City Officials Clash Over Proposed Rules for Last-Mile Delivery Facilities in Decorah

The fire, the vote, the triumph — when it happens, Decorah News shows up. Support us being there. DECORAH — A months-long debate over Amazon delivery hubs operating inside downtown businesses took center stage Monday as Decorah city leaders wrestled with whether the emerging business model belongs in the city's historic commercial district. The discussion, held jointly between the Decorah Planning and Zoning Commission and four members of the Decorah City Council, focused on whether the city should amend its zoning code to allow what officials have termed "last-mile delivery facilities," a category created largely in response to Amazon Hub Delivery operations currently functioning within five local businesses. The discussion was added to the agenda following the City Council's May 18 decision not to set a public hearing on a proposed ordinance recommended by the Planning and Zoning Commission. The ordinance was intended as a compromise that would allow existing businesses to continue participating in the program while limiting the potential for widespread conversion of downtown storefronts into delivery centers. Planning and zoning officials began examining the issue after questions emerged about whether Amazon Hub Delivery activities fit within existing land-use regulations. City Manager Travis Goedken told officials the use is not specifically listed as a permitted principal use in any zoning district under Decorah's zoning code. As a result, city leaders were tasked with determining whether to formally recognize and regulate the activity, prohibit it through enforcement of existing ordinances or pursue a broader reexamination of downtown zoning policies. Throughout the discussion, participants repeatedly emphasized that the debate extends beyond Amazon itself and centers on what types of commercial activities should be encouraged in Decorah's downtown district. Council Member Steve Zittergruen questioned whether package distribution activities contribute to downtown in the same way as traditional retail stores, restaurants and service businesses. "A lot of times, when city planners make decisions, they should focus on what creates spillover traffic," Zittergruen said. "If you bring someone downtown for an ice cream cone, they may walk next door, look at a shirt, and buy it too." "That kind of virtuous cycle that you can create ends up being really good for downtown," he continued. "That's how you have a downtown as historically vibrant as Decorah has been." Zittergruen said zoning decisions should not be based solely on the needs of a handful of existing operators but should consider the long-term impacts on the district as a whole. Council Member Emily Neal voiced concern that allowing package distribution centers in storefronts could create a precedent that gradually changes the character of downtown commercial space. "Anything that we say is an allowable use," Neal said, "you have to imagine every storefront being in that use." Planning and Zoning Commissioner Holly Reilly responded by pointing to provisions in the commission's proposed ordinance that would limit the number of conditional-use permits available for last-mile delivery facilities. Commission Chair Ryan Delaney noted that the proposal did not classify the facilities as a permitted use but instead would allow them only through a conditional-use permit in the C-3 district. Neal acknowledged she had not noticed the permit cap in the proposal but maintained her concerns. "It still isn't operating like a retail business," she said. Commissioner Jerita Balik-Burreson disagreed. "But they are, because, like, Games XP, they're selling games. Kanpai Soda, they sell sodas and candy," Balik-Burreson said. Neal asked whether someone could "literally just rent a building and be an Amazon hub downtown," prompting commission members to explain that such a use would not be allowed under the proposed ordinance. Reilly argued that the city should focus on existing businesses rather than hypothetical future scenarios. "The four businesses that did talk to us multiple times let us know that they would not be able to continue to exist without this supporting their business," Reilly said. When Neal asked what would happen if another business later made the same claim, Reilly responded that the commission was attempting to address current circumstances. "We're trying to deal with what is," Reilly said. "We have four businesses relying on this unallowed use." Reilly said those businesses had been operating for some time before the issue drew regulatory scrutiny and argued that the city should consider ways to help them, whether through future planning efforts, zoning changes or creation of another district. Representatives connected to the program repeatedly emphasized the relatively small scale of local operations. Amazon public policy representative Tim Ehlert said the Decorah facilities should not be compared to the company's large-scale distribution centers. "If you've ever been to or seen one of our last-mile facilities, they are massive and there's tens of thousands of packages moving through each day," Ehlert said. Ehlert said Amazon intentionally limits the size of such operations because participating businesses are expected to continue operating their principal businesses, he said. Business owners involved in the program echoed that argument. Rex Borseth of Games XP said revenue generated through Amazon deliveries has provided important financial support for the downtown business. He said the delivery operation occupies the rear portion of the building and remains largely invisible to customers. According to Borseth, income generated through the program has been reinvested into the business, including planned building improvements and expanded customer space. Supporters of the proposal also questioned whether delivery hubs were being held to a different standard than other activities that generate traffic downtown. Participants cited parcel delivery companies, food delivery services, seasonal festivals and special events that affect parking and traffic patterns. The debate also exposed frustration among officials over the city's handling of the issue. Several commissioners noted that discussions have stretched across multiple meetings since January without reaching a final resolution. Commissioner Megan Buckingham called the drawn-out process "a little bit absurd." "I feel we're getting some conflicting responses from City Council members about the best path forward," Buckingham said. She also called out Ehlert, saying, "I apologize, but, sir, you don't live in our town," implying that he was unfamiliar with the complexities of living and operating in Decorah. Buckingham asked council members what they hoped to accomplish through continued discussion, saying she did not expect a different recommendation from the commission. Council Member Johanna Bergan argued that the city has already spent significant time debating possible accommodations while businesses continue operating despite the activity not being explicitly permitted under current code. "As a leader, I have concerns about how long the city should not enforce code," Bergan said. Bergan said enforcement of the zoning ordinance as written should remain an option under consideration. "I think that should be on the table for discussion," she said. Under that approach, existing Amazon Hub Delivery operations would be required to cease unless and until city regulations are amended. The possibility prompted discussion about whether current operators could qualify as legal nonconforming uses if new restrictions are adopted. Goedken said that because the activity was never formally recognized as a permitted use, existing operations would not necessarily qualify for grandfathered status under traditional zoning principles. No formal action was taken during the discussion, and the issue is expected to return to the Decorah City Council for further consideration. Be in the know, always! The free newsletter delivers local news, features, and tips directly to you—perfect for busy readers.