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MEMORANDUM DATE: 07/16/03 MEETING DATE: 07/22/03 TO: Mayor and Council Members FROM: Susan M.H. Hall, Assistant City Manager SUBJECT: Amcon Construction/Stonehouse Redevelopment Requested Action: The City has entered into a predevelopment agreement with Amcon Construction to redevelop the corner of Kenzie Terrace and Highway 88, also known as the Stonehouse and/or Fire Station sites. Amcon has submitted the formal applications for public hearings associated with their final plans. July 15 was the public hearing for the following: (a) A conditional use permit for a proposed restaurant, which is less than 250 feet from a residential structure or district; (b) A conditional use permit for a proposed on-sale liquor store; (c) Two front yard setback variances of 30 feet each for a proposed setback of 5 feet at the building corners; (d) One rear yard setback variance of 10 feet for a proposed setback of 10 feet at the southeast corner property line jog; and (e) Parking variance of 40 stalls for a proposed 40 parking stalls for a sit-down restaurant (petitioner at the Planning Commission meeting changed the request to a parking variance of 27 stalls for a proposed 120 stalls for a sit- down restaurant and adjacent retail—shared parking stalls). In addition to the above, the applicant requests an administrative subdivision. Although a public hearing is not required at the Planning Commission level, the item was discussed and referred onto the City Council with a recommendation (see Dorsey and Whitney memorandum attached). Background: Redevelopment plans show 26,000 square feet of retail in two buildings. The development will include a new municipal liquor store of 9,000 square feet, a new restaurant Spectators at 6,000 square feet, and some other tenants, yet to be named, in the remaining 11,000 square feet. The site area is 2.39 acres. The development will encompass two buildings. One building would be located on the northern portion of the property, located at the corner of Kenzie Terrace and Highway 88, and the other new building would be situated where the existing strip center (see site and building plans attached). The subject properties at 2900 Kenzie Terrace and 2700 Highway 88 are zoned commercial. Amcon is requesting two conditional use permits. The first one for the restaurant, as restaurants located less than 250 feet from a residential structure or district is a permitted conditional use in commercial districts. The condition items to consider here