The Berwick debacle
The vacation rental issue is fairly new to Duluth. In 2013, noticing that many citizens were advertising online and renting out their homes to tourists for short-term stays, the city became concerned about the lack of regulation of such properties. After much discussion and debate, the city council in 2016 established a formal application process and safety guidelines for vacation rentals. They also capped the number of vacation rentals allowed in the city at 60. Since then, applications have come through steadily, at rate of about two or three a month. Today, there are 43 approved vacation rentals scattered across virtually every neighborhood in the city.
On February 14, 2017, the Duluth Planning Commission considered an application for a vacation rental permit at 1835 Berwick Court. On the surface, there was nothing to distinguish this application from the others that had preceded it—the applicant went through all the required steps and the city planning staff recommended approval. The one big difference was that this time the neighborhood’s property owners turned out in force to oppose it.
Your neighbors
Berwick Court is a pleasant cul-de-sac located off of Arrowhead Road near UMD. It is one of three interconnected cul-de-sacs sandwiched between Hartley Park and Arrowhead; the other two are Berwick Circle and Valhalla Drive. Twenty-eight houses are located on the three cul-de-sacs; among the inhabitants are some locally famous names, including Judge John DeSanto, who prosecuted the Elizabeth Congdon murder case in the 1970s and later co-wrote a book about it; Ellen Hedenberg, widow of Al Hedenberg, a Duluth contractor who built many notable structures (the Coppertop Church, the Radisson Hotel); and Al Amatuzio, founder of AMSOIL Incorporated in Superior. According to county records, property values in the neighborhood range from $220,000 for a four-bedroom home on Berwick Court to Amatuzio’s $577,000 estate on Valhalla.
The cul-de-sacs are unusual for a UMD neighborhood in that there are few, if any, rental properties there. This may explain the neighbors’ intense concern. During the public hearing on the matter, Julie Teske set the tone when she told the planning commission, “One of my concerns is the devaluation of my property, since there is now a rental [in the neighborhood]. Our home is my equity. It’s a quiet neighborhood with kids and everybody knows everybody’s kids….We take care of the roads [in] the cul-de-sacs….When the parties go on on Arrowhead Road, we pick up THEIR beer cans, we pick up THEIR McDonald’s bags. We are the owners of that area, and I am just opposed to it for those reasons.”
Neighbor Jim Gherna said, “It’s a unique, very, very unique neighborhood. If any of you have ever driven into Valhalla Drive...you can tell right away that you wouldn’t want to have any rentals in there….That rental would be parading people back and forth in front of everybody. This neighborhood’s such a unique place I wonder why the city of Duluth would want to destroy [it] when they don’t have to. This is a thing that really shouldn’t happen…. I want to know why the city of Duluth doesn’t protect and maintain the ambience of the neighborhood, our way of living.”
Bob Swanfeld said, “We are doing something for one individual at the cost of hurting the rest of the neighborhood. I don’t understand that. Why change a residential neighborhood that functions well now?...We don’t need a party house on Berwick Court.”
John Teske said, “I’m very fearful about if there’s any crime or anything that happens in this area….We worry about maybe a mobile home or something...parking there, when really the neighborhood is not set up for that kind of stuff.”
Kyle Smith said, “The thought that there’s gonna be additional traffic, people we don’t know coming in and out...is a little bit unsettling. I myself have two kids in the neighborhood. Everyone knows the kids. The fear is that these people that are coming in for two or four days are coming in and out and will not have that knowledge.”
Pat Francisco said, “We don’t need this. We do not need this. I hope you understand where we’re coming from. Thank you.”
Pat’s wife Patricia said, “This is a residential neighborhood and we all bought residential and anticipated that the city would protect it as residential….I’m opposed to it and appalled by it, quite frankly, and hope that you can understand that we want to protect our neighborhoods and keep them residential.”
Traffic, littering, parties, crime, falling property values, threatened children—to listen to the neighbors, you’d have thought a crack house was moving in.
The discussion
The neighbors’ comments notwithstanding, I fully expected the planning commission to approve the application, because they almost always approve things that meet the criteria set forth by the city.
Commissioner Janet Kennedy began the discussion by questioning whether neighbors had been adequately notified. Although the city had mailed out notices to residents within 350 feet of the proposed vacation rental, per the rules, some neighbors complained that they had only received the letters a few days earlier. Kennedy also wondered whether people had seen the notification sign posted in front of the property, because it was at the end of a cul-de-sac where the neighbors seldom went. “I don’t believe I can support this for those reasons,” said Kennedy, “—and probably a few more that may come up.”
“And probably a few more that may come up”? That seemed an odd thing to say. But Kennedy certainly did find other reasons to oppose the application before the meeting ended. One of her biggest objections was based on a misunderstanding of the rules.
When a person is approved for a vacation rental permit, they are required to provide neighbors within 100 feet with contact information for the managing agent of the property, so people know who to call if problems arise. The neighbors, however, interpreted this to mean that the applicant was supposed to have provided them with such information beforehand, and they seized on this as a horrible deficiency in the application. When a representative for the applicant tried to explain her understanding of the issue, the audience loudly and derisively shouted her down, to the point that commission president Zandy Zwiebel had to pound her gavel for order. Commissioner Kennedy apparently accepted the crowd’s uproar as proof that the applicant had failed to meet the notification requirement. City staff was also vague on the issue, which didn’t help.
Kennedy also objected to what she considered an inadequate buffer between the proposed vacation rental and the neighbors—a strange claim, as pictures of the applicant’s spacious lot made clear there was plenty of room.
Kennedy’s final concern seemed to be little more than a restatement of the angry neighbors’ fears and suspicions. “I don’t think that the minimization of the negative impacts to the surrounding residential users have been met,” she said. “I believe that there could be some damage to the residents’ safety and welfare if this isn’t really considered a little differently.” She didn’t offer any examples of what she meant by that.
Commissioner Tim Meyer’s reasoning was more straightforward: He opposed the application because the neighbors opposed it. “I have a hard time supporting this when we have so many people who are clearly opposed,” he said. “We know that the applicant has come in and they probably meet all of the requirements that are in place, [but one requirement] that really should be part of this that is not right now is the opinion of the neighbors….Personally, I’m not able to support this.”
Commissioner Terry Guggenbuehl began his remarks by chiding the neighbors for their anti-renter attitude. “It raises my ire a little bit when I hear people in an R-1 district [criticize renters]...Rentals are allowed in an R-1 district….If you own a single-family home, you have the right to go through these legal channels to get an interim use permit for a vacation dwelling unit.” He noted that if a vacation rental property had three police calls within six years, the city could revoke the permit. He also mentioned that all the criteria for the application had been met.
None of this surprised me, because Guggenbuehl has always been someone who pays attention to the guidelines. But he then proceeded to contradict his own statements and invent a totally new rule on the spot. “At the same time, I think we’re getting near the limit of what the city council has set for a maximum number of vacation dwelling units, and...I do think that we have the option of being much more selective from here on out. That’s why, for me, it’s not about the number of neighbors that show up. It’s a matter of ‘Is this the right fit for the neighborhood?’ Of course, it meets all the criteria, but I just think we can be selective.”
I was baffled. A resolution that I had expected to receive slam-dunk approval was suddenly on the verge of being denied for flimsy, made-up reasons. The final nail in the coffin was driven in by President Zwiebel herself. “The main reason [I’m voting against this] is that we are limited in the number of these units that we can license, and the neighborhood has made it very apparent they are not going to be welcoming to this sort of thing, so maybe this is not one of those places to put it. We’re being selective.”
Commissioners Garner Moffat, Luke Sydow, and Heather Wright Wendel all argued in favor of the application. Moffat in particular seemed amazed that the commission was taking the path it was. “I just want to say for the record that we haven’t used that criteria on other properties when we’ve looked at these. I want to make sure it’s noted that it’s a new criteria. The limit has not changed.”
“He’s saying that we’re going to get sued, is what he’s telling us,” President Zwiebel told the audience.
“It’s our option to vote for or against, whether it meets the criteria or not,” said Commissioner Guggenbuehl. “The city council has placed this arbitrary number in front of us….It’d be nice if we could say yes to all of these that fit the criteria, but I’m not sure that we can do that anymore.”
The measure failed 3-4. As the happy neighbors rose to leave, Zwiebel quipped, “Well, you can come testify for us when we’re in court.”
Analysis of the No votes
One or two unusual votes would not have surprised me—people aren’t always predictable—but to have four unusual votes that resulted in an extremely unusual denial of a vacation rental permit was something that made me sit up and take notice.
• Commissioner Kennedy
As I watched the meeting—and later, as I transcribed the tape—I was struck by what seemed to be Commissioner Kennedy’s determination from the start to find something wrong with the application. Throughout the meeting, she made no positive comments about it at all; rather, she continued to offer up new concerns, without trying to find solutions.
Normally, when commissioners are concerned that residents have not been sufficiently notified of something, they vote to table it until the next meeting in order to give neighbors another month to react. And when commissioners are concerned about the lack of a buffer, as Kennedy said she was, they generally attach a condition to the application asking the applicant to plant shrubs or build a fence. Kennedy did not even consider these usual remedies. She went straight to denial. I had never seen her treat any application so harshly, let alone one for a run-of-the-mill vacation rental.
• Commissioner Meyer
As Commissioner Meyer stated several times, he opposed the application because the neighbors did. He thought the neighbors’ feelings should be a factor in planning commission decisions. While this is a standard that has no basis in city code, and one that could easily be abused—imagine if the neighbors objected to, say, immigrants moving in—it was not a departure for Meyer to say such a thing. On several occasions over the years, he has voted against other measures for the same reason. Of the four No votes, Meyer’s was the most consistent with past behavior.
• Commissioners Guggenbuehl and Zwiebel
Since 2013, the planning commission has considered 45 vacation rental applications. Commissioners Guggenbuehl and Zwiebel have voted yes on 44 of them. Even on August 11, 2015, the only other time a vacation rental was turned down, they both voted yes. On numerous occasions, I have seen them vote against the wishes of neighbors, citing the standards they consider themselves bound to follow. I found it astonishing that they would suddenly abandon those standards simply because the city was approaching the vacation rental cap, and because they thought it was time to start being “selective.”
Even more surprising, they could give no solid reason for the change. If they were being selective, what was it about 1835 Berwick that triggered their selectiveness? There was nothing egregiously wrong with the property that I could see. Indeed, 1835 Berwick looked more inviting than plenty of other vacation rentals I had seen the planning commission wave through with no hesitation whatsoever. And Guggenbuehl himself acknowledged several times that the criteria had been met.
When I talked to Guggenbuehl after the meeting, he indicated that the underlying reason for his vote was that he disagreed with the city council establishing a cap on vacation rentals in the first place. “I feel like if we had unlimited vacation rentals, this one would have been a shoo-in….Frankly, I don’t think the city council should have set a limit. It should have been up to the planning commission.”
“I’m just confused as to what’s so selective about that particular neighborhood,” I said. “Why would you turn that one down?”
Commissioner Zwiebel approached and said, “Sometimes you’re human and you’re stupid! You know?”
“But why would you suddenly start being selective?” I repeated. “Why not just first come, first served?”
“It should be first come, first served,” Zwiebel said sadly. “I started feeling like if there are neighborhoods that are going to be unwelcoming of this...” She trailed off.
I finished her thought. “What you’re saying is if the neighborhood doesn’t want one of these, just have a bunch of people show up and say, ‘We’re going to be unwelcoming to this.’ And then you guys will be like, ‘All right. Well, they’re gonna be unwelcoming. Better not approve this one.’”
“I’m just human,” Zwiebel said. “Sometimes people are human.”
On February 17, Commissioner Zwiebel sent an email to the planning commission expressing regret for her vote. “I have come to the conclusion that my thoughts were in error the evening of February 14; and, having had the same file presented any other day, I believe I would have voted to approve….I believe one of the most influential reasons for my vote...was concern over visitors feeling welcome in the neighborhood; however, I do NOT believe I ever let that same consideration influence me in past votes….With more reflection, I feel that my vote has done an injustice to the applicant...I was obviously influenced by the level of public testimony.”
On February 18, I followed up with a phone call to Commissioner Guggenbuehl. After several days of reflection, he now said he regretted his vote. “My big issue is with the city council and this artificial limit they put on [vacation rentals]….I think there should be as many vacation rentals as the market allows….I mean, we’re a tourist town and we have universities that can benefit from vacation rentals, so that was my point. And I made it poorly, I agree….I probably overreacted….If you want to write about whether or not it was a dumb decision, I’d certainly agree to that. In retrospect, I shouldn’t have voted that way.”
The planning commission’s recommendation to deny the vacation rental will now go to the city council for final approval or denial. Undoubtedly, irate Berwick neighbors will pack the chambers as before—and the city council, unlike the planning commission, has often proven to be a place where mob rule sways votes. However, if the council denies this permit, they will be sending a message that they consider Berwick Court property owners to be more deserving of special consideration than other people. That is never a good message to send, particularly when the favored neighborhood is affluent and influential. We shall see what happens.
Note: I have emailed this article to councilors ahead of publication, so they are all aware of the full story and have plenty of time to consider their actions.
