The Amazing Shrinking Environmental Review

Oct 12

11 min read

Updated: Oct 17

How developer bias captured Shorewood City Hall — and what it costs the people who live here.

Part Two of five in Anatomy of a Captured City. Start here for the short version. This is the evidence — a chronology, taken from the City's own records. The source documents are quoted in full in the record appendix at the end.

In February, the Shorewood City Council ordered an environmental review of the Watten Ponds development, covering all four properties owned by the developer. The developer demanded that the City limit the review to one property. And lo and behold, by September the City Attorney was telling the Council that the review covered only one parcel, exactly as the developer had asked — that it doesn't reach the two parcels immediately north of it, that those parcels can be combined, sold, cleared and built on administratively, and that the Council has no say in any of it.

Nobody announced that change. There was never a vote on it. Here is how it happened.

February 23 — the Council orders the review

Residents petitioned for an Environmental Assessment Worksheet. The petition described what the developer was doing, and it was specific about the northern parcels:

The developer also owns two plots north of the Watten Ponds project and intends to build additional homes there but has omitted them from the current application to take advantage of more lenient regulations on developments of less than 3 houses. The developer also owns additional property to the east, with the intent of developing at least 3 additional new houses, for a total, phased development of 7 new houses.

Read that twice. The petition says these are one phased development, and says the northern parcels were left out of the application to stay under a regulatory threshold. That is not our characterization — it is in the document.

The Council approved that petition in Resolution 26-15. The same night, the Planning Director told the Council it covered four Gravity-owned properties: the Watten Ponds parcel being subdivided, the two parcels north of Clara Avenue now being combined, and 25725 Birch Bluff Road.

And look at how the Council approved it. The resolution's operative paragraph, under the heading DECISION, reads in its entirety:

The Petition is hereby APPROVED.

Not an EAW is ordered for the Project. Not the Subject Property is subject to environmental review. The Petition — the document quoted above.

The findings run the same way. The Council ordered the review because of cumulative potential effects, loss of ecosystems that cannot be replaced, unknown hydrological impacts on the interconnected wetlands, and stormwater impacts on the entire neighborhood. These four properties are one continuous wooded area — you cannot tell where one ends and the next begins, and destroying one damages them all. Those are not findings about a single platted lot.

Everybody knew it covered all four

Set the legal argument aside for a minute. Here is what the City itself said and did.

On February 23 the Planning Director told the Council the petition covered four properties — the Watten Ponds lot being subdivided, the two parcels north of Clara Avenue, and 25725 Birch Bluff Road. All four owned by this developer.

Then the City told the developer the same thing. We know because the developer's own lawyers complained about it in writing: staff had told them no grading or building permits could issue for 25725 Birch Bluff Road until the environmental review was finished.

So in February, and well into the spring, nobody at City Hall thought this review covered one lot. The City said four. It acted like four. The developer's lawyers wrote a letter objecting that it was four.

Then it was one, and nobody voted.

April 17 — the developer's lawyers write

Counsel for the developer wrote the City, asking for one of two things:

Gravity is requesting that the City Council either 1) direct City Staff that Resolution [26]-15 only pertains to the Property… for which Gravity has requested a preliminary and final plat; or 2) remove the Unrelated Properties from its grant of the EAW.

Otherwise, Gravity will have no option but to commence a district court action to recover the damages incurred.

The Unrelated Properties are the same parcels the approved petition had described as a phased development of seven houses.

Two things in that letter are worth noting. The first is the basis for calling them separate: they are not connected or associated with the Watten Pond 2nd Addition due to the separation created by Clara Avenue. Clara Avenue is a street that exists on paper and has never been built.

These aren’t side by side pictures – it’s one picture with a red line that we added to show where the make believe divider is between property that is and is not covered under the City's decision.

The second is a document the letter quotes against itself. Explaining why residents thought the parcels were related, it reproduces a notation from the City Engineer's own map: Land owned by same developer and likely a future phase. That is not the petitioners' characterization. That is the City's engineer, on the City's map.

May 28 — a closed session

The Council met in closed session with its attorneys about the threatened lawsuit. There is nothing improper about that, and we don't know what was said.

What the public record shows is what came before and after. Before: a review that the City, the developer and the petition all treated as covering four properties. After: a different answer.

Resolution 26-15 was never amended, narrowed, or reinterpreted at an open meeting. There was no vote. Nobody outside City Hall can say when the scope of this review changed, or who changed it.

September 14 — the new answer

The question surfaced at a Council meeting, on an item about combining the northern lots. The Planning Director noted that lot combinations are normally handled administratively, not on the Council's Agenda. The City Attorney then told the Council that while the petition had asked for more, the Council's resolution confined the project to the two-lot Watten Ponds subdivision; it does not include this parcel — and that as the EAW process plays out, it does not give the Council any ability to impact the lot combination. Full passage in the record appendix below.

Here is the part worth checking yourself. It is nerdy legal stuff, but it's the whole ballgame. The definitions he relied on — Subject Property, Project — appear in the resolution's recitals, the whereas clauses describing what the applicant had asked for and what had happened so far. The paragraph that actually decides something says the Petition is approved.

A recital describes. A decision decides. The resolution approved the Petition. The City Attorney reached past that and used non-binding background language to tell the Council that its own approval doesn't cover things it plainly does.

Compare that to what the developer's lawyers asked for in April. Option one in their letter was that the Council direct City Staff that Resolution 26-15 only pertains to the Property. That is, within a word or two, what the Council was told in September had been the case all along.

Capture 101 — the answer staff wants, not the answer the Council needs

Start with the question that got asked. Does the resolution cover these parcels?

On the one hand, the answer to that is clearly yes, for the reasons above.

But it is not the important question. The important question is what the environmental review covers, and that is broader than the resolutions. It depends on what the Council approved, and also on what the rules require an EAW to contain. Different questions, different answers — and only one of them, the wrong one, the one that favors the developer, was put on the table.

And then the Council was told, incorrectly, what its resolution does not cover. Full stop. It was not told that it can clarify its own resolution. It was not told that it can order a review of the northern parcels on its own motion, with no petition and no signatures. It was not told that either one would stop permits from issuing until the review is done.

In other words: the Council was told what the developer wanted, and was never told it had tools in hand to get what the Council wanted. Imagine a doctor telling you you're going to die and leaving off the next part — unless you take this pill.

This is as clear an example of capture as you will find.

Because none of it is obscure. It is in the same rules, a few pages apart. And a lawyer advising a client lays out the options — I read it this way, but if you intended something broader, here is how you get there.

The Council got one answer: the one that delivers the outcome staff was already heading toward. It never got its other choices. Its power was narrowed by a staff member nobody elected.

And a council that doesn't know it has a choice doesn't have one — you cannot make a decision you don't know is yours to make. That is the whole mechanism, and nobody has to lie to run it. You answer the question accurately, and leave out the part where the Council could have decided something else.

Advice that starts with what are you trying to accomplish, and how do I get you there treats the Council as the decision-maker. Advice that starts with here is what you can't do treats the decision as already made.

You can disagree with the City Attorney's reading of the resolution. What should worry you is that the Council was never asked what it wanted the resolution to do.

What that means on the ground

The parcels get combined. They get sold — the Birch Bluff property is listed publicly as a rare opportunity to build. Then they get cleared and built on, and a building permit for a house on an existing lot is applied for online and reviewed by staff. It never comes to the Council. Nobody votes. By the time anyone outside City Hall knows a decision was made, the trees are down.

Note the address, too. 25725 Birch Bluff Road was told it couldn't get grading or building permits until the EAW was finished. The northern parcels, currently listed under that same street address, are being told they can proceed administratively. Same address, opposite answer, no public explanation.

One clear winner. A lot of clear losers.

The same catch-22, in a different rulebook

We have seen this before. In the Tree Preservation Policy, a tree is protected only if the Zoning Administrator designates it as especially valuable, and nothing requires anyone to take up the question. The environmental rules are built the same way: connected and phased projects must be considered in total — but only once a governmental unit determines they are connected or phased. Minn. R. 4410.0200, subps. 9c and 60.

If you don't ask the question, you don't get the answer you were trying to avoid. No determination was ever made here. Not that these parcels are connected, not that they aren't. The question never got asked. And by default, the developer wins.

Different rulebook, same defect. The protection exists only if somebody invokes it, and nobody is ever required to.

What the Council can actually do

Two things, either of which it can do on its own.

Pass a clarifying resolution confirming that Resolution 26-15 covers all four Gravity-owned parcels. This isn't new policy. It's confirming what the approved petition said and what the Planning Director told the Council on February 23.

Or order an environmental review of the northern parcels directly. Under Minn. R. 4410.1000, subp. 3, a governmental unit with approval authority can order an EAW on its own motion. No petition, no signatures.

Either one has teeth. Under Minn. R. 4410.3100, subp. 1, once an EAW is required, a final governmental decision may not be made to grant a permit, approve a project, or begin a project until the review is finished — and beginning a project includes clearing land. Nothing else on the table stops a permit from issuing. Asking staff to reconsider, or asking for a second opinion, are reasonable requests that will not stop anything, because permits keep moving while the Council considers them.

Two Council members can put a clarifying resolution on the next agenda. That is the whole ask.

Bottom line

A resolution ordering environmental review of a phased development has been read down to a single platted lot, and the parcels the petition specifically identified as the next phase are now outside the review entirely.

No one voted for that. It just happened, a little at a time, in the direction the applicant wanted.

That is what capture looks like when it reaches a question of scope.

The record appendix

Everything above comes from these documents. They are public records, and we would rather you read them than take our word for any of it.

1. The petition approved by Resolution 26-15, on the scope of the development.

2. Resolution 26-15, operative paragraph, in its entirety.

DECISION

The Petition is hereby APPROVED.

3. Resolution 26-15, findings. The Council found, among other things, the potential for cumulative potential effects, loss of ecosystems that cannot be replaced, unknown hydrological impacts on the interconnected wetlands, and stormwater impacts on the entire neighborhood.

4. Letter from counsel for Gravity Investment LLC to the City, April 17, 2026.

Gravity is requesting that the City Council either 1) direct City Staff that Resolution 26-15 only pertains to the Property for which Gravity has requested a preliminary and final plat; or 2) remove the Unrelated Properties from its grant of the EAW.

Gravity will have no option but to commence a district court action to recover the damages incurred.

On the claimed separation: the northern parcels are not connected or associated with the Watten Pond 2nd Addition due to the separation created by Clara Avenue. Quoting the City Engineer's map, the same letter reproduces the notation: Land owned by same developer and likely a future phase.

5. City Council minutes, September 14, 2026.

The Planning Director noted that this process is normally handled administratively, not on the Council's Agenda.

The City Attorney reminded the Council of their decision. He noted that the EAW petition requested that it involve not only the two lots in the Watten Ponds subdivision proposals, but also other lots. The Council's resolution, however, confined the project to the two-lot Watten Ponds subdivision; it does not include this parcel. He added that as the EAW process plays out, it does not give the Council any ability to impact the lot combination.

6. The rules referred to above. Minn. R. 4410.0200, subps. 9c and 60 (connected and phased actions); Minn. R. 4410.1000, subp. 3 (a governmental unit may order an EAW on its own motion); Minn. R. 4410.1000, subp. 4 (connected and phased actions must be considered in total in preparing an EAW); Minn. R. 4410.3100, subp. 1 (no final decision to grant a permit, approve a project, or begin a project while an EAW is pending).

All quotations are from public records obtained from the City of Shorewood, including records produced under the Minnesota Government Data Practices Act.

Anatomy of a Captured City

How developer bias captured Shorewood City Hall.

Public watchdog or developer lapdog? Capture and Why You Pay — The name for what happens when a regulator starts seeing things the way the people it regulates do.
The Amazing Shrinking Environmental Review — An environmental review ordered in February covered one lot by September. Nobody voted. A chronology from the City's own records.
Eleven Tools, Not One Used - a Tree Preservation Policy that Doesn't Preserve Trees — The City's tree policy gave it eleven powers over how these woods come down. There is no record it used one of them.
One and a Half Percent, a Story of a Flood Foretold — The stormwater report left only a 1.5% margin on the largest storm, uphill of homes that have already flooded, without the City's file showing that the assumptions were checked.
Letting the Clock Run Out — The City is defending its own decision on appeal. Read what its brief leaves out.
How It Happens, and What to Do About It — Why this happens to normal people, and the two small things we're asking the City Council to do.