City avoids appeal of Sugarloaf project

When people disagree with decisions made by the Duluth Planning Commission, the appeals process allows for their concerns to be heard by the City Council. The councilors consider appeals during special committee meetings, typically scheduled just prior to their regular Monday meetings. At the regular meeting, they vote to affirm or deny the Planning Commission’s action.

However, as the laws are currently written, another avenue also exists within the appeals process. In the right circumstances, the city can simply dismiss appeals unheard. The following account describes how one Duluth citizen was legally and administratively thwarted from appealing an action of the Planning Commission.

Skyline View Estates is a development being planned on 70 acres of land near Proctor. The property, which is owned by Sugarloaf Enterprises, LLC (a Grand Marais-based company) and managed by principals Rick and Cindy Crawford, is completely undeveloped at present. Kingsbury Creek flows along the western edge of the wooded, fairly steep property. The Crawfords plan to construct 13 home building sites on the property, each on approximately five acres of land. The development will be accessed by a new road, which the developers plan to build up from Skyline Parkway.

Sugarloaf Enterprises is also represented by Gunnar Johnson, presently employed by the Overom law firm. Johnson is the former city attorney of Duluth, having served in that role from 2008 to 2020. Duluth-based Northland Consulting is the engineering firm on the project, assisted by Alta Land Survey Company. SAS Landscape Architects, a company owned by former Planning Commissioner Luke Sydow, has also been involved with the new development.

On Aug. 19, 2021, the Crawfords submitted an application for a variance to the Planning Commission. Developers seek variances when zoning rules create “exceptional practical difficulties or undue hardship” in completing a project. In this case, the Crawfords requested a variance to exempt their project from the “clustering requirements” mandated by the city’s development code.

Planners generally prefer clustering, because it allows housing projects to “retain the open character of the land and reduce the amount of the tract occupied by building sites.” The Crawfords contended that the clustering requirements, if applied to this particular piece of property, would actually have a greater adverse impact, because more roads would need to be built and more trees cleared to service the clustered homes.

Timeline of events

Aug. 19, 2021. The application for the variance was submitted.

Sept. 28, 2021. The Planning Commission approved the variance.

Oct. 8, 2021. Duluth resident Mark Baker filed an appeal to the variance, on behalf of the nonprofit group We Walk in Duluth. Baker argued that there was nothing unusual about the property which would prevent the Crawfords from following the zoning code as written, and that the variance had been granted largely to help the developer economically. Under the law, economic reasons alone do not constitute a practical difficulty.

Nov. 9, 2021. The city did not consider Baker’s appeal complete until he paid the required $400 appeal fee, which he did on Nov. 9. At this time, an appeal hearing appeared on the City Council’s agenda, scheduled for Dec. 20, 2021. The city clerk’s office notified the Planning Department of the appeal. City planners were legally obligated to suspend work on the project until the appeal was resolved.

A few days thereafter, however, the Dec. 20 hearing date disappeared from the calendar.

Dec. 7, 2021. The city clerk’s office notified Mark Baker, via dated letter, that his appeal would be heard by the Council on Jan. 10, 2022. Copies of the letter were also supplied to Deputy Planning Director Adam Fulton and Planning Manager Ben Van Tassel.

Unfortunately, under Minnesota Statute 15.99, when an application for a variance (or any other type of planning decision) is filed, the governing body must make a decision on the application within 60 days. Developers can request an extension for an additional 60 days. The Crawfords had requested an extension, which meant that all matters relating to their variance application needed to be completed within 120 days—by Dec. 17, 2021.

The letter issued to Mr. Baker said nothing about the Dec. 17 deadline.

Jan. 5, 2022. Assistant City Attorney Bob Asleson sent Mark Baker another letter, notifying him that his appeal was “moot” and would not be heard, because the deadline had passed. The appeal hearing had been scheduled out of existence.

The Moreno case

As ludicrous as it seems, this decision is backed up by the law—specifically, Minnesota Statute 15.99 and the case of Moreno v. City of Minneapolis.

Prior to 1995, city planners had been able to veto projects they didn’t like simply by never taking action on them, and leaving them in limbo forever. In 1995, the Minnesota state legislature enacted Statute 15.99 to eliminate this practice. Statute 15.99, known as the “60-day rule,” compels planners to approve or deny applications within 60 days (or 120 days, when an extension is granted).

This statute was tested in 2004, with the Moreno case. The verdict of Moreno essentially held that everything related to a planning decision must be resolved by the deadline. Anything that is not resolved by the deadline, including appeals, is dropped from consideration.

Nothing compels city clerks to schedule appeal hearings by the deadline; indeed, they may not even be aware that a deadline exists. In the case of the Sugarloaf variance, the deadline was Dec. 17. The clerk scheduled Mark Baker’s appeal on Dec. 7. Between Dec. 7 and Dec. 17, nobody alerted the city clerk’s office that there was a deadline, or that a Jan. 20 hearing would be invalid. Nobody said a word while the clock ticked down. Baker’s appeal was doomed the instant it was set.

What the city says

The city was extremely resistant to talk to me about this. Under Mayor Emily Larson and Chief Administrative Officer Noah Schuchman, the city has been limiting reporters’ access for years, but this level of resistance surpassed anything I had seen before. My requests for interviews with city planners were repeatedly denied. The city attorney’s office repeatedly refused to speak with me. In response to my inquiries, City Attorney Rebecca St. George stated (via email): “My office does not give legal opinions/advice to private parties.”

It was only after I asked Public Information Officer Kate Van Daele to confirm for me, in writing, that they were denying a reporter access to city staff, that I was finally granted an interview with Deputy City Planner Adam Fulton. I spoke with him on Jan. 21.

To his credit, Mr. Fulton acknowledged that he understood problems existed with Statute 15.99. “I can’t tell you how frustrating I find that Moreno decision,” he told me. “The intent [is] for a city to be able to act within the 120 days, [but] what if the Planning Commission meeting happens on the 119th day? And then, like, how does someone appeal?”

City code gives people ten days to appeal, but ten days after Day 119 would put people past the deadline, meaning the appeal would automatically be moot. “That doesn’t work,” said Fulton.

“Appeals [are] really important, and they’re a critical part of the public process,” he went on. “We take appeals seriously. We want them to be considered. And one of the things that I think will come out of this is that we need to make some refinements to our timelines within … our application process to make sure that we provide that timing for appeals … This is an issue that we are going to try to address in city code, and I think we need to talk to others around the state to figure out what the right decision is for us on a statewide basis. Because this is an error.”

When I asked about the Sugarloaf variance, Fulton repeatedly returned to the fact that Mark Baker hadn’t paid his appeal fee until Nov. 9. “You know, if, on Oct. 8th, that [appeal] had actually been filed in a complete way, we would have been able to get that on the December meeting, but we were not capable of doing that, based on the timing of the appeal payment … When someone submits an appeal, they should submit it as soon as they can, and in a complete fashion … I have so many people who are so busy on so many things, it’s, like, I can’t redirect someone, if we have an incomplete appeal, like, ‘Well, we might get a complete appeal someday, so stop working on the Essentia project,’ or whatever, you know?”

Fulton said that it took the planning office “three to four weeks” to prepare for an appeal—“from staff drafting [of resolutions] to the different departments reviewing, and so we did not have the feasibility of bringing that to Council as quickly as we would have liked.”

Accepting that people do need time to prepare for things, I was still skeptical of the three- to four-week estimate. I had observed appeal hearings before, and, as far as I could tell, city staff appeared to repeat the presentation they had already made to the Planning Commission. As for the resolutions which needed to be drawn up by the attorney’s office, they looked like boilerplate resolutions, which either affirmed or denied the Planning Commission’s decision. Getting them on the Council’s agenda shouldn’t take weeks.

In any case, regardless of how much work city staff devotes to appeals, the fact remains that Mark Baker’s appeal never had a chance, and nobody said anything about it until it was too late.  When Mr. Fulton and Mr. Van Tassel received notice of the appeal, on Dec. 7, they would have known immediately that Jan. 10 was too late for the appeal, and they could have notified the clerk’s office that a Dec. 17 deadline existed. Yet nobody said a word. It is hard to believe this was mere oversight.

“Why even bother scheduling these meetings, once you’re outside the window?” I asked Fulton. “What’s the point? It makes no sense.”

He replied, “I think that some guidance we received at that time was sort of how we made the determination about scheduling that, but, um, it’s…yeah, I mean, it’s regrettable. It was a mistake.”

Fulton added, “When that was done, we didn’t have a full level of information, and so that’s, you know, a clerical thing where we didn’t have enough information on, and when we received additional information, we changed course. But that was the process.”

I asked Fulton about the appeal hearing which had been scheduled for Dec. 20, but was later moved to Jan. 10. Fulton said the hearing had been postponed because planning staff needed additional time to complete their “internal review process.”

In any case, a Dec. 20 hearing would also have missed the Dec. 17 deadline. At that point, planning staff should not have been internally reviewing anything, because they should have known the appeal would not be heard. How could everyone in both the planning and city attorney’s offices be unaware of such an important deadline?

The materials accompanying the Skyline View Estates project contain a final plat of the property, which was prepared by the Planning Department. The plat is dated Dec. 21, 2021—only two business days after the Dec. 17 deadline. If planning staff had truly been confused, and truly preparing for an appeal at that time, they would not have been working on the project, due to the pending appeal. This dated plat provides strong evidence that somebody within the Planning Department was fully aware of the deadline. 

As the planners continued to work, nearly three more weeks would elapse before Mark Baker learned that his appeal had been canceled.

What city code says

According to Mr. Fulton, the city does not consider an appeal complete until the $400 fee has been paid. But city code says nothing about a fee. Section 50-37.1(O)(4)(b) of city code reads as follows:

Any appeal must be filed within ten days after the planning commission’s decision by filing with the city clerk a written notice of appeal addressed to the council and specifying the grounds for the additional appeal.

The code does not specify that a fee is required, or that it must be paid to start the appeal. As written, an appeal begins on the day it is filed with the city clerk. Thus, the city clerk should have begun planning Mark Baker’s appeal hearing on Oct. 8, rather than waiting until the fee was paid on Nov. 9.

On Jan. 24, I spoke with City Clerk Chelsea Helmer. She confirmed that city code did not spell out that a fee be paid before an appeal application was considered complete. Rather, the city relied on a “fee schedule” to make this determination. The fee schedule is a 19-page list, approved annually by the Council, which contains every possible fee the city may charge.

“We won’t schedule it until the fee is paid,” said Helmer. “It’s not referenced in [city code]. It’s by operation of a fee schedule.”

“I understand that there’s a fee that needs to be paid,” I said, “but, to me, reading city code, it looks like the appeal is complete, and it should be scheduled, as soon as it’s submitted to the city clerk. It doesn’t reference a fee in any way.”

“Right,” said Helmer. “But then the fee schedule says that you have to pay a $400 appeal fee … We’ve always said that we’ll schedule it as soon as we get the appeal fee.”

“We were definitely working with Mark Baker on that,” Helmer continued. “He also referenced the wrong appeal number the first time, but after talking with Planning, we were just, like, ‘No, we’re just going to accept the appeal.’ … And then we let him know [he had] to pay the appeal fee.”

As for Mr. Fulton’s explanation that the city rescheduled the initial Dec. 20 appeal hearing to allow time for more internal review, Section 50-37.1(O)(4)(d) of the code says:

The council shall hear the appeal at the next scheduled meeting with time available, and may affirm, modify or reverse the board’s decision, and may make any orders, requirements, decisions, or determinations it deems appropriate regarding the appeal.

The code does not say anything about allowing planning staff and attorneys time to review documents or prepare resolutions; it says the appeal will be heard at “the next scheduled meeting with time available.” The City Council had a wide-open day on Dec. 20; no other committee meetings or hearings were scheduled. There was no reason to reschedule it.

When I asked Clerk Helmer about this, she said that she did not recall the original Dec. 20 hearing date, but added that she was not involved personally with setting the calendar. “We’ve got other folks that just work on the scheduling. I can just tell you, from the clerk’s office perspective, it’s just an administrative function. We work with whoever the chair [of the Council’s Economic Development Committee] is, or staff, to get it scheduled.”

Helmer also confirmed that she had not been aware of the Dec. 17 deadline. I had the impression that I was the first person who ever told her about it.

“We were not advised of any deadline,” said Helmer, “—and I would assume we would be advised of a deadline, if there was a deadline.”

Parting thoughts

This case exposes a serious flaw in the appeals process, which can easily be abused. The city is unable to do anything directly about Minnesota Statute 15.99 and the Moreno case—beyond, as Planner Fulton said, encouraging state officials to change the law. But the city would be able to clarify the appeals process, on the city’s end, with three simple updates to city code.

1. If the city requires a fee to be paid before an appeal can be scheduled, city code should reflect that, if only by directing the applicant to the fee schedule.
2. If a deadline is attached to an appeal, the city clerk should know about it. As soon as the Planning Department is notified of an appeal, they should be required to notify the clerk of any deadlines. This requirement should be contained in city code.
3. With any action of the Planning Commission, the city should ensure that enough time remains before the deadline to allow for a potential appeal hearing. If an appeal is made at the eleventh hour, the City Council should be required to hold a special meeting to address it.

Future code changes will be unable to help Mark Baker today, of course. If Baker wishes to pursue the matter further, he will have to take it to the courts. He has indicated to me that he will probably not do this.

Currently, city staff and the Sugarloaf developers are working to finalize a development agreement for Skyline View Estates, which will appear on the City Council’s agenda at a future date.

______________________________

Cover photo: An excavator on the Sugarloaf property, just east of Highway 2 on Skyline Parkway. Credit: John Ramos