A proposed townhouse development in both Deephaven and Minnetonka didn't receive the annexation from Minnetonka, as was requested.
Steven Scott Development requested the annexation so that the development, Deephaven Cove, could be in one city.
Currently, the site on County Road 101 houses Sullivan's Utility Service Inc. Of the 4.7 acres, 2.1 acres are in Minnetonka and 2.6 acres are in Deephaven.
At their Aug. 23 meeting, Minnetonka council members expressed reluctance in giving land away without getting anything in return.
"In reality, what do residents of Minnetonka get?" asked Council Member Brad Wiersum. "We get a lot of cons and not a lot of pros."
The city currently receives little tax revenue from the land. With the development, taxes are expected to be $150,000.
In addition, the new development would require medium density zoning - an increase in density from what is now zoned residential low density.
The proposed development includes 28 townhouses priced in the mid-$300,000 range.
Typically, when a developer asks for increased density, the city requests that affordable housing be included in the project.
The current plans do not call for any affordable units.
Scott Bader, with Steven Scott Development, said affordable units weren't included because Deephaven does not require them and because of economic reasons.
Wiersum compared the Deephaven Cove project to the Sanctuary project the council approved almost a year ago.
In that development, the city required that four of the 23 units be affordable.
"I'd have trouble looking them in the eye if I approve this," said Wiersum.
Bader did agree to pay up to $175,000 for storm sewer improvements and is providing a small conservation easement.
Council Member Al Thomas said he was surprised that the developer wanted the project to be in Deephaven, when Minnetonka offers amenities Deephaven does not.
Deephaven does not have city water, a service Minnetonka provides. The plans call for the proposed development to be served with private wells.
The state has yet to approve the well digging. Bader does not anticipate the approval being a problem, despite the fact that some of the land is contaminated.
Even with approvals, council members expressed concern that the homeowners would later ask to be hooked up to Minnetonka's water system - something Deephaven residents have asked for in the past.
The decision to ask Minnetonka for annexation was determined because Deephaven was unwilling to cede the land to Minnetonka, according to Bader.
"Deephaven made it very clear they did not support annexation," said Bader.
The development would clean up the site that currently houses several utility businesses, which have numerous vehicles on the site and store equipment outside.
"This site desperately needs to be cleaned up," said Anderson.
Council members seemed more inclined to support annexation if the project included affordable housing.
An option mentioned by Council Member Terry Schnieder was to make the road in the development private, include two affordable units with Minnetonka providing water for all of the tenants.
"If I can do something, I will. If I can't, I'll withdraw it," said Bader.
Annexation in Minnetonka
In recent years, there have been two cases of annexation involving Minnetonka.
In 1994, St. Louis Park agreed to annex a piece of land that was isolated from the city by Highway 169's reconstruction.
Minnetonka agreed to pay St. Louis Park $25,000 for each structure built on the land. Currently, only one structure has been built.
At the time, St. Louis Park did not put any restrictions on what could be developed on the land.
The most recent annexation occurred in 1998 with the city of Wayzata.
A small piece of land was annexed to Wayzata so the Lexus dealership on Interstate Highway 394 could be in one city.
For the land, Minnetonka prohibited outdoor loudspeakers on the property, which had been a concern for neighbors.