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PLNZAD2023-01004 - 4650 W 700 SJanuary 12, 2024 ADMINISTRATIVE INTERPRETATION DECISION AND FINDINGS PLNZAD2023-01004 REQUEST A request by representatives of Dominguez Grid, LLC for an administrative interpretation regarding a proposed use on property in the M-1 (Light Manufacturing) District at approximately 4650 W 700 S (Tax ID# 15-06-100-003-0000). A determination is sought because initial discussions by the applicant raised questions about the proposed use. Per the submitted application, the land use proposed is a battery energy storage system (“BESS”), which will store and release electrical power to support the power demands of Rocky Mountain Power’s (RMP) transmission grid. The applicant believes the use should be considered “Utility, Building or Structure,” which is a permitted use in the M-1 District. Additionally, the applicant has requested clarification as to whether a subdivision will be required in order to proceed with development of the project. Further discussion regarding the subdivision interpretation request is also provided below. DECISION The Zoning Administrator finds that the proposed use as presented in the submitted request is considered “Utility, Building or Structure” as defined in section 21A.62 of the Salt Lake City Zoning Ordinance. As such, it is a permitted use in the M-1 zoning district and is allowed at the proposed location. No subdivision will be required in order to proceed with development of the project. This interpretation is specific to the proposed use as it relates to the Salt Lake City Zoning Ordinance. Additional requirements associated with the use may be required by other divisions, such as Building Services, Public Utilities, or the Fire Department. FINDINGS Use interpretation: The applicant proposes a battery energy storage system (“BESS”) facility that will include multiple battery enclosure structures, each containing racks with batteries and associated equipment. The applicant describes the proposed BESS facility as “a facility which will store excess electricity until electricity needs throughout the surrounding region exceed current electrical supply, at which point the Project will provide the stored electrical power. The Project will be ancillary to the RMP Substation located adjacent to the Property and will support the power demands of RMP’s larger transmission grid.” Staff identified two possible land uses that might fit the proposed use operations: “Utility, Building or Structure” and “Utility, Electric Generation Facility.” The zoning ordinance defines the uses as follows: UTILITY, BUILDING OR STRUCTURE: A building or structure needed to provide distribution, transmittal and maintenance of public utility services for water, sewer and flood control including wells, pumping stations, reservoirs, water treatment plant, water storage tanks, detention basins, lift stations, regulators and other similar facilities unless exempted in section 21A.02.050 of this title. UTILITY, ELECTRIC GENERATION FACILITY: An electric generating facility that uses natural gas, coal, solar energy, steam, wind or other means to produce electricity for exclusive delivery to the local or regional high voltage electric transmission grid. The Zoning Administrator finds that the use described in PLNZAD2023-01004 is most similar to the “Utility, Building or Structure” land use definition. The proposed use cannot be considered a “Utility, Electric Generation Facility” because it does not produce electricity, it only stores electricity that was generated elsewhere. Storing and releasing energy for use as part of RMP’s transmission grid fits the description of providing public utility services, consistent with the definition of “Utility, Building or Structure.” “Utility, Building or Structure” is a permitted use in the M-1 (Light Manufacturing) District. Standards for Use Interpretation: Any use interpretation is subject to the below standards: A. Any use defined in chapter 21.A.62 of this title, shall be interpreted as defined; Finding: Battery energy storage system is not specifically defined in the zoning ordinance. “Utility, Building or Structure” is defined in the zoning ordinance. B. Any use specifically listed without a "P" or "C" designated in the table of permitted and conditional uses for a district shall not be allowed in that zoning district; Finding: “Utility, Building or Structure” is specifically listed in the table of permitted and conditional uses within the M-1 zoning district as a permitted use (P). C. No use interpretation shall allow a proposed use in a district unless evidence is presented demonstrating that the proposed use will comply with the development standards established for that particular district; Finding: The proposed use will be required to comply with the development standards of the M-1 zoning district. D. No use interpretation shall allow any use in a particular district unless such use is substantially similar to the uses allowed in that district and is more similar to such uses than to uses allowed in a less restrictive district; Finding: See finding “B” above. As noted in the discussion above, the use as described is most similar to “Utility, Building or Structure”, which is a permitted use in the M-1 zoning district. E. If the proposed use is most similar to a conditional use authorized in the district in which it is proposed to be located, any use interpretation allowing such use shall require that it may be approved only as a conditional use pursuant to chapter 21.A.54 of this title; Finding: Not applicable. See finding “B” above. F. No use interpretation shall permit the establishment of any use that would be inconsistent with the statement of purpose of that zoning district. Finding: The stated purpose of the M-1 zoning district is as follows: The purpose of the M-1 Light Manufacturing District is to provide an environment for light industrial uses that produce no appreciable impact on adjacent properties, that desire a clean attractive industrial setting, and that protects nearby sensitive lands and waterways. This zone is appropriate in locations that are supported by the applicable Master Plan policies adopted by the City. This district is intended to provide areas in the City that generate employment opportunities and to promote economic development. The uses include other types of land uses that support and provide service to manufacturing and industrial uses. Safe, convenient, and inviting connections that provide access to businesses from public sidewalks, bike paths and streets are necessary and to be provided in an equal way. Certain land uses are prohibited in order to preserve land for manufacturing uses and to promote the importance of nearby environmentally sensitive lands. Utility structures, including battery energy storage systems, fit within the purpose of the M-1 zone. The use is not expected to produce noise, odors, or environmental impacts on adjacent properties. Subdivision Interpretation: The applicant has also requested clarification as to whether a subdivision will be required in order to proceed with development of the BESS facility. The facility is proposed to be built on the property at approximately 4650 W 700 S, which currently includes a RMP Substation on the southern portion of the parcel. The applicant has leased a portion of the property to develop the BESS facility but does not intend to create a new lot for the project. A single property may have multiple uses and lots in M-1 Districts are allowed to have multiple buildings on a single lot, per 21A.36.010.B.2: B. One Principal Building Per Lot: Not more than one principal building shall be located on any lot except that: 2. Lots in the RP, BP, M-1, M-2, AG, AG-2, AG-5, AG-20, A, OS, NOS, and EI Districts may have multiple buildings on a single lot regardless of street frontage and subject to meeting all other zoning regulations. Thus, no subdivision is required in order to develop a new principal use on the parcel. If you have any questions regarding this interpretation, please contact Andy Hulka at (801) 535- 6608 or by email at andy.hulka@slcgov.com. APPEAL PROCESS An applicant or any other person or entity adversely affected by a decision administering or interpreting this Title may appeal to the Appeals Hearing Officer. Notice of appeal shall be filed within ten (10) days of the administrative decision. The appeal shall be filed with the Planning Division and shall specify the decision appealed and the reasons the appellant claims the decision to be in error. Applications for appeals are located on the Planning Division website at https://www.slc.gov/planning/applications/ along with information about how to apply and processing fees. NOTICE Please be advised that a determination finding a particular use to be a permitted use or a conditional use shall not authorize the establishment of such use nor the development, construction, reconstruction, alteration, or moving of any building or structure. It shall merely authorize the preparation, filing, and processing of applications for any approvals and permits that may be required by the codes and ordinances of the City including, but not limited to, a zoning certificate, a building permit, and a certificate of occupancy, subdivision approval, and a site plan approval. Andy Hulka, AICP Inland Port Principal Planner CC: Nick Norris, Planning Director Mayara Lima, Zoning Administrator Casey Stewart, Planning Manager and Development Review Supervisor Posted to Web Attachments: • Applicant’s Addendum to Administrative Interpretation ADDENDUM TO ADMINISTRATIVE INTERPRETATION Dominguez Grid, LLC (“Applicant”), a subsidiary of NextEra Energy Resources, LLC, respectfully submits this addendum (“Addendum”) for an Administrative Interpretation (the “Application”). Applicant is party, as “Lessee”, to that Lease Agreement dated March 8, 2023, with Salt Lake City Corporation (“City”) as owner (the “Lease”) to lease property located at approximately 4800 West 150 South, Salt Lake City (the “Property”), as further described in Section 7 below. The Property is located within the Light Manufacturing District (M-1), Inland Port Overlay (IP) District and the Airport Flight Path Protection Overlay District (AFFP) and is part of a larger parcel of land owned by the City (the “Parcel”). 1. Provision(s) of Code for Which Interpretation is Sought Applicant seeks an interpretation as to whether the “Utility, Building or Structure” use classification, which is a permitted use within the M-1 District, is consistent with Applicant’s proposed use of the Property, as more fully described in this Addendum. See City Code of Salt Lake City, Utah § 21A.33.040 (City Code of Salt Lake City, Utah §§ 21A.02.10. et seq. is referred to herein as the “Zoning Code”). 2. Facts Giving Rise to the Request for Interpretation Applicant has leased the Property to develop a battery energy storage system (“BESS”) adjacent to the 345kv Terminal Substation owned by Rocky Mountain Power, which is located 0.2 miles south of the Property (the “RMP Substation”). Applicant is requesting an Administrative Interpretation to confirm that its proposed use of the Property for a BESS is consistent with the definition of “Utility, Building or Structure” in the Zoning Code and, therefore, a permitted use within the M-1 District and of the Property. 3. Interpretation and Statement For the reasons set forth in this Addendum, Applicant’s view is that the “Utility, Building or Structure” use classification in the Zoning Code is consistent with Applicant’s proposed use of the Property for a BESS facility. Zoning Code § 21A.33.040 provides that the M-1 District allows for a “Utility, Building or Structure” as a permitted use. Pursuant to Zoning Code § 21A.62.040, “Utility, Building or Structure” is defined as “[a] building or structure needed to provide distribution, transmittal and maintenance of public utility services for water, sewer and flood control including wells, pumping stations, reservoirs, water treatment plant, water storage tanks, detention basins, lift stations, regulators and other similar facilities….” The term “public utility” is not defined within the Zoning Code. However, the “Zoning Administrator” (as defined in Zoning Code § 21A.62.040) has recently defined “public utility” in the Administrative Interpretation Decision and Findings PLNZAD2020-00550 dated July 29, 2020 (the “Substation Interpretation”), which evaluated whether an electrical substation is considered a “Utility, Building or Structure”. The Zoning Administrator turned to Webster’s Collegiate Dictionary, finding that a “public utility” is: (1): a service (such as light, power, or water) provided by a public utility; (2): equipment or a piece of equipment to provide such service or a comparable service. In the Substation Interpretation, the Zoning Administrator concluded the substation did meet the “utility” portion of the definition because it provides power. The Zoning Administrator further found that the substation met the “building and structure” portion of the definition, as “structure” is defined in the Zoning Code as “anything constructed or erected with a fixed location on the ground or in/over the water bodies in the city…”, and a substation is fixed to the ground. The Zoning Administrator ultimately concluded the substation was a structure that provides distribution and transmission of public utility services, and thus fits within the definition of “Utility, Building or Structure”. Similarly, and as more particularly described below, the Project is a structure that provides distribution and transmission of public utility services, and therefore fits within the definition of “Utility, Building or Structure”. 4. Applicant’s Activities Applicant is a subsidiary of NextEra Energy Resources, LLC., which is a developer, owner and operator of utility-scale energy storage systems and related equipment and facilities, as well as utility scale solar and wind energy systems and related equipment and facilities. Pursuant to the Lease, Applicant is leasing the Property for the purposes of building, owning, operating, maintaining, and removing a utility-scale energy storage system and related equipment and facilities including facilities associated with energy storage systems, and transmission and interconnection improvements (the “Project”). Generally, the Project is a facility which will store excess electricity until electricity needs throughout the surrounding region exceed current electrical supply, at which point the Project will provide the stored electrical power. The Project will be ancillary to the RMP Substation located adjacent to the Property and will support the power demands of RMP’s larger transmission grid. The BESS Project will consist of many small housing units permanently affixed to the Property, each consisting of one or more battery racks. The battery enclosures will be non-occupiable structures where all contents can be accessed from outside the enclosure. Enclosures will only include batteries and associated protection and control equipment that include built-in fail safes designed specifically to prevent thermal runaway propagation. The containers will be placed on either compacted ground and gravel base, steel piles, or concrete pads, depending on engineering and manufacturer requirements. Applicant’s development and operation of the Project falls within the scope of the Zoning Code’s definition of a “Utility, Building or Structure.” Like a substation, the BESS itself should be considered a “public utility”, as would provide electrical power to the surrounding region and within the surrounding M-1 District. It also meets the definition of Building or Structure, as it is at a fixed location on the ground and is permanently attached. As an ancillary facility to the RMP Substation, it should be categorized the same. 5. Evidence, Documents, Statements Demonstrating the Proposed Use Will Comply with All Use Limitations for the District As stated in the Zoning Code, the M-1 District’s purpose is to “provide an environment for light industrial uses that produce no appreciable impact on adjacent properties, that desire a clean attractive industrial setting, and that protects nearby sensitive lands and waterways. This zone is appropriate in locations that are supported by the applicable Master Plan policies adopted by the City. This district is intended to provide areas in the City that generate employment opportunities and to promote economic development. The uses include other types of land uses that support and provide service to manufacturing and industrial uses.” See Zoning Code § 21A.28.020A. Applicant’s proposed development on the Property is consistent with and will promote the objectives of the M-1 District. It is an industrial use that produces very limited impacts on adjacent property. It also represents a significant capital investment in the City, and thus promotes economic development in the M-1 District. As a related facility to a substation, which the Zoning Administrator has already found is consistent with purpose of the M-1 District pursuant to the Substation Interpretation, the Project is consistent with the goals of the M-1 District. Applicant fully intends to comply with the development standards and other requirements of the M-1 District, the Inland Port Overlay district, and the Airport Flight Path Protection Overlay district that apply to Applicant’s proposed use of the Property. 6. Application of Standards for Administrative Interpretations According to Zoning Code § 21A.12.050, in determining whether a proposed use is permitted or similar to a defined use or allowed in a particular zoning district, the following standards shall govern the Zoning Administrator in issuing a use interpretation: (1) any use defined in Chapter 21A.62 of the Zoning Code shall be interpreted as defined; Application: As detailed in this Addendum, Applicant’s proposed use interpretation of Utility, Building or Structure is based on the definitions set forth in the Zoning Code. (2) any use specifically listed without a “P” or “C” designated in the table of permitted and conditional uses for a district shall not be allowed in that zoning district; Application: Utility, Building or Structures are permitted in the M-1 District. (3) no use interpretation shall allow a proposed use in a district unless evidence is presented demonstrating that the proposed use will comply with the development standards established for that particular district; Application: As set forth in this Addendum, Applicant’s use interpretation will comply with the objectives of both the M-1 District, along with the development standards and other requirements of the M-1 District and all other applicable Zoning Code requirements. (4) no use interpretation shall allow any use in a particular district unless such use is substantially similar to the uses allowed in that district and is more similar to such uses than to uses allowed in a less restrictive district; Application: As discussed in this Addendum, Applicant’s proposed use of the Property to develop the Project is substantially similar to utility buildings, including the RMP Substation, as it is integrated system supporting RMP’s transmission grid and will store and release electrical energy by means of a facility affixed to the ground. (5) if the proposed use is most similar to a conditional use authorized in the district in which it is proposed to be located, any use interpretation allowing such use shall require that it may be approved only as a conditional use; Application: The proposed use is most similar to a permitted use, being “Utility, Building or Structure” in the M-1 District, as it is a facility affixed to the ground to store energy. Applicant also analyzed whether the Project could be considered a Utility, Electric Generation Facility, which is defined as “an electric generating facility that uses natural gas, coal, solar energy, steam, wind or other means to produce electricity for exclusive delivery to the local or regional high voltage electric transmission grid.” The primary distinction between the Project and a Utility, Electric Generation Facility is the production of electricity. A BESS Project does not produce electricity, rather it stores electricity generated elsewhere. The stored electricity is then released as part of RMP’s efforts to balance load and demand across its larger transmission grid. Accordingly, the Project is more similar to a substation in that the Project consists of structures that support the transmission and distribution of electricity across RMP’s transmission grid. (6) no use interpretation shall permit the establishment of any use that would be inconsistent with the statement of purpose of that zoning district. Application: As described above, Applicant’s use interpretation is consistent with the statement of purpose for the M-1 District. The Project would provide electricity to existing and future businesses in the M-1 District. 7. Legal Description and Depiction of the Property A parcel of land situate within the northwest quarter of Section 6, Township 1 South, Range 1 West, Salt Lake Base & Meridian; Salt Lake County, Utah; being described as follows: Beginning at the West Quarter corner of Section 6, Township 1 South, Range 1 West, Salt Lake Base & Meridian as monumented by a found Salt Lake County Flat Brass Cap monument; And running thence North 00°20’10” West 1,339.98 feet along the west section line of said Section 6, Thence North 89°29’43” East 188.63 feet; thence South 00°49’48” East 286.15 feet; thence North 89°59’05” East 505.18 feet; thence South 00°59’57” East 1,053.57 feet; thence South 89°49’11” West 708.46 feet to the point of beginning. Contains 794,780 Square Feet, or 18.245 Acres 8. Additional Subdivision Interpretation Request A question has been raised as to whether subdivision of the Parcel is required to proceed with development of the Project in accordance with the terms of the Lease. Applicant has provided the following information and is requesting written confirmation from the Salt Lake City Planning Division (the “Division”) that, consistent with state and local law as well as the City’s historical practices and prior communications to Applicant, the Division will not require either the City or Applicant to instigate a subdivision of the Parcel. Similar to a commercial lease for a portion of an office building or warehouse, an agricultural lease for a portion of an agricultural parcel, a residential lease for an accessory dwelling unit or portion of a multi-family dwelling, and other leases granting a lessee the right to use and occupy a portion of an existing, legally subdivided lot, parcel, or unit, Applicant’s right to occupy and use the Property does not constitute a division of the Parcel. Pursuant to the terms of the Lease, the City will continue to be the fee owner of the Property (and the remainder of the Parcel) for the term of the Lease, so long as City does not convey the Parcel to a new owner in fee. Even if, relative to the Parcel, there were a subsequent owner in fee, such subsequent owner would be owner of the full Parcel and, relative to the Property, bound by the Lease as further specified therein. The Lease grants Applicant only the right to use and occupy the Property for a limited period of time and only so long as Applicant conforms to the terms of the Lease. State and local law specifically provides that a “subdivision” is land that is intentionally divided for the specific purpose of sale, lease, or development.1 In this case, no subdivision of the Parcel is required for the purpose of leasing the Property, to fulfill the purpose of the Lease, or for immediate or future development of the Project. The City is merely exercising its right to lease the Parcel, or any portion of the Parcel, under the terms of a private lease agreement between the City as owner and the Applicant as lessee.2 It is Applicant’s understanding that, relative to similar projects utilizing part but not all of a City- owned parcel (including, without limitation, the Salt Lake City International Airport), the 1 Utah Code Ann. § 10-9a-103(66)(a) provides that “Subdivision means any land that is divided, resubdivided, or proposed to be divided into two or more lots or other division of land for the purpose, whether immediate or future, for offer, sale, lease, or development…” Zoning Code § 21A.62.040 provides: “SUBDIVISION: Any land that is divided, resubdivided or proposed to be divided into two (2) or more lots, parcels, sites, units, plots, or other division of land for the purpose, whether immediate or future, for offer, sale, lease, or development…” Salt Lake City’s Subdivision Application, p. 2 requiring a subdivision process “for any land that is divided, resubdivided or proposed to be divided into two (2) or more lots, parcels, sites, units, plots or other division of land for the purpose, whether immediate or future, for offer, sale, lease, or development.” 2 Though the Lease provides that a Memorandum of Lease may be recorded in the official records of the Salt Lake County Recorder’s Office, Salt Lake County, Utah, the terms and provisions of the Lease itself remain the private purview of the City and Applicant only. Recordation such memorandum is permitted to put potential future owners of the Parcel on notice that the Property is subject to the Lease. Division has not required subdivision of, and the City has not subdivided the parcel or parcels upon which such projects have been developed. Further, the City has confirmed in prior conversations with Applicant that a subdivision of the Parcel will not be required to develop the Project. Thus, Applicant is requesting that the Division confirm it does not intend to and will not require either City or Applicant to pursue a subdivision of the Parcel, and Applicant will be allowed to proceed with the Project on the Property in accordance with the terms of the Lease and any other state and local requirements governing development of the Project. 30704495_v6