Trade associations react with new programs
In many southeastern Wisconsin communities, the focus has shifted from attracting development to controlling it. That means more restrictive zoning, more impact fees and more requirements for open space. And pending state regulations mean more stringent and expensive stormwater requirements for new development.
What it means for developers is more headaches.
That’s why two development-related associations serving the area — in independent efforts — are focusing resources on monitoring and potentially influencing local ordinances and state regulations that affect development.
Wisconsin’s Commercial Association of Realtors is undergoing a nationwide search for an individual to head up government relations efforts. A source within the association said that it is premature to say exactly what the duties of the new hire would be, but they would involve keeping track of municipal policies and ordinances in southeastern Wisconsin communities and perhaps seeking to provide input on policy decisions.
Meanwhile, the Metropolitan Builder’s Association has created a Commercial and Industrial Property Alliance comprised of developers concerned about the impact of policy-makers’ decisions on their industry.
Municipal regulation confusing
Some developers stress that more peripheral suburbs that are more interested in development are easier to work with than older-growth communities that are established and not as development-friendly.
But Southeastern Wisconsin Regional Planning Commission (SEWRPC) Executive Director Phil Evenson stressed that other factors are at work in the proliferation of municipal rules governing community development.
"As our communities mature, we have a hell of a lot more local planners," Evenson said, adding that SEWRPC had not drafted a local zoning ordinance for a community in years. "I would expect that an increase in the number of planners would lead to an increasing disuniformity because of differing opinions and theories of these planners. In Wisconsin, we delegate these land-use decisions down to the lowest level of government."
Disuniformity or not, some municipalities are definitely easier to work with than others, according to Burke Properties President Paul Votto.
"Menomonee Falls is tough," Votto said. "But when they tell you something is going to be X, you know it is going to be X."
Not so with all communities, Votto said. The Village of Grafton’s zoning code, for instance, has been confusing to Votto and other developers.
"A while ago, Grafton made a change to its zoning code that describes acceptable uses in office/light industrial zoning," Votto said. "Typically, a description of T-1 zoning would say what is allowed, what comprises a special use and what is not allowed. They might say they permit light industrial, light manufacturing and office use."
But when Grafton decided a year and a half ago to use Standard Industry Classification Codes to define what businesses could and could not go into various zoning, they opened a can of worms, according to Votto.
Votto said it seemed that some of the SIC designations were designed to funnel certain types of development to the village’s downtown.
"We lost two or three deals because of that," Votto said.
In one instance, a Porters of Racine furniture clearance center was denied a variance. But another instance sticks even harder in Votto’s craw.
A branch office of Shorewest Realty was turned away from one of Votto’s properties because the village determined that the office represented more of a commercial use — which generates more traffic — than an office use.
"They had asked for an industrial property to be either rezoned or additional allowable uses in light of its location adjacent to Highway 60," village administrator Darrell Hofland said. "We wanted to maintain the area as light industrial."
Votto stressed that the change in zoning happened while one of his Cygnet Meadow Business Center buildings was already up and fully leased and the other was under construction. The SIC-driven zoning identified the area as a Planned Industrial Development, which allows some office use, depending on SIC code.
"Without question, it slowed rent-up," Votto said of the zoning change. "We thought this would be a mixed-use office and light industrial development just like our other buildings. Some of our buildings turn out 100% office — it just depends on demand."
However, Hofland and zoning administrator Tom Johnson admitted that office was a permitted use in the area Shorewest was kept from.
"It is difficult because our code is based on SIC codes — and that book is two inches thick," Johnson said.
"In the SIC code, it falls outside of the permitted use. It was more of a service-oriented business with expectation of higher traffic," Hofland said.
Shorewest wound up in a competing building owned by former Ozaukee County Board member and Grafton resident Lew Herro, who, along with a group of other investors, owns 16 acres around Grafton’s Village Hall. Herro’s property, the Franz Building at Cheyenne Avenue and Highway 60, is zoned for offices.
According to Evenson, this decision, combined with the gray areas left by the zoning code, creates an appearance of inconsistency that is to be avoided.
"Democracy works imperfectly, and sometimes it would appear that favors have been granted," Evenson said. "The laws should be applied fairly and uniformly."
"I knew there was some politics behind the scenes," Votto said. "We could just sense it when we went in there."
Hofland indicated that, in many instances, the village board actually decides for itself what a business’s SIC code is.
"Most applicants are unaware of what their SIC code is," Hofland said. "We ask for a narrative of their business operations and the village makes a determination. If a business knows what its SIC code is, then the village will utilize the SIC listing. Otherwise, the Village will assign the closest SIC code based on a narrative provided by the business."
State stormwater regs about to tighten
As developers are substantially changing the way their projects are designed to accommodate tighter federal and state regulation on the quality of stormwater runoff discharged from new development, a group of developers had been meeting to determine a strategy for dealing with the next wave of stormwater regulation.
New rules to reduce the amount of silt and other pollution washing into rivers, streams and lakes are driven by the Clean Water Act of 1977. After the federal government tightened restrictions on point-source pollution — contamination that drained into waterways from industrial and wastewater discharges — the mandate to create swimmable and fishable waters had not been met. So the Environmental Protection Agency (EPA) turned its attention to nonpoint sources — specifically stormwater that runs off the hard surfaces of developed properties.
The EPA delegated much of the authority to administer its tighter restrictions on stormwater to the states, and in the State of Wisconsin, the Department of Natural Resources (DNR) pushed much of the responsibility onto the municipalities. Certain cities, villages and towns named in the EPA’s rule had to apply to the state for a stormwater permit to prove they were meeting specific guidelines for controlling stormwater quality.
The DNR also encouraged communities named in the EPA’s rule to petition to pull their neighbors into the stormwater permitting program, and required all municipalities and towns that applied for certain types of state aid to also meet the same performance criteria set up for their permitted counterparts.
So one by one, municipalities have been passing stormwater control ordinances, requiring detention basins to clarify water before discharge. In some cases, infiltration of a certain amount of stormwater is required.
Stormwater regs spur action
According to Matt Maroney, executive director of the Metropolitan Builders Association in Milwaukee, stormwater regulation was one of the central concerns of developer Michael Mooney of NAI MLG Commercial in the formation of the Commercial and Industrial Property Alliance.
"We were approached by Mike Mooney at MLG to host a Commercial and Industrial Property Alliance," Maroney said. "The group was formed, and its first meeting was in November."
The concerns of the group will be regulatory issues that affect development but, so far, NR151 has been the hot topic of conversation, according to Maroney.
"One of the main points of concern is a new rule regarding stormwater management," Maroney said. "Wisconsin is trying to implement some rules that will be very costly to land owners. The revised draft came out the early part of September."
One of the tougher provisions of NR151 is that, while development generally reduces the percentage of a piece of land that can absorb rainwater, post-development each development will have to soak up 60% of what it did pre-development.
NR151 and other stormwater-related rules were to be considered for final approval by the Natural Resources Board during its meeting Jan. 22 and 23. "Infiltration is problematic," Maroney said. "It is something that has been done on the east and west coast. There is concern as to whether Wisconsin wants to try to do something that might be problematic given our climate and tight soils."
February 1, 2002 Small Business Times, Milwaukee
