Burnsville Council Rebuffs Non-Profit, Institutes Ban on New Thrift Stores

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It's not personal, just business.

That's what Mayor Elizabeth Kautz told representatives of The Arc Greater Twin Cities as she and two members of the council voted through a measure banning new thrift stores for up to a year, much to the dismay of their dissenting colleagues and the local Chamber of Commerce.

The Arc, a non-profit that helps developmentally and intellectually disabled people, had hoped to turn a long-vacant building across from the Burnsville Center into its first thrift store location south of the Minnesota River. Ordinarily, the request would not have to come before the council at all. The Arc would simply have bought or leased the space and opened whenever it saw fit.

But the non-profit was seeking tax exempt funds from the St. Paul Port Authority, which had agreed to issue revenue obligations of up to $2 million. The Arc planned to use the money for acquisition and improvements of the building at 14232 Burnhaven Drive. The non-profit planned to plough in $500,000 of their own funds to remodel the building, which has been sitting empty since Ultimate Electronics went belly up last year.

In order to complete the transaction, however, The Arc had to get the City of Burnsville to grant "host approval."

Officials at The Arc did not anticipate a controversy.

"As a non-profit we feel that we'd be an asset to the community...Burnsville is really a wonderful commercial, retail destination," Laurel Hansen, business director for Arc's Value Village Thrift Stores, told the council after Kealey asked what had attracted The Arc to town. "As we looked at the available properties we felt this was the best fit."

Hansen said the deal would be a "win-win." A majority of the council was less inclined to agree, however.

Current city ordinances do not include regulations specifically pertaining to thrift stores, which are lumped in with general retail establishments. At a public hearing on Dec. 4, Community Development Director Jenni Faulkner suggested that the proposed Arc Value Village store might cause traffic backups from people dropping donations off, something that is allowed to all existing thrift stores in Burnsville. The city might want to rewrite the ordinance to require a "stacking plan" for donations that are left outside, she added. She further pointed out that originally The Arc had planned to park semi-tractor trailers in front, something they have since backed down on. 

The council agreed to table the issue until this Tuesday, by which time their concerns seem to have multiplied. Kautz and Council Members Mary Sherry and Bill Coughlin said they were put off by the city's lack of standards with respect to used-goods stores, and perhaps should regulate where such stores could be located. The city has discretion as to where such stores can be built and how far apart they should be from one another.

Mostly, their apparent qualms stemmed from perceived neglect at Burnsville's existing thrift stores.

"The thing I want to make perfectly clear is that my concern has nothing to do with my regard for your organization," said Council Member Mary Sherry. "To be honest and blunt, one of our shops is not very well kept and I find it very disturbing. It does hurt the community image and I'd like to get this nailed down."

They further objected that the non-profit would be taking a commercial property off the tax rolls. Representatives from The Arc offered to make payments in lieu of property taxes, and even put the agreement in black and white, but Kautz and others cautioned that such contracts were not necessarily enforceable.

The three argued that the city should ban thrift stores altogether for up to 12 months, which would give the city a chance to study the issue at length.

The Arc's counsel protested that a moratorium would put the kibosh on the whole project and compromise their ability to get any of the $2 million offered to them by the St. Paul Port Authority, which was predicated on the Burnsville location specifically.

"We certainly don't have a year to wait. It would effectively kill this purchase," said Steven B. Mayeron, attorney for The Arc.

The council voted to impose the moratorium 3-2, with Council Members Dan Gustafson and Dan Kealey voting against. In what may strike some as a paradox, the council approved The Arc's request for host approval as well. 

Kautz expressed confidence that The Arc could still pull the deal out the pocket, though the non-profit's counsel insisted that they could not.

"You have your tax exempt bond resolution. Hope you can work something out with the seller," Kautz said. "And you know what? I think you can."

The measure drew sharp criticism from Kealey, who called it "heavy handed" and "very unfriendly" to business. 

"I don't think we've shown this applicant a whole lot of respect. I think we're guilty of a poor decision here," Kealey said, adding that if the non-profit hadn't needed the city's consent to get the bond the council would be in no position to demand special conditions or compensation for lost property taxes. 

Chamber President Bill Corby also condemned the council's treatment of The Arc, saying that their actions could "send a negative message to other businesses who might come into the area."

"The free market system should determine the success, not a government entity," Corby said.

He added that an expensive study of the issue would not be a justifiable use of taxpayer funds, in his opinion.

The council has only enacted temporary moratoria a handful of times over the last 10 years. The last moratorium was imposed in 2008, said City Manager Craig Ebeling.