to offset road project assessments to assist in maintaining Naturally Occurring Affordable Housing (NOAH) housing stock 

In addition to those ideas, both Maass and members of the council suggested partnering with neighboring towns in order to pool funds for Carver County programs designed to support affordable housing projects, with the idea being that greater needs could be addressed and broader impact achieved through cities working together and collaborating regionally. As a result, Streich rejoined the conversation and shared several county programs either currently operating or under consideration that would fit the description required for LAHA funds.  

Many councilmembers agreed that this approach might make the most sense as long as Chanhassen residents would be amongst the beneficiaries and asked Streich and city staff to revisit this conversation during future Council sessions in order to solidify the city’s plan for using the LAHA funds.  

Accessory Dwelling Units

Maass led a discussion on Accessory Dwelling Units (ADUs). Different types of ADUs include: 

• Detached ADU: A separate structure, like a guest house or small cottage, built on the property. 

• Attached ADU: A unit that is connected to the main house but has its own entrance and living facilities. 

• Internal ADU: A converted space within the primary residence, such as a basement or attic. 

ADUs were adopted into ordinance in 1986 and the city has received 10 applications for ADUs since adopting this ordinance, with four applications since 2021. All ADU applications have been approved. Currently, the city's ordinance requires the application and approval of a variance in order to permit a single-family dwelling to be utilized as a two-family dwelling or "ADU". 

The use of a variance process for ADUs does not have a strong legal basis. While the city has not been challenged to date, it makes sense to consider other approaches. Based on the consistent support that the Planning Commission has historically shown applications for ADUs, the city could consider amending its city code to allow for ADUs to be reviewed solely through an administrative approval process. This would save property owners from having to invest the added time and money in making a formal variance application and going before the Planning Commission for review. 

The Planning Commission held a lengthy discussion regarding ADUs at their July 2, 2024 work session and, during that meeting, it was interested in the following policies for regulation of ADUs: 

• Update the city's definition of an ADU 

• Internal to the home and attached ADUs should not require a variance or conditional use permit process but rather be permitted through the building permit process as a home improvement. 

• One ADU should be allowed per property. 

• ADUs over a detached garage should also be allowed and permitted through the building permit process. 

• Rental Policy - ADUs may be rented as either a short - or long term rental but only if the other dwelling unit on the property is owner occupied. 

• Maintain a single utility service and single roadway access. 

• Design standards - ADUs should complement the main principal structure. 

• Lot Cover - total lot cover would continue to be restricted by the base zoning district. 

• Any property zoned for residential use is eligible for a detached or attached ADU. 

• ADUs may not be sold independently from the principal dwelling. 

• Additional parking is not required for an ADU. 

• ADUs shall abide by Minnesota State building code regulations. 

Maass laid out several possible actions that the council could take: 

• No ordinance revisions. Retain the requirement to receive variance approval in order to construct an ADU on a single-family property 

• Amend the City Code to allow for ADUs on a single-family property through an administrative review process 

• Revise from a variance review process to a conditional use permit (CUP) process. A CUP is required to go before the Planning Commission and include a public hearing but is also required to go before the City Council for final action. This would lengthen the amount of time a property owner would spend getting approvals for an ADU. 

• Typically, ADUs are added over attached garages associated with single family homes. 

• There are a number of older properties in Chanhassen where the only garage is detached from the primary structure. If the property continued to have one driveway and no separate utility services, would the planning commission support the city allowing for ADUs over detached garages in situations where the only garage for the property was detached? 

• This would require an ordinance amendment regarding ADUs and an adjustment to the allowable height of accessory structures in the event that the accessory structure serves as the primary garage and contains an ADU. 

• A potential combination of the above options or another consideration that may be provided through conversation by the City Council. 

Councilmembers said that there were a lot of nuances to the topic of ADUs (renting, size and structure, access and warrants, etc.) and agreed that they would like to move forward with Maass’s process of finding the best solution with regards to the variance process for ADUs and said it was important to find out what is the primary pain point(s) in the city’s current process and policies for residents looking to add an Accessory Dwelling Unit and how can the city help to alleviate those frustrations. 

7:00 P.M. CITY COUNCIL MEETING (City Council Chambers) 

Councilmember Schubert was not in attendance. 

The Council unanimously approved all items on the Consent Agenda. They were:  

• Approve City Council Special Meeting Minutes dated December 18, 2024 

• Approve City Council Work Session Minutes dated December 9, 2024 

• Approve City Council Meeting Minutes dated January 13, 2025 

• Approve City Council Work Session Minutes dated January 13, 2025 

• Receive Environmental Commission Minutes dated December 11, 2024 

• Receive Planning Commission Minutes dated January 7, 2025 

• Receive Economic Development Commission Minutes dated October 15, 2024 

• Receive Economic Development Commission Minutes dated November 12, 2024 

• Receive Economic Development Commission Minutes dated December 11, 2024 

• Receive Commission on Aging Minutes dated December 12, 2024 

• Approve Claims Paid dated January 27, 2025 

• 2025 Fleet Purchases 

• Authorize Execution of two Operation and Maintenance Agreements for 7611 Kiowa Ave and 7610 Iroquois Ave as part of the Volunteer Rain Garden Program associated with the Pavement Rehabilitation Project No. 24-01. 

• Resolution 2025-XX  Approve a Contract for new Phone Service 

• Resolution 2025-XX: Accept $969.00 Donation from MadisonAI 

• Resolution 2025-XX: Call Public Improvement Hearing for the 2025 City Pavement Rehabilitation Project No. 25-01 

Feb Fest 

Mayor Elise Ryan began the meeting by encouraging residents to attend the upcoming 32nd annual February Festival, which will be held on Saturday, February 1st from 12-3p.m. on Lake Ann. “We invite area residents, their families and friends to join us for an ice fishing contest, free winter activities and hot concessions,” said Ryan. The FebFest Medallion Hunt kicked off on Monday, January 27th. For more information on February Festival, visit the city's website at chanhassenmn.gov/febfest. February Festival is the first in a year-long series of special events that are sponsored by the City of Chanhassen, local service organizations and the local business community. Mayor Ryan gave a special thanks to the Rotary Club of Chanhassen for their extensive support of February Festival. 

Visitor Presentations

• Several residents from the Pioneer Pass neighborhood spoke about their concerns with a proposed Pioneer Ridge development site that would abut their properties. They asked councilmembers to see and hear the residents' concerns in person and requested follow-up on how the City Council plans to address these issues.  

• One resident addressed the Council with concerns she had about election integrity during the 2024 General Election 

• One resident shared concerns with the Council about, what she said were, negative health side effects of the mosquito control program in Chanhassen, which is managed by the Metropolitan Mosquito Control District, is a state-level program.  

Land Acquisition 

The Council adjourned its meeting and entered into a closed session (permitted by section 13D.03) in order to discuss the acquisition of PID 25.0960440. The property is owned by LEVEL 7 DEVELOPMENT LLC and the intended use is for the construction of the Chanhassen Bluffs Community Center. 

WORK SESSION (Fountain Conference Room)(continued) 

Cannabis 

Following the closed session, the council resumed its work session in the Fountain Room and Maass led a discussion on the city’s plans for an ordinance related to the zoning regulations associated with cannabis business operations. At the December 9, 2024 City Council meeting, the council voted to table the draft ordinance in order to spend more time thinking about a potential buffer for cannabis retail stores (dispensaries) from schools and residential treatment facilities (and potentially add buffering for liquor and tobacco uses as well). Maass told council that, while there was not an immediate need for an ordinance, the city ought to create one by April in order to meet various state timelines.  

There was not agreement amongst councilmembers on how to craft the city’s ordinance regarding cannabis businesses. Some councilmembers want to apply any buffer equally to both cannabis and alcohol/tobacco stores, while others were willing to apply any buffer solely to cannabis stores considering the fact that alcohol and tobacco establishments are longstanding, familiar industries with well-established regulations and oversight at both the local and state levels. Some councilmembers thought that cannabis, on the other hand, represents a new and evolving landscape with many unknowns, including concerns about security at dispensaries and uncertainties regarding state-level oversight. As a result, they felt it prudent to tread more cautiously and implement stricter regulations specific to cannabis businesses. 

At the conclusion of the council’s discussion, they agreed to continue thinking about the issue in order to arrive at a balanced approach that addresses community concerns, ensures public safety, and complies with state requirements, while also fostering a fair regulatory environment for all affected businesses.