Otsego council adopts M‑1 mixed‑use zoning; allows taller buildings near Highway 101

The City of Otsego City Council voted 3–2 on May 27, 2025, to adopt Ordinance 2025‑04, establishing an M‑1 mixed‑use zoning district that sets standards for commercial and multiple‑family development in designated areas, including parcels near the County Road 39 and Highway 101 interchange.

The planning commission and staff framed the M‑1 district as a way to standardize mixed‑use standards rather than continue handling high‑density proposals on a case‑by‑case planned‑unit‑development basis. Dan, City planner, said the goal is to make these “commercial zoning districts that allowed for apartment uses” with a conditional‑use permit process and clear performance standards.

Key features of the new M‑1 district include a stepped building height approach: properties adjacent to Highway 101 may be allowed up to 75 feet (designed as roughly six stories with mechanical/elevator penthouse), areas immediately adjacent to certain roads are limited to 48 feet, and the first 100 feet of a property that abuts single‑ or two‑family residential uses would be capped at about 35 feet (three stories). The ordinance also sets a multiple‑family density guideline of roughly 1,000 square feet per dwelling unit (about 43 units per acre) and parking standards that can use a mixed‑use methodology to account for offset peak demand between residential and commercial uses.

The M‑1 draft preserves buffering: a landscaped 35‑foot transition yard with evergreen screening is required where mixed‑use buildings back to lower‑density residential zoning. For multiple‑family units with one or more bedrooms, the standard requires two off‑street parking stalls per unit, with at least one enclosed stall attached to the principal building for residents. Staff said the enclosed‑stall requirement was informed by the city’s 2018 multiple‑family housing study and subsequent comprehensive plan discussion.

The planning commission recommended approval after several refinements, including the stepped height transition and parking methodology adapted from the City of Wayzata. Dan told council the planning commission’s work was informed by prior applications and existing apartment projects in Otsego and that the M‑1 district is intended to foster stable commercial development supported by adjacent housing.

During council debate, some members said they supported allowing taller buildings in limited Highway 101 locations where topography and distance from single‑family areas reduce visual impact. Others opposed letting 75‑foot heights appear in locations where they would be out of character, such as County Road 19. The ordinance passed on a 3–2 vote; council members Corey and Ryan voted against it.