Shakopee wants to revoke prior approval for affordable apartment project

Shakopee wants to revoke a zoning decision officials made years ago for an affordable apartment project, contending the group proposing the building didn't hold the required neighborhood meeting and the project is taking too long.

Beacon Interfaith Housing Collaborative, a nonprofit network of congregations that works to provide affordable housing in the metro, received several approvals to build a "deeply" affordable, 46-unit apartment building three years ago.

The project, called Prairie Pointe, is targeted to people coming out of homelessness, single-parent families and others making 30% or less of the area's median income.

The City Council approved a special zoning designation for the project in June 2020 that allowed reduced setbacks and fewer parking spots, despite some opposition from residents concerned about density and property values.

Kevin Walker, Beacon's vice president of housing, said the project is desperately needed in the south metro suburb.

"To us, it's perplexing and flummoxing when there's a clandestine effort to rezone an entitled site that we put fantastic time and effort into," Walker said.

City staff members now say that decision was made "in error" and want to return the site to its previous zoning category, called B-1. They cited Beacon's failure to hold a community meeting as a major reason.

The city's Planning Commission met two weeks ago and tabled the project.

"We're just putting it back to its original zoning," said Michael Kerski, Shakopee's planning director. "A PUD [planned unit development] is a special privilege … and I think [the council's] attitude is, it's been three years, you haven't done anything, we're going to go to B-1."

Kerski said the same building can still be built in the previous zoning category by shifting it northwest, but it would need 75-foot setbacks in the side yard instead of 20 feet. Parking spots could go in the setback area.

Kerski said parking requirements for apartments have since eased and multifamily design standards have changed since 2020, so many of the benefits of a PUD aren't needed anymore to make the project happen, he said.

But Walker said that the city's action will require "starting over" with new plans and a "dramatic" variance to meet parking rules. Beacon has already invested almost $1 million in Prairie Pointe through engineering, architecture and legal costs.

Affordable housing projects often take a long time, in part because of the complexity of financing, Walker said. Beacon has secured $16 million — including $11.7 million from Minnesota Housing — but still needs about $1 million after this month. Construction is planned for spring 2024.

Neighborhood concerns

At a Planning Commission meeting in early June, dozens of visitors packed the room, some wearing red "Pointe the Way Home" stickers. About 15 people spoke, some supporting the project as-is and others favoring the zoning revocation.

Melanie Gezel-Rangel, who lives by the proposed apartments, said two neighbors sold their homes because of this project. She said she tried to meet with Beacon but they never contacted her.

David Mack said residents of his senior-living community, many who opposed the project, couldn't comment in 2020 because the process was online.

"It's all seniors there — none of them are computer literate," he said.

Resident Nathan Jahr suggested showing a Fox 9 video clip from April 2023 related to a Minneapolis apartment building that Beacon partly owns. The building had been essentially taken over by nonresidents who left behind needles, old food and human waste. There were also fire and building code violations.

"That doesn't seem like a very responsible company that belongs in our neighborhood," he said.

Walker called that an "unprecedented" situation with "armed individuals" and said Beacon resolved the problem quickly, as shown in a follow-up story.

Resident Kieran Hughes said he encountered many well-run, affordable apartment buildings on his routes as a mail carrier. They allowed tenants to live "their best life," he said.

The city planner is creating barriers for Prairie Pointe because it is affordable housing, Jaylani Hussein, executive director of the Minnesota chapter of the Council on American-Islamic Relations, told the commission. Many workers at Amazon in Shakopee can't afford to live nearby because they can't find affordable homes, he said.

"This is an effort to undermine and derail a project that is already fragile," Hussein said.

Defining 'neighborhood meeting'

Kerski, the planning director, said other developers held community meetings during COVID-19, some via Zoom or outdoors.

City code requires such meetings for planned unit developments, he said, and the requirement wasn't waived.

"It's been three years and they've never met with anyone from the neighborhood," Kerski said.

Walker, the Beacon official, said the nonprofit initially had an in-person meeting planned for the Knights of Columbus building — located on the northern half of the Prairie Pointe site, now owned by Resonate Church — but were told by the Knights that they couldn't hold it because of COVID-19.

Walker provided emails from Shakopee senior planner Kyle Sobota from April 2020 stating the city's notification letters to residents combined with an online staff presentation and a place to submit electronic comments was sufficient community outreach.

"This replaces the neighborhood meeting requirement," Sobota's email said.

Jacob Steen, Beacon's attorney, wrote a letter summarizing several reasons that city officials' plans are unlawful and said the rezoning is inconsistent with both city code and Shakopee's 2040 Comprehensive Plan.

When asked if the city could legally revoke a project's zoning, Kerski said it was "a council decision."

But Walker said — and Kerski agreed — the city's approvals had no expiration date. And having a neighborhood meeting wasn't a condition of approval, Walker said.

"We simply want to build what the city said once already is what we should build," Walker said.

The Planning Commission is scheduled to discuss the project again on Aug. 3.