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12/12/2017 - City Council SpecialSPECIAL CITY COUNCIL MEETING TUESDAY, DECEMBER 12, 2017 5:30 P.M. EAGAN ROOM EAGAN MUNICIPAL CENTER AGENDA I. ROLL CALL AND ADOPTION OF THE AGENDA II. VISITORS TO BE HEARD III. JOINT MEETING WITH AIRPORT RELATIONS COMMISSION • Proposed 2017-2018 Airport Relations Commission Work Plan IV. REVIEW FINAL POLICE DEPARTMENT/ CITY HALL REMODEL DESIGN CONCEPT V. SHORT TERM RENTALS DISCUSSION VI. SPERRY TOWER LIGHTING POLICY REVISIONS VII. OTHER BUSINESS VIII. ADJOURNMENT Agenda Information Memo December 12, 2017, Eagan City Council Meeting III. JOINT MEETING WITH THE AIRPORT RELATIONS COMMISSION A. Proposed 2017-2018 Airport Commission Work Plan Action To Be Considered: There is no formal action. The ARC is prepared to give an update on 2017 aviation operations in Eagan, followed by a summary of the proposed 2018 Work Plan. Formal action to consider the work plan will be added to a future City Council consent agenda. Facts:  The Airport Relations Commission (ARC) is prepared to dialogue with the Council about year-to-date aircraft operations in Eagan, as well as the Commission’s proposed 2017-2018 ARC Work Program.  The Council will recall that 2016 was a transition year for the FAA as they attempted to reduce the number of departures on Runway 17 (the “North/South Runway) following changes that were made pertaining to Converging Runway Operations (CRO). The FAA communicated that in 2017, the City of Eagan should expect fewer departures on Runway 17, but likely more arrivals.  The Commission will present a 2017 operational overview using data provided by the Metropolitan Airports Commission (MAC), speaking to trends in 2017 and how aviation operations impacted Eagan.  The Commission is also prepared to discuss their proposed work p lan for the coming year and respond to any questions of the Council.  If so directed by the Council, formal action can be included on the December 19, 2017 City Council consent agenda to approve the 2017-2018 ARC work program. Attachments: III-1 2017 Operational Summary from the MAC III-2 Proposed 2017-2018 ARC Work Plan 382,960385,476418,486444,202459,405469,040485,480491,273482,872510,420522,253501,252507,322508,162540,727531,947475,633453,566449,972432,604435,583435,076424,928431,573411,760404,374412,898349,805200,000 250,000 300,000 350,000 400,000 450,000 500,000 550,000 600,000 1990199119921993199419951996199719981999200020012002200320042005200620072008200920102011201220132014201520162017*SOURCE: FAA OPSNET MSP ANNUAL OPERATIONS *THROUGH OCTOBER 31 324,392324,973347,432370,997383,249392,026408,097411,348400,966425,424439,335424,744425,180424,681452,343451,537398,922379,420379,379366,073365,048367,886358,211363,129347,425339,992347,103349,805200,000 250,000 300,000 350,000 400,000 450,000 500,000 550,000 600,000 1990199119921993199419951996199719981999200020012002200320042005200620072008200920102011201220132014201520162017SOURCE: FAA OPSNET MSP ANNUAL OPERATIONS JAN -OCT 396,038 375,841 369,931 377,784 380,382 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 2013 2014 2015 2016 2017 MSP OPERATIONS (JAN -NOV) ARRIVALS DEPARTURES SOURCE:MACNOMS 4 12L 12R 17 22 30L 30R 35 2013 7 38,299 39,617 17 56 39,446 45,122 35,493 2014 20 34,893 37,299 75 39 38,698 42,993 33,578 2015 57 42,152 47,046 100 235 36,461 37,513 21,494 2016 19 45,121 51,805 33 137 45,799 36,928 9,174 2017 4 38,350 45,774 44 257 51,030 42,277 12,529 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 MSP ARRIVALSMSP ARRIVALS BY RUNWAY (JAN -NOV) 2013 2014 2015 2016 2017 SOURCE:MACNOMS 2013 2014 2015 2016 2017 12L 19.3%18.6%22.8%23.9%20.2% 12R 20.0%19.9%25.4%27.4%24.1% 30L 19.9%20.6%19.7%24.2%26.8% 30R 22.8%22.9%20.3%19.5%22.2% 35 17.9%17.9%11.6%4.9%6.6% 0% 5% 10% 15% 20% 25% 30% MSP ARRIVAL RUNWAY USE (JAN -NOV) 12L 12R 30L 30R 35 SOURCE:MACNOMS 4 12L 12R 17 22 30L 30R 35 2013 68 26,073 12,698 46,935 55 61,120 51,029 3 2014 293 24,345 12,245 43,053 88 62,576 45,624 22 2015 77 29,888 13,772 54,583 112 47,598 38,825 18 2016 143 30,684 14,319 63,923 84 38,789 40,807 19 2017 14 25,472 11,210 59,721 246 50,394 43,060 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 MSP DEPARTURESMSP DEPARTURES BY RUNWAY (JAN -NOV) 2013 2014 2015 2016 2017 SOURCE:MACNOMS 2013 2014 2015 2016 2017 12L 13.2%12.9%16.2%16.3%13.4% 12R 6.4%6.5%7.4%7.6%5.9% 17 23.7%22.9%29.5%33.9%31.4% 30L 30.9%33.2%25.7%20.5%26.5% 30R 25.8%24.2%21.0%21.6%22.6% 0% 5% 10% 15% 20% 25% 30% 35% 40% MSP DEPARTURE RUNWAY USE (JAN -NOV) 12L 12R 17 30L 30R SOURCE:MACNOMS 4 12L 12R 17 22 30L 30R 35 2013 4 1,616 3,339 12 4 4,588 1,976 208 2014 10 1,736 3,694 2 5,201 2,635 245 2015 14 2,736 4,530 1 58 4,792 2,856 206 2016 8 2,917 5,080 4 20 5,666 2,456 185 2017 2 1,902 4,581 22 6,594 2,816 575 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 MSP ARRIVALSMSP NIGHT ARRIVALS BY RUNWAY (10:30 PM -6:00 AM) (JAN -NOV) 2013 2014 2015 2016 2017 SOURCE:MACNOMS 4 12L 12R 17 22 30L 30R 35 2013 6 664 1,036 454 2 874 506 3 2014 40 517 1,062 485 2 1,036 466 4 2015 4 815 1,324 556 20 988 668 13 2016 36 1,387 1,985 492 4 1,602 1,084 3 2017 930 1,573 375 3 1,653 1,096 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 MSP DEPARTURESMSP NIGHT DEPARTURES BY RUNWAY (10:30 PM -6:00 AM) (JAN -NOV) 2013 2014 2015 2016 2017 SOURCE:MACNOMS 2017-2018 Eagan Airport Relations Commission (ARC) Work Plan Work Plan Topic Presenters/Invited Guests Schedule (tentative) Regular ARC Meeting and Annual Goals Workshop  Review resident complaints and corresponding operational data  Workshop to prepare 2017-2018 ARC Work Plan Tuesday, September 12, 2017, 7pm Regular ARC Meeting (to follow meeting with Council)  Presentation: MSP Plans for the Super Bowl  Web Demonstration on new interactive reporting capabilities  Review 2018 Noise Oversight Committee Work Plan Phil Burk, MSP Operations Director Bradley Juffer, MAC Asst. Mgr of Noise, Environment and Planning Tuesday, November 14, 2017, 7pm Joint Meeting with the City Council  Presentation of ARC 2017-2018 Work Plan  Impacts of runway use changes associated with Converging Runway Operations (CRO) Tuesday, December 12, 2017, 5:30pm, Eagan Room Regular ARC Meeting  MSP Fleet Mix Update  Receive presentation on Canada’s transition to privatized air traffic control  Review Remote Monitoring Tower (RMT) locations for coverage and effectiveness Dana Nelson, MAC Mgr—Noise, Environment and Planning Tuesday, January 9, 2018, 7pm Community Connections Event  ARC volunteers sought to staff a booth with other commissioners focused on the role of Advisory Commissions March 3, 2018 (afternoon, specific time TBD) Regular ARC Meeting  Update on the FAA Center for Excellence and Transportation Research Board (TRB) Research Initiatives Tuesday, March 13, 2018, 7pm 2017-2018 DRAFT Work Plan November 14, 2017 Work Plan Topic Presenters/Invited Guests Schedule (tentative) Joint Meeting with Mendota Heights’ ARC  State of the Airport Update/Reimagine MSP  Request on-site meeting at MSP Airport for a tour of projects approved through the MAC Capital Improvement Plan (CIP) Brian Ryks, MAC Executive Director Dana Nelson, MAC Mgr—Noise, Environment and Planning Mitch Killian, MAC Government Affairs Director Tuesday, May 8, 2018, 6pm, location MSP Airport or MAC Regular ARC Meeting or Aircraft Demo  View A321 v MD88 Aircraft (could be virtual tour)  Invite acoustical expert to speak on how people perceive noise  Why does the FAA use 65 dB DNL as the noise threshold? TBD Tuesday, July 10, 2018, 7pm 2018-2019 Goals Workshop Tuesday, September 11, 2018 Ongoing ARC Efforts  Monthly review of MAC technical reports, including Corridor compliance, fleet mix, and runway usage  Receive feedback from the public on airport issues  Discuss Next Generation and Stage V Aircraft developments  Review and provide feedback on Noise Oversight Committee initiatives and studies  Ongoing communication efforts about airport issues via Experience Eagan, City website, social media and cable TV  Participation in MAC aviation disaster drills  Host Town Hall Meetings or go to the community (e.g. Market Fest) as airport issues significant to the Eagan community arise Review at monthly ARC meetings in 2017-2018 Special City Council Workshop December 12, 2017 IV. Review Final Police Department/City Hall Remodel Design Concept Action to be Considered: To provide feedback to staff and the architectural team on the proposed final design and budget for the Police Department and City Hall remodeling efforts. Facts:  On May 2, 2017, the City Council approved a contract with Wold Architects and Engineering for architectural design services and construction support for building improvements at the Police Department and City Hall.  Over the past six months, the Wold team, along with Assistant City Administrator Miller and Director of Parks and Recreation Pimental, have led an inclusive and participatory process with City staff to prepare schematic and final designs for the building modifications.  John McNamara, Wold Partner-in-Charge and lead architect on the project, along with Architect Melissa Stein, will be at the December 12 workshop to brief the Council and seek feedback on the proposed final design and project budget.  Ms. Miller and Mr. Pimental will be available to speak to the phasing plans during the project, which include how City services will be provided during the approximate 18 month remodel.  City Administrator Osberg and Finance Director Pepper will be available for any questions pertaining to financing of the City’s capital building projects.  Pending Council direction, the final design will be included on the December 19, 2017 City Council agenda for formal consideration.  The project schedule is proposed as follows: o Jan 16, 2018: City Council approves plans and specifications; authorizes receipt of bids o Feb 22, 2018: Bids due o March 6, 2018: City Council awards contract o May 2018: Construction begins Attachments: IV-1 Presentation on Proposed Final Design and Budget Eagan City Hall and Police City Council Meeting December 12, 2017 Agenda 1.Guiding Principles 2.Space Summary 3.Site Plan Solution 4.Proposed Layout 5.Project Schedule 6.Budget 7.Next Steps Guiding Principles/ Statements: »Anticipate the needs of the City for the next 20 years. The facility needs to consider the long-term build out of the City. »A comfortable work environment which staff and city takes pride in. »Strive for a safe, yet open and publicly welcoming facility. »The facility should encourage efficiency, interaction and collaboration among all departments. »Achieve best function and natural workflow organization for the department, not just expansion. »Provide secure parking to protect the City’s investment in vehicles and technology. »Better evidence/property management, processing and storage. Guiding Principles Space Summary City Hall: Lobby Council Chambers Administration IT Planning/ Zoning Engineering Parks and Recreation Staff Support Police: Command Staff Records/ Lobby Patrol Investigation and Evidence Prisoner/ Processing/ Holding Fleet Service/ Vehicles Staff Support Existing 1,800 S.F. 2,226 S.F. 4,241 S.F. 570 S.F. 3,505 S.F. 3,445 S.F. 2,789 S.F. 5,572 S.F. TOTAL:24,148 S.F. Schematic Design 1,638 S.F. 2,226 S.F. 3,574 S.F. 1,431 S.F. 3,114 S.F. 2,867 S.F. 1,851 S.F. 10,471 S.F. 29,291 S.F. Existing 2,456 S.F. 2,974 S.F. 5,143 S.F. 4,117 S.F. 2,683 S.F. 1,229 S.F. 4,052 S.F. TOTAL:21,639 S.F. Schematic Design 2,353 S.F. 3,237 S.F. 5,740 S.F. 7,508 S.F. 2,453 S.F. 21,175 S.F. 4,549 S.F. 47,014 S.F. Design Development 3,947 S.F. 2,226 S.F. 3,430 S.F. 1,262 S.F. 2,866 S.F. 2,250 S.F. 1,582 S.F. 10,464 S.F. 28,026 S.F. Design Development 2,119 S.F. 2,804 S.F. 5,792 S.F. 7,522 S.F. 2,284 S.F. 19,516 S.F. 5,909 S.F. 45,945 S.F. Space Summary City & Police Departments: City Hall Police Department SD 29,291 S.F. 47,014 S.F. 76,305 S.F. Existing 24,148 S.F. 21,639 S.F. TOTAL:45,787 S.F. Design Development 28,026 S.F. 45,945 S.F. 73,971 S.F. Site Plan City Hall Addition Training Room Police Garage Addition Police Addition Parking lot Expansion Police Squad Entry/ Exit Reconstructed Plaza Secure Fence Secure Fence City Hall CITY HALL MAIN LEVEL City Hall CITY HALL UPPER LEVEL Police POLICE MAIN LEVEL Police POLICE MAIN LEVEL GARAGE Police POLICE UPPER LEVEL Police Garage Police Addition Training Room SWAT Garage City Hall Addition Police Vestibule City Hall Vestibule Existing City Hall Existing Police Building Additions Perspective –City Hall Interior Lobby Perspective –Police Upper Level Project Schedule Budget Construction Costs Site Preparation Architectural/ Structural Mechanical Electrical $860,000 $ 5,900,000 $4,740,000 $1,800,000 $13,300,000 Project Costs Fees and Testing Furniture, Equipment, Move Costs Contingency $ 1,250,000 $1,000,000 $137,500 $2,400,000 Subtotal Construction Costs Subtotal Project Costs TOTAL PROJECT COST $ 15,700,000 QUESTIONS? Agenda Information Memo December 12, 2017 Special City Council Meeting V. Short-Term Residential Rentals – City of Eagan Direction to be considered: Direct staff to work with the City Attorney on a City Code amendment accommodating Short-Term Residential Rentals. Or Direct staff to retain the minimum 30-day rental requirement. Facts:  The City Council most recently discussed short-term rentals at their July 11th Special Meeting.  In addition to background information provided by staff and some letters of support, the Council had dialogue with two residents (Murphy McCann and Rosemary Ndupuechi) that are proponents and purveyors of the activity.  Reference was made at the special City Council meeting on July 11, 2017 to various State of Minnesota and MN Department of Health (MDH) regulations that could affect the operation of short-term rental (STR) uses.  A “hotel/motel” or “lodging establishment” license from the MDH is required for the rental of a home for public lodging accommodations as those terms are defined in MN State Statutes and MN Rules.  In 2015 Staff communicated with MDH and confirmed that it deems short-term rentals to fall within the lodging license requirements.  The City is not required to enforce the MDH license or other State regulations. Yet, the City may require that any lodging rental operating within the City have a valid MDH lodging license.  The Minnesota Sales tax and local lodging tax also applies to STR’s, as all lodging rentals in the City are required to pay the City lodging tax.  Enforcement and collection of Eagan’s lodging tax would be the City’s responsibility.  Should the City license STR’s, the City would be required to obtain the individual STR’s Minnesota Tax identification number and submit the same to the MN Department of Revenue.  On July 11th, the City Council directed staff to research policies and regulations on short-term rentals enacted by other cities. San Francisco is a popular short- term rental destination as well as the headquarters of Airbnb. A handout describing San Francisco’s regulations is attached. Minneapolis, St. Paul and Duluth each recently revised their short-term rental ordinances and a table summarizing their ordinances is attached.  Information received from the public since July 11 is attached.  Finally, previous information provided by the ECVB, the City Attorney and a staff summary memo are also attached to provide additional background.  The City Attorney will attend Tuesday’s meeting Attachments: (8) SPCC V-1 Table illustrating recently adopted local regulations SPCC V-2 07-11-17 Council Minutes SPCC V-3 McCann slides supporting STRs SPCC V-4 Grinde letter and materials in opposition to STRs SPCC V-5 San Francisco Short-Term Rental Regulation Summary SPCC V-6 ECVB research and comments SPCC V-7 07-05-16 STR Summary Memo SPCC V-8 04-02-15 City Attorney Memo regarding transient lodging Comparison Table Short-term Rental Ordinances in Minneapolis, St. Paul, and Duluth Minneapolis St. Paul Duluth Owner-occupied Rentals License not required Allowed with license, but cannot be used for commercial or social events. For multi- family buildings, 50% of units can be short-term rental but no more than 4 units/building. City Accessory Home Share Permit and MN Dept of Health Lodging License are required. Non-owner-occupied rentals Tier 1 or Tier 2 rental license required (regulated as an apartment or other rental unit) Same as owner- occupied rentals. City Vacation Dwelling Unit Permit required – limited to 60 permits issued. MN Dept of Health Lodging License also required Short-term rental hosting platforms Annual license: $630 for platforms with <150 listings, $5,000 for platforms with 150 or more listings Hosting platform license required ($10,000). Platform required to remove all hosts not in compliance with city, state, or federal laws. Not addressed. Fire Safety Inspection Required as part of regular rental license program with frequency dependent on tier Fire Certificate of Occupancy required for non-owner-occupied units. City Fire Operational Permit required. Insurance Not addressed Must provide certificate of liability of at least $300,000 with city listed as certificate holder OR use platform that provides equal or greater coverage Not addressed. Local Taxes Not regulated as hotels Keep lodging log and provide annual proof of lodging and sales tax payment. Duluth tourism tax is applied State Taxes Not addressed Remit all local, state, and federal taxes unless the rental platform does so on host’s behalf State Tax ID must be included on application MINUTES SPECIAL CITY COUNCIL MEETING JULY 11, 2017 5:30 P.M. EAGAN MUNICIPAL CENTER City Councilmembers present: Mayor Maguire, Bakken, Hansen and Tilley. The meeting began at 5:35 p.m. Councilmember Fields arrived at 5:37 p.m. City staff present: City Administrator Osberg, Assistant City Administrator Miller, Community Development Director Hutmacher, City Planner Ridley, and Director of Public Works Matthys. ROLL CALL AND ADOPTION OF THE AGENDA Councilmember Bakken moved, Councilmember Hansen seconded a motion to adopt the agenda as presented. Aye: 4 Nay:0 VISITORS TO BE HEARD There were no visitors to be heard. SHORT TERM RENTAL CONSIDERATIONS City Administrator Osberg introduced the item noting back in May staff shared with the Council correspondence received regarding Airbnb's operating in the City of Eagan. The property owners are requesting the Council to reconsider the current short-term rental stance. Osberg noted the topic of Short -Term Housing Rentals was discussed by the Council at a work session in 2014 where a significant amount of information was submitted and considered by the Council. Earlier this year a short-term rental complaint was made and staff's research revealed approximately one dozen Eagan residential properties that were listed on short-term rental sites. City Planner Ridley gave a staff report. Murphy McCann, 1601 McCarthy Road and Rosemarie Ndupuechi, 1485 Lone Oak Road, addressed the Council regarding their Airbnb businesses in Eagan and were available for questions. The City Council discussed short-term housing rentals. After further discussion, the Council directed staff to research how other metro and out-of-state cities handle short-term rentals, policies and local regulations regarding Airbnb-type uses and bring back to a future Council workshop. MULTI -FAMILY PARKING CONSIDERATIONS City Planner Ridley introduced the item noting the City Council and Advisory Planning Commission have encountered parking deviations from the parking standards with enough frequency over the past several years that Council requested staff research requirements in other metro cities. Ridley noted Eagan's City Code parking standard for multi -family residential is two stalls per unit, with at least half of the spaces required to be enclosed. The City Code does not differentiate between senior living and market -rate apartments. The Council discussed multi -family parking considerations. Short-Term Rentals City of Eagan, Minnesota Purpose The purpose of this presentation is to discuss not only the importance of allowing residents to be able to rent their homes for financial reasons but also the advantages that it can bring to the City of Eagan without taking away from existing businesses. To work through and propose an approach to allow Short-Term Rentals Not to lose sight on the fact that many of those that are doing Short-Term Rentals in the city of Eagan, including myself, financially need to do it to avoid creating a hardship. What we know about Short-Term Rentals Airbnb alone now has listings in almost 200 Countries and ~35,000 Cities. Airbnb is a useful source for travelers and homeowners looking for new vacation experiences for the right price tag that they would not do within a hotel. Short-Term Rentals are gaining such an amazing speed that organizations such as Delta Airlines are promoting Airbnb when booking a trip and providing points 34% of Americans would be less likely to visit a destination where short-term rentals are banned (Goldman Sachs Consumer Research Survey 2016) There are always Pros and Cons to everything, but working to minimize the issues is easier than running from them It is often discussed that Short-Term Rentals are the source of problems such as noise complaints, when in fact those problems are just as prone to occur with long-term renters or residents living in their homes full-time We personally pre-screen all our guests before allowing them into our home and we have a very strict list of rules that are to be followed. Benefits to the City of Eagan With the Rapid growth of short-term rentals, allowing such rentals increases Eagan’s economic impact (shopping, eating, drinking, etc.) without necessarily taking away for our local hotels. Our house only rents to between 10-12 guests. Many guests have stated they would never have come to Eagan if they couldn’t have kept their family in the same house. Short-Term Rentals support Tourism Increases supply and diversity of visitor accommodations Provides needed capacity for peak seasons and major events With the proximity of the MOA, Airport, and Viking Training Center as well as the new stadium, allowing visitors to stay in Eagan helps promote this resulting in an increased financial gain Benefits to the City of Eagan (cont.) Economic Benefit to Local Businesses Increase in Revenue from Daytime spending 90% or more of our guests are families that come together and find a centrally located place to have family reunions. When they are in our city, they spend money in our city. Offers affordable accommodations for military family, job interviewing, travelling nurses Provides opportunity to earn income to make homeownership more affordable. Residential properties are better and maintained and controlled when they provide short-term rentals Goal Work in partnership to achieve safe and livable neighborhoods Create and sustain a resilient and economically prosperous city Bring forward a framework for a comprehensive ordinance to allow for and regulate short-term rentals Recognizes vacation rentals as an important source of visitor accommodations while understanding legitimate community concerns associated with the use Added Protection from Airbnb/VRBO/HomeAway Rental Protection – $1 Million in liability insurance Security – Company maintains all guest bookings as well as deposits and provides all Customer Service Online Reviews - When debating whether or not someone that rents out their home is providing reputable service, all guests have the ability to provide a review of their stay as well as communication and cleanliness. This alone would weed out those that are inexperienced or simply bad renters/hosts. Proposal Allowance of Short-Term Rentals by establishing regulations Possibly including a limit on the number of dwelling an individual operates The ability to implement a more limiting local ordinance leads to greater compliance Require Short-Term Rental Registration/License This will week out those that are not serious about it Establish a process for the enforcement of such licensing requirements Request certain reporting be filed Proposed Approach More consistently regulate short-term rentals Help protect the rights and safety of owners, guests, and neighbors Protect the livability of residential neighborhoods Implement rental policies such as: Providing guest safety provisions Emergency contact information Neighborhood parking restrictions, etc. Promoting the City of Eagan Posting of license # Closing Given that the Short-Term Rental is already all around us, I believe it’s imperative that we work to support and manage it and not just say no I vote to bring forward a framework for a comprehensive ordinance to allow for and regulate short-term rentals Please don’t hurt those wanting to be in compliance, be fair and regulate it I believe that allowing Short-Term Rentals will ultimately lead to a good balance of respecting neighborhoods and allowing hosts to share their home in a way that benefits both them and Eagan and the visitors to our city FYI…Minneapolis adopted Short-Term Rentals and started accepting licenses Dec 1, 2017 and charges $70/year for licensing  Thank You! John and Murphy McCann 1601 McCarthy Road MurphyM2@me.com 651-338-3998 Mike McGuire, Mayor Gary Hansen, Councilperson Cyndee Fields, Councilperson Paul Bakken, Councilperson Meg Tilley, Councilperson Dear Mayor and Council: I had hoped that the daily rental of single family and multifamily residences in the City of Eagan had been decided to not be allowed in 2015. Allowing individuals to rent their homes, condominiums to persons via companies such as Airbnb, VRBO and HomeAway is an extremely poor business concept often both for those renting this home/unit to strangers. The pair of residents who were operating an Airbnb within the city who didn't know it wasn't allowed who said "it's prevented them from going into foreclosure and helped introduce outsiders to Eagan." Perhaps what they meant to say is that without the income from the Airbnb rents they would have their property foreclosed upon. Eagan has approximately 59 -licensed lodging places that can be rented daily, weekly, or monthly and give people the time to learn about the many features, advantages and benefits of Eagan —legally and safely. The Eagan Convention and Visitors Bureau, Burnsville and Savage does not allow rental units for less than 15 -days. The real crux of the matter is that Eagan has been a very well managed City in the 29 -years I've lived here. Eagan has established city ordinances that regulate hotels, motels and other licensed lodging establishments assuring renters that the lodging meets standards for fire control, ingress and egress, wheelchair access, and a clean sleeping accommodations. Because the lodging facilities are licensed they have commercial insurance coverages for the building, grounds and for their guests. If food is served the lodging facility has been checked by the health department so that to the extent possible that food and drinks available to the guests are safe and eatable. Renting a private residence via Airbnb, VRBO, or HomeAway avoids all of these safeguards. A homeowner's insurance policy does not cover a renter nor does it provide protection to the homeowner who rents their property. Why because their insurance policy specifically details no coverage for rentals (of any period of time). Why because insurance companies are well aware of the extra inherent risks when renting! Thus both the private residence owner has increased risk that may or may not be covered under the contact with Airbnb, VRBO, and HomeAway or similar. Several tout that they have billion dollar policies that cover damages to the private residence owners who have their property damaged. However trying to get these companies to pay can be a long difficult exercise in futility. But the "fun" doesn't stop with the private residence owner. Because if the renters damage the rented residence say perhaps a fire and that fire damages nearby homes, condominiums or apartments guess who is responsible? The private residence owner. When we're detailing "fun" how about if one of the renters damages a neighbor's vehicle when coming to or from the private residence? Now who pays? Perhaps Airbnb, VRBO or HomeAway... not if they can find wiggle words in their contact with the private residence owner to avoid that issue. Renting without meeting the appropriate safety codes/ordnances means that while placing greater personal and guest risks it also means that the City, County, and State are deprived of the tax revenues to support their valuable services! There are numerous "horror" stories from private residence owners who have rented their property to persons unknown and discovered that their residence was not used as they believed it would be: Examples include large parties that resulted in significant damages to the property. The illegal sale and use of drugs by many persons who attended "parties" at the residence. Prostitutes are using Airbnb for'pop-up brothels' was reported in the NY Post by Dana Sauchelli and Bruce Golding on 14 April 2014. Is this what the residences of Eagan want? Allowing short-term rentals may create income for few by exposes the entire City to the many down sides of effectively unlicensed rentals of private residences! REASONS TO NOT ALLOW SHORT-TERM RENTALS OF PRIVATE RESIDENTAL PROPERTY 1 r' Defeats the State and City zoning codes designed to protect homeowner's from commercialization of properties zoned residential. 2. r< Property owners insurance does not cover commercial uses. Companies such as Airbnb, VRBO and HomeAway's insurance typically only covers damages that exceed the property owners insurance... which is none! 3. r; Neighbors properties (residence, vehicles, and persons) are at increased risk and may only have the assets of the property owners who rented their property to recover their losses! 4. C'_ Potentially loud music, talking at late hours can disturb the residential neighbors. 5. r'; Eagan has approximately 59 -commercially zoned and built to provide short-term lodging that meets the State and Eagan building codes for safety. Approval to allow short-term rentals by property owners whose dwelling does not have to meet the same safety standards and insurance requirements puts those properties at an unfair advantage. 6. e� State and municipal taxes are unlikely to be collected. Lost revenues! 7. 6�: Often major sporting events and national musical entertainers are attended by a minority of individuals whose away -from -home behavior borders on outrageous or is outrageous by most communities' standards. It would only take a couple of articles about outrageous behavior or damages to property being rented to "sour" state, region and national reputation. 8. e", To be effective I believe that the City of Eagan would need to include a fine with each and every violation — absent a monetary fine of perhaps $1,000 for the first offense then doubling that amount with any subsequent offense by the individual(s). Thus allowing a few individuals to potentially make a few dollars by renting out their residential property Eagan is risking its safety of many and potentially damaging its reputation. With the Viking Stadium being built in Eagan this is an excellent opportunity for the State and Country to see Eagan — this world class opportunity should not be squandered with nominal benefits to a few and potentially huge problems for many! I've attached copies of articles that were found on the Internet that supports my position. I'm a resident of Eagan for over 28 -years. I'm very pleased with the managed growth of the City during that time! I've not included my name nor my address as I'm concerned about negative personal repercussions. Since ly, LINK: http://vwvw.airbnbhell.com/ Why you should NOT use Airbnb Stay with Roor orama. Feel at home. AirbnbHell.com is dedicated to helping hosts and guests spread the word about the risks and dangers of using the Airbnb service. Here is a list of reasons why you should NOT use Airbnb as a Guest, nor as a Host. At the very least, beware of these serious issues with Airbnb services and consider other options. If you are a potential Guest: 1. If any of your personal items or cash are stolen (by the host, other guests, or burglars) you are 100% out of luck and have no protection. 2. If there is a foul odor, loud noises, or any other problems with your room that are not easily documented with photos, you are out of luck and your claim for a refund will be denied. 3. There is no guarantee how many people might be living in a given home/condo while you are there. If there is a shared bathroom you might end up sharing it with 1 person, or 20. 4. A "fully stocked kitchen" means very different things to different people. One pot, 2 dishes and a handful of silverware does not mean you can actually cook a meal there, yet this is not enough evidence to seek a claim for refund 5. If you buy groceries and another guest or the host uses them or throws them away, you're out of luck. 6. If the host or another guest has a party every night, you will have to thoroughly document each incident with video recordings and time stamps to seek any sort of claim or refund. 7. Airbnb charges you about 15% on top of what the host actually receives for your reservation. That means you COULD get your reservation about 15% LESS if you booked directly with the host. If you are a potential Host: 1. If your guests claim any sort of insect/pest/vermin problem, airbnb will instantly return 50% of your guests money, even if it's a year long reservation and the claim is false. 2. If your guests steal your cash, airbnb will do nothing. 3. If you make any claim regarding damage to reclaim part or all of the security deposit, airbnb will make your life a living hell by demanding receipts for your original purchase even if it's furniture that you've owned for 20 years. If you don't have receipts, you're out of luck, and even if you do, it will take weeks or months to even get any resolution. 4. Airbnb takes 3% of every reservation from you, but they also take about 15% from the guest! That means your guests are WILLING to pay 18% more than you're actually receiving but you're not getting any of that extra money. 5. The "1 million dollar host guarantee" is total BS and virtually impossible to actually claim. Don't fall for this marketing ploy! The Super Bowl and short-term rentals: Should I stay or should I go? Considerations for renting out a residence during major events by Joshua A. Bobich, Esq., Moss & Barnett October 2016 Brace yourself -- the Twin Cities is slated to serve as the center of the sporting universe multiple times in the next few years. The Super Bowl takes over Minneapolis (and, undoubtedly, the immediate 20 -plus -mile radius) at the brand -spanking -new U.S. Bank Stadium (affectionately dubbed "The People's Stadium") in February 2018. That's the granddaddy event of them all, but not the only major scheduled event to descend upon the Twin Cities. The X Games, the top event of those in extreme sports, will call Minneapolis home in 2017 and 2018. The NCAA Men's Basketball Final Four comes to Minneapolis in 2019. And, recently, Chaska hosted the wildly popular Ryder Cup. This doesn't even include other mainstays, like the St. Paul -hosted Red Bull Crashed Ice and the myriad other events hosted throughout the metro area. With these spectacles come the requisite influx of visitors, all of whom will be clamoring for a place to call home for a few days, a week or, possibly, a month. What does this mean to you? These events present the unique, and potentially lucrative, opportunity for Twin Cities residents to rent all or part of their home, condo, apartment and maybe even that backyard shed for a nice little windfall of cash. Early listings show one -bedroom condos in Minneapolis asking for as much as $4,000 per night during the Super Bowl. Who needs to watch the shivering masses scurry through the skyways when you can experience the Big Game with your toes in the sand, sipping something served in a coconut, all the while knowing it's all paid for by your two-week rental? Of course, 1r11all seemingly too -good -to -be -true scenarios, there are always the unattractive realities. Before your clients (or you) decide to rent space through Craigslist or Airbnb, consider the following. 1. The Tax Man cometh -- eventually Private owners can rent their homes condos townhouses etc for as many as 14 days in any calendar year, and any payments received during that period are not included in the owner's taxable income for the year, no matter how much is earned. However, the owner must also use the property for their own personal use at least 14 days of that same year. One of the tradeoffs of using this exception is that the owner cannot deduct expenses or take depreciation deductions related to the rental because the property is treated as a personal residence and not a rental property. On the bright side, the owner does not need to file a Schedule E because no landlord expenses or income are incurred from such a rental. Rent payments generated from rentals of private residences for 15 or more days in a calendar year must be reported as taxable income by the owner. However, unlike with rentals of 14 or fewer days, the owner is able to take deductions for "direct rental expenses" and applicable depreciation, but only up to the taxable income generated from the rental of the property. If the owner does have expenses directly related to renting the property that exceed the amount of the rental income in a particular year, the owner can carry those deductions forward to future years and apply them to the extent future rental income is generated (again, so long as the private residence is rented for 15 or more days in such future year(s)). In addition to potential income taxes, all short-term rentals of fewer than 30 days in Minnesota are subject to state sales tax (currently 6.875 percent). If the property is located in Minneapolis, there are additional taxes that also apply, including a 3 -percent entertainment tax, 0.15 -percent Hennepin County sales tax, 0.25 -percent Transit Improvement tax and the 0.5 - percent Minneapolis sales tax. That means 10.775 percent less of a vacation from the rental income windfall. 2. Rules, rules and more rules There are a host of local laws and ordinances that will almost certainly apply to even the most simplistic short-term rental. Metro municipalities may have rules and requirements in place with regard to the renting of property, including zoning restrictions, building and housing standards, and the need to apply for and obtain various licenses. Using Minneapolis as an example, at a minimum, a short-term rental of a residential space requires the owner to obtain a "bed and breakfast facility" license, which involves compliance with various zoning, health, housing and other codes. Of course, not every (any?) person listing a room for rent on Airbnb has obtained the necessary licenses for the short-term rental of their property. Failing to do so however could subiect the owner to substantial fines or other legal action due to noncompliance Short-term rentals are a newer trend and applicable laws are constantly changing so it is extremely important to continue to monitor them on a regular basis Even more restricting and impactful than local law might be restrictions that are in place if the property is part of a condo or townhome association or cooperative. It has become increasingly common for these groups to include significant restrictions and, in many cases, outright prohibitions on the rental of property in their rules, bylaws and/or association agreements. If an owner violates these restrictions, the association could seek legal action to stop the rental activity or impose a fine or penalty. For example, one loft complex in the North Loop neighborhood of iVl?i,neap411ts lia: idreudy (aiidpai IiCly j �i"anted its owners t1l' 1 1,101 b,Nl l lie stibi ct to a fine cif up to $5.000 if they choose to rent otit their property during the Super Bowl. 3. About that broken stair... Renting out a residence raises the possibilit\ th=u a guest could injure him or herself duriiiL, the stay. Wan accident Was to occur and it vV, 1a, (gond tltat the ow«er's iegligence in the upkeep and ilia irte!tance Orflie rented Space \yas the ca"ise. ail ofthat rental income couid very quickly end LIP ill tl;e hands of a detense attorney. No matter the owconie. litigation is expensive and could cost the owner pouch more than just the rent. Short-term renter's insurance can be obtained through any number of insurance brokers and carriers, but appropriate coverage might also be available as a rider or endorsement on the owner's existing homeowner's policy. Certain policies also include provisions that allow for one- off rentals or rentals of certain limited duration. However, before relying on an existing policy, the policy document should be reviewed in detail and, if possible, confirmation in writing of the available coverage should be obtained from the insurer. The insurer might have a much different interpretation of the limits and exemptions on its policy. Short-term and vacation rental listing services such as Airbnb, HomeAway and VRBO may also have protection available to those who list on their website. Airbnb appears to be the industry leader in this category through its Host Protection Insurance Program, which provides up to $1 million of primary liability coverage per occurrence, and a cap of $1 million for each listing location (subject to certain conditions, limitations, restrictions, etc., of course). Proceed with caution There will undoubtedly be multiple opportunities for homeowners to cash in when the bright lights are shining on the Twin Cities. But, before advertising a home and hightailing it to the Caribbean, be sure to consider whether it might make more sense to stick around and experience the spectacle firsthand. Josh Bobich is an attorney with the Minneapolis law firm of Moss & Barnett, practicing in the firm's business law, mergers, acquisitions and corporate finance, and technology practice areas. He is dedicated to achieving business -efficient legal solutions for privately held and family- owned entities. You may reach him at Joshua. bobich@lawmoss. com or 612-877-5288. N:V l"1{1N x.1:. 03 It l t1F O1:.` ' Airbnb Is Crashing the Neighborhood Short-term rental websites raise risks for home owners, their neighbors, and communities. December 2015 ! By Barbara Nichols There's a good reason every city has zoning laws. They separate var:ous types of buildings and building uses for the mutual benefit of everyone, so people don't have to live next to a factory or, a motel. Most cities also have laws related to the minimum rental period for a single-family house or a multifamily dwelling. In Los Angeles, for example, a residential rental of less than 30 days -- called a "short-term rental" — is currently prohibited. Internet companies such as Airbnb and VRBO pay no mind to such ordinances. They've swamped the market in California and elsewhere with thousands of STR listings, making the rules difficult or impossible to enforce. These rental sites appeal to home owners who need additional income. Then the companies use those owners as examples to coax cities into making STRs legal. Even though there's clear demand on the part of home owners. that doesn't justify the many problems STRs cause for the larger community. Usually, there's no problem with people renting a room in their home, as long as the lease is longer than 30 days and the home owner is present to monitor the renter's activities. The owner has an opportunity to check the potential renter's credit, employment, and references. However, STR websites are calling this type of pre-existing rental the "shared economy" to sell their quite different concept to cities. These websites claim that home owners should have the right to do whatever they want with their property — but that's a fallacy. When someone has purchased in a single-family or multifamily zone, they have accepted the rules of that zoning. They do not have the right to turn their home into a motel (transient zoning), a restaurant, or a factory to the detriment of everyone else in that zone. More to Come STRs are having a dangerous effect on our housing stock. In L.A., a city desperate for more affordable housing, 11 units of long-term rental housing are being lost daily to STR conversions, according to a report from the Los Angeles Alliance for a New Economy. The report says people are converting rent -controlled units into commercial STR operations, and long-term rent -control tenants are being evicted. The loss of these units in the long-term rental market has driven up total housing costs for L.A. renters by more than $464 million in the last year. (Read more in this Los Angeles Times article, "Rental sites like Airbnb aren't as innocuous as they pretend ") The trend for STRs is away from "shared spaces," where owners are present. Individuals are now purchasing single-family or multifamily units to turn them into STRs creating a business to the considerable detriment of their neighbors. Some short-term renters turn these locations into party houses, creating noise, traffic, and a public nuisance. In such instances, neighbors who need a night's sleep to work the next day or who have school-age children are disturbed. In my neighborhood, a home owner leased her property for a year to someone she believed was occupying it, only to learn he listed it on one of the STR sites as a "commercial party- house." Some 500 people being charged $125 apiece crammed narrow, winding canyon roads by illegally parking and throwing trash everywhere. When the property owner was alerted, she was shocked and started eviction proceedings. STRs pose big risks for the home overs who are leasing their properties: Home insurance typicaily covers only owner -occupied or long-term rental homes. Damage to an STR likely isn't covered. Airbnb seems to have addressed this problem with its "host guarantee" that offers up to $1 million for property damage caused by short-term renters, but owners should read the fine print: Airbnb itself says its policy "should not be considered as a replacement or stand-in for homeowners or renters insurance." Most notably, it doesn't cover liability at all. The fine print also suggests that property owners try to settle with the guest first. If no settlement can be reached, they have to document the damage and submit to a possible inspection. Airbnb won't cover "reasonable wear and tear" — whatever that means and limits compensation for high-value items such as jewelry and artwork. So, real I y. how much can a host expect to be protected? The negative impact of STRs goes far beyond the immediate neighborhoods they're in. Every region has environmental challenges, and short-term renters who are unfamiliar or unconcerned — with those challenges could pose a big threat. California is in the midst of a severe drought. Imagine if a short-term renter who knew nothing of the threat — or didn't care threw a cigarette butt over a balcony onto dry brush? Worst of all, the growth of short-term rentals has pitted neighbor against neighbor, with neighborhood organizations joining forces to fight STRs. Some cities are calling for stricter STR regulations or outright bans, but who will pay for enforcement of these rules? In fairness, STR websites and their customers should pay the bill. Local taxpayers would prefer to see their tax revenue used for better schools, roads, and public transit. Those who support STRs speak of the financial help it has provided and the interesting visitors they have met. STR hosts say they provide loxver-cost acco►mnodations than conventional motels and hotels. Well, hotels and motels pay taxes and employ millions of people. They are required to meet public -safety laws, including fire exits, sprinklers, and habitability. Unregulated STRs are not currently subject to these provisions, and many "hosts" would like to keep it that way. The real estate industry is caught in the middle of a fight between those who oppose STRs and the property owners and companies promoting them. But practitioners selling real estate should keep this in mind: A single-family home or condo unit next door to a short-term rental — where the occupants change every few days will take longer to sell and bring in lower offers. You never know who your neighbors could be, and that's a classic situation of property stigma. In the future, real estate agents could be required to disclose to a seller or long-term renter the existence of a nearby STR. The California Association of REALTORS® may soon ask its Forms Committee to add a question to the Seller's Property Questionnaire: "Is your home across from or next door to a short-term rental?" If agents fail to disclose nearby STRs they know about, they could open themselves up to a lawsuit by unhappy clients who end up living next door to one. The real estate industry needs to take a stand to protect residential zoning laws against STRs. Without this protection, property values will decline and cause neighborhood stress and disruption. Real estate agents will have another obstacle to overcome in marketing properties and could expose themselves to liability. Saving our communities and protecting our property values is the mission of our industry. I have worked hard as a real estate broker to pay for my home of 29 years. I did not buy in a transient motel zone and do not believe that the profit motives of these short-term rental companies and a few property owners should be allowed to negatively impact my home's value, peace and quiet. and safety. Related Content: . z Barbara Nichols Barbara Nichols of Nichols Real Estate & General Contracting is a broker, contractor, expert witness, and author of "The No Lawsuit Guide to Real Estate Transactions." She can be reached at 310-273-6369 or at www.barbaranichols.net. 10 incredible Airbnb horror stories Published May 08, 2014 FOX NEWS http://www.foxnews.com/travel/2014/05/08/10-incredible-airbnb-horror-stories. htmi To some, Airbnb.com is one of the greatest things to happen to the travel industry in recent times. It's the prime example of how the new "sharing economy" is going to change everything. People offer apartment, house or even couch stays on the site for rent. It's so much more interesting than hotels, it is the best way to experience a destination, a fantastic way to meet new people. It definitely can be all of those things, sure, but some users of the site brush up against the harsh reality that in many ways, Airbnb is far from perfect. Let's start with the elephant in the room: In many cities, Airbnb is flat out illegal. You can actually be evicted during your stay — it's happened — and your host could find themselves on the street, right along with you (this has also happened). Then there's the too -infrequently reported fact that Airbnb routinely collects up to 12 percent in fees from users on every single booking, which can amount to the cost of a hotel night in many cities. (Hosts pay a kinder, gentler three percent, by the way. Why? Because the last thing Airbnb wants to do is discourage hosts from signing up. Too bad users aren't as valued.) Then there's the business of the site setup itself — I've personally spent far too much time searching for places to stay, only to find that the owner won't respond to emails, or that they aren't even renting the property anymore and "forgot to take down the listing." I also know of users who have booked — and paid for — apartments listed as completely private, only to find them anything but. I've heard of hosts informing guests halfway through their stay that they're moving the guest across town, with no compensation for the hassle. As is to be expected when you book into a stranger's home (or, when you rent your home out to strangers), things can get plain weird. Stories of such weirdness are everywhere —here are just ten cautionary tales. Photos are stock not actual. 1. The orgy New York comedian Ari Teman rented out his modest garden apartment in the Chelsea neighborhood of Manhattan earlier this year for what turned out to be a full-blown orgy, titled "Turn Up Part 2: The Pantie Raid." Teman was reportedly evicted almost immediately by building management. 2. The meth addicts Troy Dayton rented out his home in Oakland, Calif. to a young woman who turned out to be a meth addict and who trashed his home and stole his birth certificate. A request to Airbnb to have his birth certificate replaced and the damages covered was ignored; he was eventually begrudgingly given some site credit. 3. The crime scene e0UCE UNE DO NOT CiV" Publicist Jessica Penzari rented her Midtown Manhattan apartment this past month to a woman who told her she was military, looking for a little R&R; Penzari was alarmed to receive a call from the cops to alert her that a woman (who turned out to be a prostitute) had been slashed by a man (who turned out to be a john) in a dispute over the cost of services. Airbnb put her up in a hotel and sent a professional cleaning service. 4. The sudden eviction Matt Lynley moved to New York ready to take over the world — but first, he'd come face to face with some of Airbnb's greatest weaknesses. He reportedly wound up having his reservation cancelled when an owner wouldn't verify a booking (that's part of Airbnb's system), and as a result had most of his cash tied up in the pending room charge. Lynley ended up finding another place, but was out the money until Airbnd refunded it. • 5. The fraudulent rental LA` A California man was enjoying his rental in Berlin when a knock came at the door from a man who professed to be the real owner of the unit, wondering what was going on in the apartment. "This guy with a thick Russian accent knocks on my door, demanding what I'm doing in his house. For a moment I thought I was in a bad 80s movie," he said at the time. 6. The watershed moment _ - r Back in 2011, a San Francisco woman came home after a week away to find her apartment ransacked and trashed; a very public battle with Airbnb ensued; executives eventually apologized on the record — the incident lead to the creation of the site's current host protection policy. 7. The soiled penthouse "M1 Recently, Rachel Bassini rented out her Manhattan penthouse to an unassuming guy named "Jeffery," who had a profile picture of him looking perfectly normal, with a wife and young child. Jeffery turned out to be the host of a party that left her gorgeous apartment in ruins, covered in condom wrappers and bodily fluids and, er, excretions. 8. The pop-up brothel Two Stockholm women handed over the keys to their apartment only to find eventually that their flat was being used as a brothel. How'd they find out? The police alerted them that their home had just been raided — two working girls had been caught in the act. 9. The competitive landlord Chris Dannen quickly racked up nearly $20,000 in bookings on his Brooklyn apartment, so he was curious when everything suddenly went quiet. One culprit: His landlord had decided to go for a piece of the action, renting out rooms in a nearby building. Dannen was soon served with a restraining order, requiring him to stop renting and to evict current tenants. He was later evicted as well. 10. The bait and switch --4 � n _TMFMr_ - W., __ A California woman was excited to find a reasonably -priced rental in Austin, Texas during an event weekend, making the 50 percent down payment and counting her good luck. Out of nowhere, the host emailed to say that they'd forgotten it was a busy weekend and that the rate was actually three times what she'd agreed to pay, leaving her in the unpleasant situation of negotiating her way out of the booking and struggling to find alternate accommodation on one of the busiest weekends of the year. Of course, hotels aren't always perfect either. They can overbook and "walk" you, although they at least they pay for the night at the alternate hotel they provide. I did try booking on Airbnb a few times, but each and every time I was either rejected by the landlord or canceled at the last minute. I'd rather stay in a nice Hilton Garden Inn, any day. Airbnb Is Said to Seek $1 Billion More in Financing By: Mike Isaac 2 Hours Ago, The New York Times, June 18, 2015 Source: Airbnb Silicon Valley's elite start-ups have been on a fund-raising tear, and Airbnb has become the latest to try to add to its cash pile. Airbnb, which lets users list their homes and apartments for short-term rentals, is in talks to raise $1 billion in venture capital, according to a person close to the discussions. The financing round would value Airbnb at $24 billion, said the person, who spoke on condition of anonymity. If the financing closes, Airbnb will more than double its valuation of $10 billion from just over a year ago. The company has garnered nearly $800 million in funding to date from investors including Sequoia Capital and Andreessen Horowitz. The future of Airbnb Brian Chesky, Airbnb CEO, discusses the advantages and disadvantages to being a public company and what makes Airbnb unique. A spokeswoman for Airbnb declined to comment. Airbnb's funding talks, which were earlier reported by The Wall Street Journal, are another example of the fast growth and interest in so-called on -demand start-ups, many of which are seeking hundreds of millions of dollars and ever -climbing valuations in their quests to upend existing industries. Airbnb is using its riches to take on hospitality giants like Marriott and Hilton Worldwide. Companies like Uber and Lyft, which have created ride -hailing smartphone applications, are fighting long -entrenched incumbents in the taxi and limousine industry. Uber has raised several billion dollars in just the last year and has been in talks to raise about $1.5 billion at a $50 billion valuation. Airbnb is projecting approximately $900 million in revenue over 2015, according to the person close to the company. Read More Airbnb horror story leaves Calgary home a wreck LINK to Website Below Airbnb has faced regulatory and insurance hurdles on a state -by -state basis, while simultaneously battling hotel companies that see the young company as a growing threat. Last year, the office of Eric T. Schneiderman, New York's attorney general, released a report saying that nearly three-quarters of Airbnb rentals in the state were illegal and violated zoning or other laws. Airbnb, which was established in 2008, now has hosts offering their homes for rent in more than 34,000 cities and 190 countries around the world, according to the company. It says more than 25 million people have signed up to use its service. Airbnb nightmare renters leave Calgary home trashed LINK: http://www.cbc.ca/news/canada/calgary/airbnb-nightmare-renters-leave-calgary-home- trashed-1.3053555 Family finds condoms plugging toilets and chicken drumsticks in shoes CBC News Posted: Apr 29, 2015 9:33 AM MT Last Updated: Apr 30, 2015 6:32 PM MT Related Stories • Airbnb to be targeted in Quebec bill • Banff cracking down unlicensed vacation properties A Calgary family says their home has been destroyed by guests who rented it on the popular accommodation website Airbnb. "Our hardwood floors are all popping because there are pools of liquor. There's glass shards, there's dent in our walls, toilets flooded and plugged with condoms," said homeowner Star King. King says she agreed to rent her house in northwest Calgary to four adults, who said they were in town for a wedding. She and her husband, Mark, turned their keys over to the renters on Saturday night and went to stay with their in-laws in another part of the city. King says shortly after, she started receiving texts from neighbours, telling her the police had arrived. She was told that a "huge luxury party bus pulled up" and 100 people piled into her home. The King family had to plead with the renters to pack up and leave, who she said were "just totally wasted." "They just put their cigarettes out wherever they felt like it," said Star King. (Mark King) "They threw paint all over my works that I was going to sell for probably a couple thousand. Just totally disrespectful behaviour," said King, who is an artist. 'We came and wished the home was burnt down to ashes. It would have felt way better.'- Star King, Airbnb host She overheard Calgary police at the scene describe the situation as a "drug-induced orgy." Airbnb spokesman Jakob Kerr says the company has banned this guest from renting again through the website. Mike and Star King survey the damage in their home, which was vandalized over the weekend. (CBC) "We have zero tolerance for this kind of behaviour and our team is working quickly to make this right," Kerr wrote in an email statement. "Over 35 million guests have stayed on Airbnb, and property damage is extremely rare." Quebec is already looking into beefing up rules surrounding rentals to tourists without a permit. Next month, the province plans to table a bill to regulate online home -sharing services, such as Airbnb. • Airbnb to be targeted in Quebec bill • Unregistered B&Bs given pass in N.S. amid clampdown The King family says they had no issues when they rented out their house two weeks before through Airbnb and have also used the service, many times, themselves. "We came and wished the home was burnt down to ashes. It would have felt way better," said King. 7'W The Kings found their couch cushions thrown on the floor in their kitchen, covered in mayonnaise. (Mike Symington/CBC) Airbnb has told CBC News that the King family will be reimbursed through its Host Guarantee insurance, which provides up to $1 million "to eligible properties in the rare event of guest damages which are not resolved directly with the guest." The company also says it's offering full assistance to law enforcement in the investigation of the incident. Calgary police are investigating and estimate the damage is more than $50,000. "In the 27 years of policing that I've done, I've never seen a home so badly damaged from a weekend party, and of course, with this kind of rental situation," said Staff Sgt. Jim Leung. Leung says police are trying to locate the man who originally rented the property and intend to charge him with mischief over $5,000 for causing damage to the property. A,Liability Risk for Airbnb Hosts - The New York Times YOUR MONEY https:i'/www.nytimes. com/2014/12/06iyour-money.'airbnb-offers-hom eo... https://nyti.ms/I 2JQyQQ A Liability Risk for Airbnb Hosts Your Money By RON LIEBER DEC. 5, 2014 Over the last few years, Liber and Airbnb have come to be known as leaders of something called the sharing economy. Give their founders credit for this feat of mostly misplaced nomenclature. The companies help people sell rides in cars and rent stays in homes; they deserve no more credit for promoting a skill learned in preschool than Marriott or taxi companies. But here's one thing they do love to share: risk. Uber grew by heaping it on many drivers, asking them to push damage claims through their personal insurance companies while knowing that those companies did not cover commercial activity. And now comes Airbnb with its free $i million liability coverage that will cover the hosts for its tens of thousands of United States listings. How can it afford to provide this for nothing, to everybody? Well, it is "secondary" coverage, which means that it, too, wants hosts to push any claims for guests' injuries and deaths through hosts' own insurance companies first. So how might that work in practice, or would it at all? This week, I sent 17 of 5 7/21/17, 2:52 P vI A Liability Risk for Airbnb Hosts - The New York Times https : i,,'www. nytim e s. c om /2014!12/06/your-m oney, al'rbnb-offers-horneo... questions about Airbnb's move and short-term rentals in general to the biggest home insurance companies in the United States as ranked by SNL Financial. One thing came through loud and clear from the handful of companies that did not dodge my inquiries entirely: Most homeowner's and renter's insurance policies do not cover regular commercial activity in the home. "If you're conducting a business, on a full- or part-time basis, by renting out your home or apartment (or a room in your home or apartment) as a way to earn money, your homeowner's or renter's insurance policy probably would not provide liability coverage," said Rebecca Hirsch, a USAA spokeswoman, in an email. Here's what Oregon's insurance commissioner had to say to Airbnb hosts in a September consumer advisory statement: "Homeowner policies generally do not provide coverage for business use." Insurance companies are not fond of liars either, nor of people who conveniently neglect to tell them that they are running a small-scale hotel. "An insured has the obligation to be forthcoming about all facts relating to his/her insured property. Not doing so could impact coverage and jeopardize the continuation of insurance," said Laura Strykowski, an Allstate spokeswoman. So why would Airbnb offer secondary liability coverage at all if it knows that most hosts' primary insurers frown on their getting into the hosteling business? Three reasons. First, it had to do something, and fast; there's a new ordinance in San Francisco requiring hosts to have at least $500,000 in liability coverage. Hosts probably would not have gotten their acts together without the company's help. Second, it knows that some insurance companies have exceptions of various sorts. Allstate allows people to rent out their home for a week or two while still maintaining liability coverage for people who stay there. Ms. Hirsch of USAA said that for people who "very occasionally rent a room out (as opposed to doing this as a business), liability coverage maybe available." Chubb offers coverage as long as you're not taking in more than $15,00o a year in rental income, which it believes is The Times Sale. 50% off for one year. Subscriber login >, of 5 7/21/17, 2:52 Plvl A- Liability Risk for Airbnb Hosts - The New York Times https:i/'www.nytimes.com/2014/12106iyour-money/airbnb-offers-hom eo... involved and exploit loopholes. Hey, it could all work out well for Airbnb, at least some of the time, right? Clearly, the company thinks it's worth trying. The third reason is more basic: It would cost Airbnb enormous amounts of money to offer primary coverage to every host. How much? Well, consider the efforts of its competitor, HomeAway. That company encourages its own hosts to purchase primary coverage for their rental properties, an offering that it refers to as HomeAway Assure. Scott Wolf, president of the program division for CBIZ Insurance Services, which provides the Assure policy, broke the host's cost down: For a $1 million, four- bedroom home with contents worth $100,000, the annual cost of coverage would be about $3,000, which includes any damage, liability coverage and replacement of rental income in case the home is temporarily uninhabitable. Most Airbnb properties are worth less than this, its hosts may rent only part of their homes and do so less often, and the company would get a bulk discount if it were to buy coverage for all of them. Still, multiply that times 800,000 listings and it's easy to see why it's out of the question for Airbnb to hand out primary coverage to everyone. So why doesn't the company do what HomeAway does and offer hosts the option to buy a ready-made primary insurance solution for their renting activities? "We wanted the experience for our hosts to be automatic and easy and offer real peace of mind," said Jonathan Golden, the Airbnb product leader who has been working on insurance issues for over three years, "versus going to another site and potentially having to purchase another policy." Free is indeed appealing to hosts who feel the pain every time Airbnb takes 6 to 12 percent of their revenue as a fee. "I'm pretty happy they're offering something, given the percentage they're taking," said Crystal Bradshaw, who has two listings in Paso Robles, Calif., on the site that she manages with her husband, Justin. (They once hosted me at a different listing in Burbank, Calif.) "At least as a host, I'm getting something back." "'Pl, ,v,.,1— :+ .Y,--- -++---+-- +— 1,,,.,+ C--- A; «1-,s-,1-. " Alf« R«.,,1n1+.,,., —AA -7 The Times Sale. 50% off for one year. OW Subscriber login 3 of 5 7/21/17, 2:5211N1 ALiability Risk for Airbnb Hosts - The New York Times https:r'/www.nytimes.comi2014,'l 2/06%your-money.lairbnb-offers-homeo... insurance? One reason it has taken so long for Airbnb to offer liability coverage is that insurance company actuaries aren't fond of underwriting anything until they have years of data on death, dismemberment, drownings, compound fractures, crushings and the like. Airbnb shared that data with its underwriters (who are making the company pay an unspecified deductible before any coverage kicks in), but the company would not share it with me. "Over 26 million guests have had a safe and positive experience on Airbnb, including over 16 million in 2014 alone," Jakob Kerr, an Airbnb spokesman, said in an emailed statement. "We respect our hosts' and guests' privacy and do not comment on questions like these." When I responded that disclosing the raw number of accidental deaths and injuries violates no one's privacy, he said he did not have anything to add. Mr. Wolf, the insurance executive, said that he budgeted for .$2 million in liability claims each year on the 7,000 rentals he insured through the Assure product. If each of those is occupied 18o nights each year, that means $1 million in claims for every 630,00o nights of occupancy each year. Guests can feel good about those odds. Busy hosts might be less comfortable. Airbnb, with its 800,000 listings at any given time, has more to worry about. Everyday consumers who neither host nor stay at Airbnb units may think this has nothing to do with them. Chubb, however, sees it differently. If Airbnb succeeds in sharing risk with personal insurance companies, then everyone's premiums have to rise to cover it. "If you don't underwrite appropriately, it drives up prices for the average homeowner," said. Christie Alderman, a vice president for Chubb Personal Insurance. Insurance companies could solve this by asking all policyholders about their hosting habits, but none of the 10 I contacted said that they had made any changes to their policies as home -renting has grown. They should ask. As for Airbnb's hosts, they have a few choices. 'They can simply tell their .+y n++nnn nn nrtrv+ran r+i nr. nsrn nt�+. r. tint 1 -gni r�+.n r�r.: r. n- t.•L.: nti. in <.*�.nt tti. r. irnr..+n s�r.n g The Times Sale. 50% off for one year., SAVE NOW _ Subscriber login of 5 721117, 2:52 RM .-VLiability Risk for Airbnb Hosts - The New York Times https:i/www.nytimes. corn/2014/12/06/your-money•'airbnb-offers-horneo... tiny fraction. Or they can buy a vacation home-rental/landlord policy from a company like CBIZ, which offers it on its website. Option 3 is to cross their fingers and hope that Airbnb's liability backstop will work as advertised. Those who are tempted by this should keep something in mind: The company that now wants hosts to trust it is also the one that built its business by providing a platform for those same hosts to violate all sorts of local ordinances on short-term lodging all over the world. Some of them got into trouble by doing so. When a serious injury or death occurs at a host's home and the host's homeowner's policy denies the claim because of the commercial activity the host was engaged in, will Airbnb be there when the lawsuits start flying? We're about to find out. And it will be a telling test of just how much the company has truly grown up. Twitter: ea ronlieber Elisa Cho contributed research. :111ake the most of your money. Every 111onday get articles about retirement, saving for college, investing, new online financial services and much more. Sign up far the Your /Money newsletter here. A version of this article appears in print on December 6, 2014, on Page B1 of the "Iew York edition with the headline: A Liability Risk for Airbnb Hosts. © 2017 The New York Times Company g The Times Sale. 50% off for one yearn SAVE NOW Subscriber login 5 of 5 7/21/17, 2:52 PM President, Board of Supervisors District 3 DAVID CHIU 邱信福邱信福邱信福邱信福 市參事會主席市參事會主席市參事會主席市參事會主席 City and County of San Francisco Short-Term Rental Regulation Summary Supervisor David Chiu introduced legislation to regulate short-term rentals. The legislation reinforces the prohibition against the conversion of residential housing into full-time de-facto hotels. It would only allow primary residents that live in their apartment to rent short-term on a limited basis to help supplement their housing costs. Secondary or vacation homes that do not have permanent residents occupying them would not be granted permission, so that the residential housing stock is protected in the midst of the current affordability crisis. CORE COMPONENTS OF LEGISLATION Primary Residency Resident must live in the unit as their primary residence for no less than three-quarters of the year. Registration Resident must apply for permission every two years by providing documentation to demonstrate that they meet primary residency, insurance, and tax requirements. Resident must maintain good standing by complying with all city laws, including rent control laws, or their permission would be revoked and the unit would be placed on a blacklist. Taxes Resident must pay transient occupancy taxes on short-term rental activity, and hosting platforms must collect and remit those taxes, or be subject to enforcement by the Treasurer’s Office. Insurance Resident must maintain liability insurance or be covered by hosting platform insurance policy. Private Contracts Resident must adhere to the terms of their private contracts. Application does not interfere with leases, homeowner association agreements, and covenants, conditions or restrictions on the property. Enforcement Residents that fail to register, violate the terms of their permission, or don’t maintain good standing are in violation. Hosting platforms that fail to notify their users of short-term rental laws and collect and remit taxes are in violation. Complaints alleging violations of the law would be investigated and deliberated through an administrative hearing. Violations are subject to administrative and civil penalties. AMENDMENTS TO THE LEGISLATION Following hearings at the Planning Commission and Land Use Committee and deliberation by the Board of Supervisors, Supervisor Chiu and his colleagues amended the legislation to strengthen enforcement, protect affordable housing, maintain quality of life in neighborhoods, and ensure building safety. Strengthening Enforcement Enforcement Agency - Consolidate enforcement function from two agencies into one with the Planning Department. Planning would administer registration, investigate violations, and report annually to the Board of Supervisors. (Planning Commission recommendation, Chiu amendment) Registration Number - Require Planning Department to issue registration number to accompany approvals, and require resident to include registration number with all short-term rental postings. (Planning Commission recommendation, Chiu amendment) Annual Self-Reporting - Require resident to report number of days of short-term activity annually to maintain good standing on registry. (Planning Commission recommendation, Chiu amendment) Multiple Violations - Raise administrative penalties for repeat violations, so that fines are doubled for second offenses and tripled for third and multiple offenses. Violations that are not corrected would have permission revoked. (Chiu amendment) Online Advertisements - Deem posting online advertisements without registering for permission as violation subject to administrative and civil penalties. (Planning Commission recommendation, Chiu amendment) Interested Party - Include homeowner association and property owner in definition of interested party allowed to file lawsuit after violation is rendered through an administrative hearing. (Kim, Farrell amendments) Funding - Require annual evaluation of application fee to assess administration and enforcement costs, and include Planning Commission hearing in evaluation. Direct all administrative and civil penalties back to Planning to fund enforcement. (Planning Commission recommendation, Chiu amendment) Protecting Affordable Housing Affordable Housing Exclusion - Exclude single room occupancy hotels, below market rate units, and any subsidized housing with restrictions on subletting and short-term renting from short-term renting. (Planning Commission recommendation; Chiu/Kim amendment) Single-Family Homes - Include single-family homes in regulation by requiring registration for permission and compliance with residency and all other good standing requirements. (Planning Commission recommendation, Chiu amendment) Principal Residence - Define principal residence as one residential unit that is associated with one permanent resident. Registration is allowed for only one permanent resident per unit. (Chiu amendment) Maintaining Quality of Life Code Compliance - Require compliance with Police, Health and Public Works Codes for approval and good standing. Permission is revoked if any outstanding noise, dumping, and other quality of life violations. (Planning Commission recommendation, Chiu amendment) Ensuring Building Safety Liability Insurance – Increase coverage requirement to $500,000 and require coverage to indemnify tenant and owner for bodily harm and property damage. (Planning Commission recommendation, Wiener/Farrell amendment) Property Owner Notification - Require Planning to notify property owner and homeowner association if tenant or homeowner has completed an application to rent short-term. (Wiener/Farrell amendments) Code Compliance - Resident must be in compliance with Building and Fire Codes to be granted permission and maintain good standing. Permission is revoked if any outstanding building, electrical, plumbing, mechanical, fire, health, housing, or planning code violations, including notices of violation, notices to cure, orders of abatement, cease and desist orders, or other correction notice. (Planning Commission recommendation, Chiu amendment) Fire Safety Posting - Resident must post fire safety information in their unit like location of fire extinguisher, alarm and exits. (Cohen amendment) Eagan Convention & Visitors Bureau Research Prepared for the 7/11/17 Eagan City Council Workshop Research Topic: Impact of Airbnb Industry on Tourism and Eagan’s Hospitality Community Overview: Since its inception back in 2008, the Airbnb phenomenon has grown exponentially from a few hundred rentals in a handful of cities into its current inventory of over 3 million lodging listings in approximately 65,000 cities worldwide. While the Airbnb industry has richly rewarded countless homeowners and provides convenient and incredibly affordable accommodations to millions of travelers, a host of issues ranging from health and safety concerns to crime, privacy and tax avoidance fears have also surfaced. As Eagan and municipalities across the nation look to regulate the Airbnb industry, we’ve explored the topic from a tourism point of view and have gathered some information which you’ll hopefully find useful as you revisit our local regulations. Airbnb Impact on Eagan’s Hospitality Community: Given that only a handful of Airbnb options have surfaced in and around the Eagan area during the past 9 years, the effect from an economic impact standpoint has been virtually nonexistent. From a tourism perspective, as you can imagine, we currently see it doing very little in terms of bringing additional tourists to our destination. Concerns Raised by Eagan Hotel Owners and General Managers: While our destination currently has little to offer on the Airbnb front, we feel it would be naive to ignore the fact that Airbnb options are fairly popular along the East and West Coasts of the country. Given this, we’ve spoken to a number of our Eagan hospitality community leaders about how they would feel if an abundance of Airbnb options would begin surfacing in our region. Here’s a summary of the main concerns that were shared with us:  Owners and general managers of our 16 Eagan hotels pride themselves on guest safety. The fact that the average Airbnb is currently not held to the same strict safety standards to which all of our Eagan hotels are held is a concern. In addition to state and local regulations, all of the brands representing our Eagan hotels also perform their own rigid inspections aimed at making certain guests enjoy a safe and comfortable experience while staying in Eagan. Should the Airbnb inventory begin growing exponentially in Eagan, this could potentially become a huge issue of fairness.  Another concern shared by our hospitality leaders centers around our overall Eagan brand. Our hoteliers are very proud of the high standards they’re all held to as exemplified by the myriad renovations and other exciting improvements that are always taking place in an effort to keep our des tination vibrant. Heaven forbid, if a serious injury or death would ever occur resulting from an Airbnb stay, our stakeholders would be very concerned about the negative PR Eagan ’s entire hospitality community would receive from a safety concern standpoint.  Hospitality leaders also feel Airbnb’s go far beyond the boundaries of simply “renting a room.” Should the concept truly catch on in our region, the feeling is that they should be considered more on par with bed and breakfasts and that lodging tax would need to be collected. National Trends: As cited above, Airbnb options in more populous regions such as the East and West Coasts continue to be prevalent. However, the Midwest continues to maintain far fewer options while also posing more regulatory hurdles for Airbnb hopefuls. Areas such as Chicago are making it more difficult for Airbnb owners to do business citing pushback from neighborhoods and hospitality leaders. While the majority of tourism experts seem to think that the Airbnb inventory will continue to grow, they also feel more regulations, inspections and tools used to combat privacy concerns will also be introduced. How Other Area Communities are Handling Airbnb Growth:  St. Paul: The Capital City recently proposed rules which would limit the number of people allowed to stay in a home and how many apartments or condominiums people could rent out in a building. Property owners would have to follow zoning and licensing rules, pay sales and lodging taxes, have appropriate insurance and, in some cases, a fire certificate of occupancy.  Burnsville: Burnsville’s ordinance effectively bans Airbnb: According to their ordinance, “rental of private homes for temporary occupancy threatens the essential character and stability of residential neighborhoods because short -term tenants have little interest in the welfare of the local community.” It also states that this type of rental “is often undertaken without adequate on -site management, compliance with state and local codes for commercial lodging establishments, and other safeguards for those renting the hom e.”  Lakeville: While Airbnb business is allowed in Lakeville, homeowners who rent single-family homes for short periods of time must abide by a set of regulations that include prohibiting more than two separate rentals within a 30 -day period.  Savage: The Savage City Council passed an ordinance barring anyone from renting their homes out for fewer than 15 days taking the possibility of an Airbnb off the table.  Apple Valley, Blaine, Stillwater and Woodbury all consider homes “single- family dwellings,” effectively forbidding an Airbnb from existing in these communities. Future Trends: According to airbnbcitizen.com, “a regulatory pattern is emerging from our conversations with policymakers—that they frequently divide home sharing into three categories: 1) shared spaces, 2) primary residences, and 3) vacation rentals and commercial accommodations. Generally speaking, governments are creating light -touch home sharing rules for shared spaces and primary residences, and more significant frameworks for vacation rentals and commercial accommodations. This pattern of light - touch regulation of shared spaces and primary residences reflects elected officials’ growing appreciation of how Airbnb creates economic opportunity for working families.” This statement certainly coincides with our research – the emerging patterns seem to be municipalities either taking a hardline stance against potential Airbnb operators or they’re exploring creative ways in which Airbnb’s can potentially and legally coexist with existing hotels and neighborhoods – there does not seem to be any middle ground whatsoever. Contact Information: Needless to say, the Airbnb industry is ever-evolving and poses a unique set of challenges to Eagan and countless other communities. We stand ready to assist in any way we can and would be happy to answer any additional questions you may have about this topic. Best of luck with your policymaking. Brent Cory, President/CEO Eagan Convention and Visitors Bureau Phone: 651-675-5544 (direct) Email brent@eaganmn.com To: Dave Osberg, City Administrator Jill Hutmacher, Community Development Director From: Mike Ridley, AICP City Planner Date: July 5, 2016 Subject: ULI – Airbnb Discussion Background Concern was raised in the fall of 2014 by neighbors of a property owner offering a basement apartment for short-term rental on the website Airbnb. City staff brought the issue of short-term residential rentals to the attention of the City Council at their December 16, 2014 Listening Session. The City Council discussed that the use described was similar to a Bed & Breakfast (B&B). At the Council’s request, staff polled a number of cities that allow B&B’s and found that the typical approach to allow such a use was via a Conditional Use Permit (CUP). History The City Code allows a person to rent their home or a room in their home for one or more months where the home would be deemed as the renter’s residence. Additionally, the Council had amended the City Code in 2014 to allow for Accessory Dwelling Units (ADU) in R-1 zoning districts. An ADU is intended to be a self-contained living unit with a dedicated access and off-street parking. At that time, the City Attorney opined: “Any home or rooms therein offered to the public for sleeping accommodations falls within this commercial lodging operation. It is irrelevant whether the operation is a “traditional B&B,” a single room or several rooms without any breakfast offered, or a “vacation home rental”—all three provide overnight lodging accommodations to the public for money and thus, all are commercial lodging operations.” Process Since the City Code did not accommodate short-term rentals in residential zones, the property owners referenced above applied for an Interim Use Permit (IUP) in March of 2015 to allow the use for a specific term. The Advisory Planning Commission recommended denial of the permit in April 2015. Before the City Council considered the IUP request, the applicant req uested the item be tabled until after the City Council considered short -term rentals, generally. The topic was discussed at the August 11, 2015 Special City Council Meeting where staff was seeking direction on next steps regarding short-term rentals in residential neighborhoods. After a significant amount of discussion the consensus of the City Council was to not move forward with an ordinance amendment to allow short-term rentals of rooms or portions of homes in residential neighborhoods. Conclusion The applicant withdrew the IUP application on August 21, 2015. At the suggestion of the City Attorney, the City Code was amended in December 2015 to clarify that residential occupancy means for a period not less than 30 days. Please contact me if you have questions or need additional information. 14985 Glazier Avenue Suite 525 Apple Valley, MN 55124 (952) 432-3136 Phone (952) 432-3780 Fax www.dmshb.com ( 9 5 2 ) 4 3 2 - 3 1 3 6 P h o n e ( 9 5 2 ) 4 3 2 - 3 7 8 0 F a x MEMORANDUM To: Mike Ridley, City Planner From: Sharon Hills, City Attorney Date: 4/2/2015 Re: B&Bs and Vacation Rental Home Regulations On March 4, 2015, Jon Hohenstein sent an email with several questions relating to the regulation of bed & breakfast or similar lodging operations within residential homes/condos. The following are Jon’s questions with my responses immediately following.  Do any of the conclusions change if the transient lodging is an Airbnb unit v. a more substantial, traditional Bed and Breakfast? That is, if it is essentially one room, bedroom or suite in a residence that is rented for less than 30 days at a time? If yes, how do they change? If no, then … ANSWER: The focus is the operation, not the amenities offered to the traveler, for purposes of the city’s regulations for zoning or lodging tax: Lodging offered in a single family home, whether it is a single room or the entire home, to a transient occupant (i.e. traveler) in exchange for money/consideration. Any property or any portion therein offered for short- term rental to transient occupants (travelers) falls within the same type of activity and needs to be treated similarly. Whether food is offered does not change the commercial lodging operation on the property for zoning purposes, albeit the offer of food to the guest, whether it is breakfast or dinner, will trigger state health code requirements.  A traditional hotel is subject to periodic fire inspections, health inspections and possibly other requirements; would those also be required of a B&B? ANSWER: Yes, a “bed and breakfast” establishment is subject to a state restaurant license and state “hotel/motel” license, subject to various health and safety requirements and inspections by the state. A vacation rental home or home with rooms for rent to travelers that provide food to the guest, even if the operation is not referred to or name as a “bed and breakfast” would fall within the Minnesota Dept. of Health’s statutory definition of “bed and breakfast” establishment for purposes of licensing. A licensed B&B is allowed to only serve breakfast. However, please be advised the state statute and Minnesota Rules are not clear if or when a state license is required for a vacation home rental or overnight accommodations of rooms April 2, 2015 Page 2 of 3 www.dmshb.com or “suites” offered to the public within a home when no food is provided. Our review of the state statute and Rules leads us to conclude that a license may be required depending on the length of the rental. For example, rental of a room or rooms for sleeping accommodations offered to the public for period less than a week would fall within the definition of hotel/motel lodging which requires a license, or if the owner provides rent for periods of one week or more, and having five or more beds to let to the public, then it is a “lodging establishment for which a state license is required. But the statute and Rules do not cover a scenario when the owner rents out the entire home as a “vacation home rental” for less than a one-week period or rents out a room to a traveler for 8 days so the period is not less than a week. Further the Rules refer to a “lodging house” in its safety regulations and license fee provisions, but neither the statute nor the Rule defines the term, “lodging house.” It appears that these are unintended gaps in the legislation. Regardless, the city may include any type of operation providing lodging accommodations to the public in residential uses in its licensing or zoning regulations under the City Code. It may also adopt the state health Rules to apply to any and all of the lodging types regulated by City Code.  Would any property providing transient lodging need to conform to ADA requirements? Are there other similar building standards that would apply to transient lodging properties? ANSWER: Depends. Under the ADA, “hotels, motels, inns and other places of lodging designed or constructed after January 26, 1993,” must comply with ADA standards. The ADA rules do not apply if the house was occupied prior to January 26, 1993 and no construction or building permit has been issued since that date. Also, the ADA standards apply only to those portions of the home that are used by the guest, including front entry ways. In short, the application of the ADA rules will be case specific to each operation. However, if a state license is required, the state regulations will dictate ADA, building code, fire code, etc. compliance.  Are there other lodging requirements in statute that would apply to B&Bs? Are those different from what would apply to hotels or other lodging facilities? ANSWER: The lodging standards or requirements under the state statute and Rules are applicable to licensed lodging operation. Hence, those applicable hotels are applicable bed and breakfast operations. Additionally, all licensed lodging establishments are subject to the same fire and health inspections.  If food is served, would a B&B need to have a restaurant license? Does it matter how many rooms it has or how many meals are served? ANSWER: Yes, a license is required~see first bullet above. Any lodging establishment that serves food or beverage or both to its guests must obtain a “restaurant/food license” from the Minnesota Department of Health. The number of guests or number of meals served has April 2, 2015 Page 3 of 3 www.dmshb.com no relevance to a license requirement. It’s merely whether food or beverage is served to guests. However, the number of guests that may be accommodated, not number of rooms, dictates the extent of health department requirements (e.g. small, medium or large establishment dictates type of kitchen facilities). In closing, we note the following considerations for the City in addressing bed & breakfast operations or any other lodging accommodations offered to the public in residential dwellings:  Lodging accommodations in residential dwelling to travelers (the public) for consideration ($$) for short term, whether it be for overnight or a week or two weeks, is a commercial operation in a residential district. It is not a permitted or conditional use in Eagan’s residential districts.  Any home or rooms therein offered to the public for sleeping accommodations falls within this commercial lodging operation. It is irrelevant whether the operation is a “traditional B&B,” a single room or several rooms without any breakfast offered, or a “vacation home rental”—all three provide overnight lodging accommodations to the public for money and thus, all are commercial lodging operations.  These lodging accommodations are subject to the Eagan lodging tax and the tax must be imposed and collected.  A bed and breakfast operation is subject to a state restaurant license and a lodging licens e which have state performance standards and inspections. The other types of home rental operations may be subject to state lodging license. The city may regulate all home lodging accommodations to ensure all are subject to the same rules. The city may regulate by license, conditional use permit or both.  If the city regulates, then it must decide conditions/regulations of the operation. Agenda Information Memo December 12, 2017 Special City Council Workshop VI. Sperry Tower Lighting Policy Update Direction For Consideration: Review updated considerations for the Sperry Tower Lighting Policy and provide direction to staff for accommodating future council action. Facts:  On January 17, 2017, the City Council approved the Sperry Tower Lighting Policy for staff implementation throughout 2017. The policy addressed the aesthetics and lighting details of the telecommunications facility and was intentionally simple for the first year, using a proposed lighting schedule that included only City recognized holidays in additional to a default Eagan Green.  The lighting features on the telecommunications tower have nearly limitless capabilities. The capabilities include the following: o Thousands of individual lights with unique control of each o Wide range of colors (indefinite) o Lighting - remain constant to consistently changing o Coordination of multiple lights creates apparent images that may move or form shapes  The management of the lighting by staff is a new responsibility in addition to typical duties. The programming of the lighting options can have a wide variety of associated responsibilities, from a very little to a considerable amount of time.  Staff has researched policies for similar lighting systems for both public and private facilities, in state and out of state, where schedules are often established for specialty lighting. Lighting of such systems by the owner is typically prioritized as follows: 1) In interest of owner; 2) In interest of immediate community; 3) In interest of community members/representatives; 4) A greater common interest. Requests for special lighting to be added to the schedule of such systems are often allowed through the use of applications from interested parties.  In following with past practices of not declaring "proclamations" for the latest "cause," staff is suggesting the tower lighting schedule avoid "causes" that may be controversial, such as those that are religious or political. Additional schedule observances that are suggested to avoid would be those that are personal or commercial (advertising) in nature. Special lighting for certain conditions or illnesses or the awareness of such things or other common causes, on the contrary, are being suggested as appropriate.  Special lighting applications could be handled similar to the winter trail maintenance petitions. Interested parties would need to submit their application by a date certain, to allow the City Council to consider all requests collectively. Regardless of the timing, this could provide an annual approval of the schedule including the special lighting requests.  Schedule flexibility is included in the lighting policy to enable the celebration or notification of certain events: i.e. Eagan wins a state championship, storm warning (possible future application), etc. Flexibility is also provided in the policy for the incorporation of public art as special lighting without a connection to a specific date.  The draft updated lighting policy has been prepared by staff for the purpose of discussion by the Council at this workshop. Attachments: (3) VI-1 Draft Sperry Tower Lighting Policy VI-2 Draft Tower Lighting Schedule, pages VI-3 Special Lighting Application, page Draft 12-1-17 CITY OF EAGAN SPERRY TOWER LIGHTING POLICY Introduction The City of Eagan has erected a telecommunications tower for the purpose of serving City, County and private telecommunications antennas providing service within the Eagan area. The tower, referenced as the Sperry Tower, was also designed to be an aesthetic enhancement to the City’s skyline. The aesthetics were addressed through the architectural design of the structure and the lighting features. The lighting features on the telecommunications tower, per Council direction, have nearly limitless capabilities. There are a total of 118 lighting fixtures on the tower; 1 fixture per panel (10’ high by 5’ wide), 16 panels per ring, 6 rings on the tower, plus 16 fixtures for the crown (16 pieces, varying heights at 5’ widths), and each of the three legs has 2 flood lights. The base of the panel rings are at 168’, 150’, 132’, 114’, 96’, and 78’ above the ground elevation with an option for a future seventh ring (at 60’). The top of the crown is 187’ above the ground elevation. Each fixture on the ring panels (located at top) and crown pieces (located at bottom) has 48 individual LED light bulbs and is divided into 4 zones; each with their own IP address for control. Each flood light has 12 bulbs controlled by one IP address. A total of 5,448 light bulbs are controlled by 454 separate IP addresses from one controller. The LED light bulbs have an indefinite range of colors. The purpose of the lighting policy is to enable the Sperry Tower to provide a safe, pleasant public art display through its lighting features for the enjoyment and benefit of the Eagan community. Incorporation of the tower lighting has been included as part of the City’s Policy for Public Art and Installation in City Owned or Managed Spaces. The management of the lighting by City staff is an additional responsibility not addressed by position responsibilities. Available lighting options offer a wide variety of associated responsibilities, from very little to a considerable amount, at times. The following policy guidelines consider the related workload impact of staff. At full intensity with all lights on, approximately 8,000 watts of energy would be used at a cost of $7 per day (2016). Anticipated lighting intensities and operating hours (10 minutes after sunset to midnight and 4:00 am to 10 minutes before sunrise each day) would expect an approximate cost of $2.30 per day (19kW/day x $0.1158/kW). The following policy guidelines consider the related energy consumption and cost. Objective The Sperry Tower lighting should principally contribute to the City of Eagan, further enhancing it with a sense of place and confirming the tower as a landmark within the Minneapolis-St. Paul metropolitan area. In doing so, the lighting should: • Draw attention and be memorable Draft 12-1-17 • Engender a unique identity • Celebrate holidays and noteworthy events/accomplishments • Promote the integration of art with urban and architectural design • Encourage innovation and artistic excellence in public art Due to the public’s expectation of prudent fiscal management and the appropriate use of public facilities, it is necessary to ensure all tower lighting is based on the subsequent criteria. The following criteria should be evaluated to ensure the suitability of lighting for the citizens of Eagan while bearing in mind proper fiscal responsibility. The guidelines should be used as general design standards for all lighting to be implemented on the Sperry Tower. A. Comprehensive Lighting Standards a. Default Lighting 1. Color – ‘Eagan Green’ 2. Dynamic feature - flames 3. Schedule - begin at 10 minutes after sunset and continue to midnight, shutdown, begin again at 4:00 am and conclude at 10 minutes before sunrise 4. Schedule Alternative – Add: begin at 10 minutes after sunset and conclude at 10 minutes before sunrise b. Holidays (City recognized) 1. Color(s) – Unique to holiday (see Appendix 1) 2. Dynamic feature(s) - Unique to holiday (see Appendix 1) 3. Schedule – Default, except New Year’s Day (begin at midnight and temporarily conclude 60 minutes after midnight; then default) c. Seasonal Palette 1. Color(s) - Seasonal colors 2. Dynamic feature(s) - Seasonal design in nature 3. Schedule – Default d. Noteworthy Events/Accomplishments 1. Determined by City Administrator 2. Color(s) – Unlimited 3. Dynamic feature(s) – Unlimited 4. Schedule – Default e. Public Safety Announcements/Notifications 1. Coordinate with Emergency Management Manager 2. Color – Red 3. Dynamic feature(s) – Flashing or text 4. Schedule – begin in response to Storm Warning, Amber Alert, etc. and conclude 5 minutes after begin f. Public Art 1. Selection by Committee (Chair - Art House manager) 2. NOT religious, political, personal or commercial in nature 3. Color(s) – Unlimited 4. Dynamic feature(s) – Unlimited, but no videos 5. Schedule – Default Draft 12-1-17 g. External Lighting Requests 1. NOT religious, political, personal or commercial in nature 2. Color(s) – Unlimited 3. Dynamic feature(s) – Unlimited, but no videos 4. Schedule – Default B. Guidelines for Prioritizing Lighting Requests The following criteria shall be applied to all lighting requests from external parties. Only private requests of a nature that are NOT religious, political, personal or commercial shall be considered for acceptance. a. External Lighting Request 1. Privilege, not entitlement 2. Submit application form (on City’s website) 3. No guaranteed approval 4. No feedback obligation regarding status, merit or denial of application 5. No automatic renewal; applicants must submit a new request each year and are not automatically guaranteed to be selected again 6. No lighting for religious, political, personal or commercial events 7. Submit application a minimum of 30 days before requested date b. Application Form 1. Name of organization, contact person, address, telephone number and email address 2. Event description 3. Date of event 4. Specific lighting color - preferably the official RGB color scheme 5. Specific dynamic feature – preferably provide internet link to feature c. Application Approval 1. Notification by City staff within 14 days of submittal if the application has been approved or denied 2. Application conflicting with date of previously approved application or standard lighting schedule will be denied 3. Approved applications granted for a maximum of one night 4. Only one approved application will be granted per requester annually C. Conclusion Tower lighting shall be determined by the Public Works Director, or his designee, utilizing this policy, concerns for public safety, engineering judgement and the calendar. This policy addresses the lighting of the Sperry Tower located at 1420 Towerview Road, Eagan, MN. The facility and property are under the jurisdiction of the City of Eagan. On December 19, 2017, the City Council approved the amended Sperry Tower Lighting Policy for staff implementation. Appendix 1 Sperry Tower Lighting Schedule – 2018 DRAFT Date - Observance Colors Used for Lighting January 1 - New Year's Day Multi-color & Message January 15 – Martin Luther King Jr. Day Red, White and Blue January 27 – Holocaust Remembrance Day Blue February 4 – Super Bowl Team Colors (Multi-color) February 14 - Valentine's Day Red, Pink and White February 19 – Presidents’ Day Red, White and Blue February 24 – Defend the Donut Day Light Brown March 8 – International Women’s Day Pink March 17 - St. Patrick's Day Green March 20 – Day of Happiness Yellow March 22 – World Water Day Blue April 1 – Easter Yellow, Pink and Green April 2 - World Autism Day Blue April 3 - Twins home opener Red and Blue April 8 - Donate Life Day (organ, tissue donation) Green and Blue April 22 - Earth Day Green April 29 – International Bee Day Yellow and Black May 4 - Children's Mental Health Awareness Day Green May 13 - Mother’s Day Pink May 15 - National Peace Officers Memorial Day Blue May 28 - Memorial Day Red, White and Blue June 1 – World Milk Day White Appendix 1 June 14 - Flag Day Red, White and Blue June 17 – Father’s Day Light Blue July 4 - Independence Day Red, White and Blue July 7 – World Chocolate Day Brown July 29 – International Tiger Day Orange and Black August 1 - 35W Bridge Memorial Red, White and Blue August 3 – International Beer Day Gold August 8 – World Cat Day White and Black September tbd - Vikings home opener Purple and Gold September 3 - Labor Day Red, White and Blue September 11 - 9/11 Memorial Red, White and Blue September 21 – International Day of Peace Red, Pink, Yellow, Brown and Black September 29 – International Coffee Day Dark Brown October 1 – Breast Cancer Awareness Month Pink October 5 – World Teachers Day Red, Yellow and Blue October 10 - World Mental Health Day Purple October 20 - Timberwolves home opener Blue, White and Green October 31 - Halloween Orange and Black November 11 - Veterans Day Red, White and Blue November 19 – International Men’s Day Light Blue November 24 - Thanksgiving Day Red, Brown and Orange December 2 – Hanukkah Begins Yellow December 8 – Salvation Army Red Out (volunteering) Red December 24/25 - Christmas Eve/Day Red and Green Appendix 1 December 26 - Kwanzaa begins Red, Black and Green December 31 - New Year’s Eve Multi-colored Application for Special Lighting of the Sperry Tower Contact person Name of organization Address Phone number Email address Event name and description Date requested for lighting event Color(s) requested (you may request multiple colors). Red Maroon Pink Orange Gold Green Blue Light blue Turquoise Purple White Brown Black Application mailing address: Sperry Tower Lighting Application City of Eagan - Utilities Division 3419 Coachman Point Eagan, MN 55122 Email address (for pdf): Publicworks@cityofeagan.com Lighting requests submitted by March 1 each year will be considered for the following 12 months. Applicants will be notified regarding the status of their request. For questions about this form or your submission, call Eagan Utilities Division at 651-675-5200.