Builders to Edina: Change your tree ordinance or we might sue

Holly Gillis thought she'd found the perfect place to build her home in Edina. Then came a $95,000 surprise.

The city wanted her to put that much money in escrow until she could prove she'd planted new trees to replace the ones felled during construction — and officials intended to hold the money there until she proved the new ones survived.

"It's a nightmare," Gillis said. "I truly do care deeply about the environment, and it just seems like an intentional money grab by the city."

The payment was required under a nearly two-year-old ordinance that was designed to protect the city's tree canopy, help the environment and preserve the city's character. But some contractors say the new rules have had unexpected consequences for their clients.

Housing First Minnesota, a group representing builders, sent city leaders a demand letter earlier this fall urging them to change the ordinance — or the group might sue.

"There are a handful of cities that will have some type of tree replacement ordinance when it comes to new construction, but I've never seen anything as aggressive as the figures being floated in Edina," said Nick Erickson, the group's senior director of housing policy.

City Manager Scott Neal is set to meet with the group this month and said he's open to hearing their suggestions, though he stopped short of promising changes.

"I think our end goal is not to hold escrow money for people. Our end goal is to preserve our tree canopy," Neal said. "If there is a better or different way to do that, and Housing First Minnesota has those ideas, we're happy to listen to them."

Trying to save the tree canopy

Neal said the city began enacting tree preservation ordinances about a decade ago, after hearing from residents who worried that too many old trees were being removed during redevelopment. The latest controversy stems from a change that took effect in 2023.

When people are seeking building permits in Edina, they need to submit a tree protection plan that details which old trees will be protected and how. If the trees are being removed, the applicants need to outline how they'll replace them.

Trees that are being removed are assigned a dollar amount based on their species and size, and applicants must place money in escrow until they can prove that comparable replacements survived. There are exceptions for some trees that are considered invasive or threatened, such as ash trees.

City officials said they have reviewed 455 permits since January 2023, of which 68 required an escrow. They estimated that 3,677 trees were preserved during that process, and 755 were removed.

"The goal is to reduce the amount of old-growth trees that are removed for development projects," Neal said. "That's the goal. If we can do that by cooperating and helping people site their building and their construction in a way that reduces tree damage, that's great. That's one way to do it. But another way to do it is to build in some financial incentives and disincentives that encourage people to preserve trees rather than remove."

Budgeting for building

Gillis and her husband, Ethan Bassett, moved to Edina from Ohio. When they were looking for houses last year, the market was tight, and they struggled to find an existing home they liked. They decided on a sloped, heavily wooded lot that had been zoned for residential but didn't yet have a house on the site.

"Part of the reason we bought the lot is because it had trees, and we wanted to keep as many as possible," Gillis said. "And that turned out to be an extremely expensive request."

Gillis said the tree preservation requirements weren't disclosed to her when they were buying the lot, and she believes there should be stronger protections in place for future buyers. Finding large replacement trees has been difficult, she said, and landscapers and city leaders have at times disagreed on which types of replacement trees should count toward the requirements.

City leaders made some changes to the ordinance after hearing from Gillis and other residents and builders who raised concerns about the rules. The escrow period now lasts one year, instead of three. The council added retroactive exemptions for unbuilt lots. City leaders said the average escrow paid now is about $15,550.

Gillis said she has been able to get much of her money back, but somewhere between $25,000 and $30,000 remains in escrow.

She had hoped to plant prairie grass and wildflowers to help protect bees and promote biodiversity, but those plans changed when they learned how much money they had to set aside for the trees.

They went with more traditional grass because it was less expensive. She planned to remove buckthorn, an invasive species that was threatening other trees on the lot, but that will have to wait.

"It dramatically affected our build," Gillis said of the escrow requirements. "All that money came from, ironically, our landscape budget."