Request for initial zoning of i-2, upon annexation

FCEDA RAIL INDUSTRIAL PARK ANNEXATION

REQUEST FOR INITIAL ZONING OF I-2, UPON ANNEXATION

STAFF REPORT #KA-14-2
KALISPELL PLANNING DEPARTMENT

MARCH 24, 2014
A report to the Kalispell City Planning Board and the Kalispell City Council regarding a request to annex into the city limits with an initial zoning designation of I-2 upon annexation. A public hearing has been scheduled before the Kalispell City Planning Board for April 8, 2014 beginning at 7:00 PM, to consider the annexation request and the appropriate zoning for the property to be annexed. The planning board will forward a recommendation to the Kalispell City Council for consideration.
BACKGROUND INFORMATION
The owner, Flathead Economic Development Authority (FCEDA), has petitioned for annexation and an initial zoning designation of I-2, an industrial zone, on a group of six existing tracts of land totaling 40.032 acres in size. The owner is requesting annexation to ensure the property can be developed as a rail industrial park with access to city services.
This report evaluates the annexation request and the appropriate assignment of a city zoning classification in accordance with Section 27.03.010(4) of the Kalispell Zoning Ordinance. This property will be annexed under the provisions of Sections 7-2-4601 through 7-2-4610, M.C.A., Annexation by Petition.

1. 
   Petitioner / Owner: Flathead County Economic Development Authority (FCEDA)
   

314 Main Street

Kalispell, MT 59901

2. 
   Location and Legal Description of Properties: The tracts under consideration are situated on the east side of Whitefish Stage Road and the west side of East Oregon Street, just northeast of the Kalispell City limits on a site formerly owned and operated by Knife River as a gravel pit. The eastern boundary of the property is adjacent to the Burlington Northern Santa Fe (BNSF) railroad right-of-way.
   

The 40.032-acre site can be legally described as Tracts 4, 5BA, 5B, 30ICA, 30IB, and 30S in the north ½ of Section 8, Township 28 North, Range 21 West P.M.M., Flathead County, Montana.

3. 
   Existing Land Use and Zoning: A small portion of the overall site is currently being used for a trucking business, while most of the site is undeveloped, bare land.
   

The current county zoning on the property is I-2 (heavy industrial). The Flathead County Zoning Regulations define it as, “A district to provide for industrial uses to accommodate heavy manufacturing, processing, fabrication, and assembly of parts or materials. It is also intended that the encroachment of non-industrial or unspecified commercial uses within the district be prevented.” Permitted uses in this district include a variety of heavy industrial uses, including a railroad yard. The county’s zoning code conditionally permits additional heavy industrial uses that tend to deal with handling or manufacture of dangerous or toxic materials, or produce excessive noise, such as an airport or motor vehicle race track.

Figure 1: Aerial view of site

4. 
   Proposed Zoning: The City of Kalispell zoning proposed for the site is I-2, a heavy industrial zone. The Kalispell Zoning Regulations state that the I-2 zoning district is “intended to provide areas for heavy industrial uses to accommodate heavy manufacturing, processing, fabrication and assembling of products or materials. It is also intended that the encroachment of non-industrial uses within the district be prevented. This zoning district would typically be restricted to areas designated as industrial on the Kalispell Growth Policy Future Land Use Map.”
   

4. 
   Size: The group of six tracts totals 40.032 acres in size. When the adjacent public rights-of-way of Whitefish Stage Road and East Oregon Street are included, the total area of annexation totals 48.89 acres.
   

4. 
   Adjacent Land Uses and Zoning: The property is bordered by public rights-of-way (road and rail), developed industrial properties, and several residential properties.
   

North: Klingler Lumber post and pole production and Glacier Stone landscape stone supply, Zoned County I-2 (heavy industrial)

East: Whitefish Stage Road and vacant riparian area adjacent to a side channel of the Stillwater River, Zoned County R-1 (suburban residential)

West: A commercial truck repair shop and East Oregon Street and BNSF rights-of-way, Zoned County I-2 (heavy industrial)

South: Four residential properties and Greenwood Village RV Park and Assisted Living Facility, Zoned County R-5 (two-family residential)

4. 
   General Land Use Character: The general land use character of this area can be described as industrial. The active land uses in the area are a trucking company, a landscape stone supply company, a post and pole wood products manufacturing operation, and a commercial truck repair business. There are residential properties adjacent to the site on its southern boundary, but there is a significant topographic difference between the residential properties and the industrial area, with the residential properties sitting 20 to 30 feet above the industrial zone. There is also an RV park located just south of East Oregon Street.
   

4. 
   Utilities and Public Services: City water and sewer mains both terminate at the city boundaries in Whitefish Stage Road and East Oregon Street. Both utilities will need to be extended to the property. If annexed and subsequently developed, the owner or developer would be required to pay the cost for the utility extension. The design and sizing of these utilities will be reviewed and approved by the Kalispell Public Works Department.
   

Sewer: City sewer main if annexed

Water: City Water if annexed

Refuse: Evergreen Disposal

Electricity: Flathead Electric Cooperative

Telephone: CenturyLink

Schools: School District #5, Kalispell

Fire: Evergreen Fire District (currently), Kalispell Fire Department if annexed

Police: Flathead County Sheriff Department (currently), Kalispell Police Department if annexed
I. ANNEXATION EVALUATION
1. Compliance with the growth policy:
The Kalispell Growth Policy, and specifically the “Core Area Plan” discusses the relocation of the railroad tracks from the Core Area. The applicable policies in the “Core Area Plan,” that were adopted by the City Council in December 2012, include:

1. 
   Work with the railroad to develop a seamless program to remove the tracks from the Core Area and provide a new rail terminus at the FCEDA rail-served industrial site. (emphasis added)
   

2. 
   The city should take the lead in coordinating with the current track users and the railroad for relocation of the businesses out of the Core Area for track removal.
   

3. 
   A program should be developed for the relocation of existing rail dependent business out of the Core Area into the FCEDA rail-served industrial site as a preferred location. (emphasis added)
   

The properties under consideration were purchased by FCEDA for the development of the rail-served industrial site. The annexation of the site into the city is a positive fulfillment of the Growth Policy and the supporting “Core Area Plan.”

2. Municipal Services:
Municipal services, such as sewer mains and water mains, are located within the public rights-of-way of Whitefish Stage Road and East Oregon Street, up to the current Kalispell City limits. These utilities will need to be extended to the property at the time it undergoes development as a rail-served industrial park.
The site is currently protected by the Evergreen Fire District and the Flathead County Sheriff’s office. The applicant has submitted a Notice of Withdrawal from Rural Fire District. At the time of annexation, the property will be served by the Kalispell Fire Department. Similarly, the property will be served by the Kalispell Police Department upon annexation.
3. Distance from current city limits:
The site is approximately 500 feet from the city limit along Whitefish Stage Road and approximately 250 feet on East Oregon Street.
4. Cost of services:
Once annexed to the city, full city services will be made available to the property owner. Any necessary infrastructure associated with this development will be required to be constructed in accordance with the City of Kalispell’s Design and Construction standards and any other development policies, regulations or ordinances that may apply. If annexed, the property owner will be extending and connecting to city sewer and water at the time of development.
The attached cost of services analysis prepared for this property is for commercial annexations. The analysis is only an estimate based on a variety of assumptions. The analysis does not take into consideration changes in methods of assessment and estimated costs associated with services. The information can only be used as a general estimate of the anticipated cost of services and revenue.
The cost to serve the land proposed for annexation is shown in the attached cost of service analysis – Initial Annexation. The total cost of services is estimated to be $18,515. Almost all of the cost is related to the acquisition of East Oregon Street and a part of Whitefish Stage Road. A small amount is related to the protection of the property by Kalispell Police and Fire. Based on the city’s taxation and assessment policies, the property will generate approximately $13,323 in total annual revenue to the city ($4,382 in taxes and $8,941 in assessments). Based on this analysis, the annexation will be a net cost to the city of approximately $5,191.
Two additional costs of services analyses were prepared for this annexation that estimate the costs and revenues for the property under two development scenarios. The first is a “50% build out” scenario that assumes the property is subdivided into 20 rail-served commercial lots, with only half of the lots acquired and used by rail-dependent commercial ventures. The second scenario is a “100% build out” scenario and assumes that the entire 40-acre site has been subdivided into 20 commercial lots, and all of the lots put into rail-served industrial uses, as the applicant plans.
The “50% build out” scenario shows that the estimated cost of services for the property would be $41,885, while the total revenue from taxes and assessments is estimated at $121,600. Under this scenario, the net revenue to the city would be $79,715. This scenario estimates a total of $313,650 in one-time impact fee payments to the city.
The “100% build out” scenario shows that the estimated cost of services for the property would be $66,250, while the total revenue from taxes and assessments is estimated at $165,161. Under this scenario, the net revenue to the city would be $98,911. This scenario estimates a total of $618,976 in one-time impact fee payments to the city.
II. INITIAL ZONING EVALUATION BASED ON STATUTORY CRITERIA
The statutory basis for reviewing a change in zoning is set forth by 76-2-303, M.C.A. Findings of fact for the zone change request are discussed relative to the itemized criteria described by 76-2-304, M.C.A. and Section 27.29.020, Kalispell Zoning Ordinance.
1. Does the requested zone comply with the growth policy?
The property is designated by the Kalispell Growth Policy future land use map as “Industrial” which anticipates either an I-1 or I-2 land use zoning district. The requested initial zoning of I-2 (heavy industrial) is consistent with the industrial designation in the growth policy.

Figure 2: Kalispell Growth Policy Designations

2. Will the requested zone have an effect on motorized and nonmotorized transportation systems?
The site has three public right-of-way access points at this time. The western access is onto Whitefish Stage Road, just south of the bridge crossing the Stillwater River. The southern access is onto East Oregon Street, across from the Greenwood Village RV park. The third is at the northeastern corner of the property, at the intersection of East Oregon Street and Flathead Drive, just west of the Burlington Northern Santa Fe (BNSF) railroad right-of-way. There are no non-motorized facilities on any of these roadways.
Currently, the property is only partially developed and is being used for a trucking company’s base of operations. This use has relatively little impact on the transportation system, because vehicle trips are low in number. The requested zoning will not have an effect on the transportation system, because the current county I-2 zoning includes many of the same uses as the requested city I-2 zoning designation.
Development and use of the property for heavy industrial uses could impact the transportation system due to increased traffic from heavy trucks. Current plans call for routing of industrial traffic to the east onto Flathead Drive and Montclair Drive, out to U.S. Highway 2 West. Discussions have been initiated with the Montana Department of Transportation regarding upgrades to the Montclair Drive-U.S. Highway 2 West intersection to make it suitable for such traffic.

3. Will the requested zone secure safety from fire, panic, and other dangers?

Adequate access and public facilities are available to the site in the case of an emergency. There are no features related to the property which would compromise the safety of the public. All municipal services including police and fire protection, water, and sewer service will be made available to the area.
4. Will the requested zone promote the public health, safety and general welfare?
The requested zoning classification will promote the health and general welfare by restricting land uses to those that would be compatible with the adjoining properties.
5. Will the requested zone provide for adequate light and air?
Setback, height, and lot coverage standards for development occurring on this site are established in the Kalispell Zoning Ordinance to insure adequate light and air is provided.
6. Will the requested zone promote compatible urban growth?
The requested I-2 zoning district allows the property to be developed as an industrial rail park, which is consistent with its past and current use as a gravel pit. The I-2 zoning district maintains and is compatible with the established land use pattern in this area which is a mixture of industrial uses and some limited rail access.
7. Will the requested zone facilitate the adequate provision of transportation, water, sewerage, schools, parks, and other public requirements?
Public services and facilities are available or will need to be extended to the property when it is developed for its intended use as a rail-served industrial park. The property is currently being used as a base of operations for a trucking company. The requested use will create no impact on park or school facilities.
8. Does the requested zone give consideration to the particular suitability of the property for particular uses?
The proposed I-2 zoning district is consistent with the surrounding industrial character of the area and its location adjacent to the BNSF right-of-way. The requested I-2 zoning district gives due consideration of the suitability of this property for the permitted uses in the zoning district.
9. Does the requested zone give reasonable consideration to the character of the district?
The general character of the area is industrial, with a small number of residential properties to the immediate south of the area to be annexed. By assigning the property with the I-2 zoning district the development of this property will be consistent with the industrial character of the area. The proposed zoning is also consistent with County I-2 zoning designation of the properties to the north and east.
10. Will the requested zone avoid undue concentration of people?
Upon development there will be a minor increase in the number and concentration of people in the area. The owner intends to develop a rail-served industrial park with approximately twenty 1.25-acre, rail-dependent commercial lots. The number of individuals that would be employed at these individual lots would be relatively minimal and would be generally spread across the site.
11. Will the proposed zone conserve the value of buildings?
The buildings that are currently located on the property will likely be removed or relocated in order to develop the rail-served industrial park. The value of the industrial area will increase with the establishment of new railroad lines into the park and connections to the existing BNSF right-of-way to the east.
12. Will the requested zone encourage the most appropriate use of the land throughout the municipality?
Industrial development should be encouraged in areas where services and facilities are reasonably available. In this case water and sewer lines are located within a short distance of the property. The proposed zoning is consistent with the city growth policy future land use designation and is compatible with current county zones and uses.
RECOMMENDATION
It is recommended that the Kalispell City Planning Board and Zoning Commission adopt Staff Report #KA-14-2 as findings of fact and recommend to the Kalispell City Council that the property be annexed and the initial zoning for this property upon annexation be I-2, Heavy Industrial.