The rezoning of nearly an acre of property on Hagerman Street from residential to commercial was the only affordable option for Chelsie Young, who proposed opening a bakery on the vacant lot in a Carlsbad neighborhood.

Young said she and her family looked at commercial properties in Carlsbad but could not afford asking prices ranging from $200,000 to $3.8 million.

“Rezoning our land is the absolute only way we could afford this adventure. I did in fact look at other alternative areas,” she said.

That option was dashed on July 12, when the Carlsbad City Council reaffirmed a denial for the zoning change recommended in June by the City's Planning and Zoning (P&Z) Commission.

Jeff Campbell, marketing director of the Carlsbad Department of Development (CDOD), said pricing for commercial property varied across Carlsbad depending on the location.

“With Carlsbad growing as much as it is, the available inventory of commercial property in more desirable locations has become less over time. This can make the property more expensive, considering all variables,” he said.

“While some barriers to entry, such as property costs, might be high for small business owners just starting out, the overall economic atmosphere is positive,” Campbell said.

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Young, who lives in Texas and property owner Joe Pulice, from Carlsbad sought the zone change from Residential 2 District (R-2) to Commercial 1 District (C-1), according to Carlsbad City Council records.

R-2 is intended to accommodate higher density housing, mobile home parks and subdivisions and provides land-use protection for areas that develop in such a manner, read of City of Carlsbad zoning codes. C-1 is intended to accommodate neighborhood scale retail, office and customer service uses, according to City zoning codes.

"We've had Hell dealing with the City as long as I can remember," Pulice said.

He said the property was in the family's possession for decades and at one time the family lived in a house on Hagerman Street before it burned down nearly 20 years ago.

Pulice said he spent nearly $70,000 demolishing the structure and cleaning up the property.

Past attempts to place housing or a business on the property were turned down by the City, according to Pulice.

"They have never allowed us to do anything with it," he said.

Pulice said he gave the property to Young and her mother.

"I'm tired of messing with it. I pay all the (property) taxes and all the upkeep," he said.

Four City departments recommended to deny the zoning request after residents of the neighborhood circulated a petition protesting the zone change.

"The planning department followed the unanimous recommendation of the Planning and Zoning Commission in its recommendation to the City Council," said City of Carlsbad Planning, Engineering and Regulation Department Director Jeff Patterson.

"The planning department also meets with other city departments to discuss each item scheduled for P&Z.  Members of the Commission (at the P&Z meeting) and then members of City Council (at the Council meeting) listened to public feedback on this topic before voting."

Patterson said the City has not considered any other zoning change requests this year from small business owners intending to located a small business within a residential area.

Sharon Williams, who lives near the property, said residents did not wish to inhibit business growth in the city, rather property owners felt the zone change was not compatible with the fully residential neighborhood.

“There are many and established (business) areas within the City, which are suitable for this type of development,” she said.

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In the petition presented to City of Carlsbad officials, Hagerman Street residents contended the zone change would impact property values, increase traffic, noise, and congestion and disrupt neighborhood activities.

Young said a business in the lot would have only added to the neighborhood - replacing a storage container that sits on the property owned by her family for nearly 40 years - and creating jobs for the booming community.

“I feel like I was targeted, and the board's denial was not in the best interest of the town. My plans for that lot would have only improved the area, created jobs, and increased the economy,” Young said.

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“A bakery is something that my mom and I have talked about opening up for a long time. I am a nurse and wanting to continue on to medical school, however, I also want to help my mom have something that she can support herself with and enjoy doing,” she said.

Carlsbad Mayor Dale Janway said the City has a process in place through a zoning ordinance that ensures that the applicant and interested members of the public receive fair treatment and have an opportunity to appeal the decision to the City Council.

Campbell said CDOD gets requests from small business owners seeking information and advice on rezoning property.

“When people ask about this, we normally refer them to the City of Carlsbad Planning department so they can best assess the situation and offer guidance,” he said.

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“Market conditions can be tough for small business owners just starting out, depending on all variables involved. However, the overall growth of Carlsbad makes opening a business more advantageous now, because the consumer base demands more options."

He said small businesses and Carlsbad's major industries like oil and gas and potash mining led to $1.1 billion in matched taxable gross receipts (MTGR) for the third business quarter of 2022.

Campbell said the New Mexico Taxation and Revenue Department defined MTGR as available tax data showing underlying economic activity.

He said the data collection process matched a tax payment with reported receipts for each taxpayer by industry.

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"Carlsbad has a number of new retail and restaurant businesses slated to open in 2022. Coupled with a balanced approach to industrial growth, area residents and leaders are primed for more," Campbell said.

Young said the family was still looking at options for the bakery and the property on Hagerman Street.

With commercial property at a premium in Carlsbad, Janway expected more zoning change requests in the future.

"We will handle each of these individually, on its own merits, and continue to follow our process," he said.

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"The zoning change process begins with the submission of the application to the City's Planning Department," Patterson said.

He said an applicant was required to send notification letters to all neighbors within 100 feet of the proposed rezoned property.

Patterson said the notification informed neighbors of the zoning change request and lets them know the P&Z Commission will meet and consider the zone change request.

"Once a complete application has been submitted and the notification letters sent, the planning staff schedule the zoning change request for the next available Planning and Zoning Commission meeting. The P&Z meeting serves as the first public hearing for a zoning change request," Patterson said.

He said P&Z considers an item, gathers input at public meetings and then votes to recommend approval or denial to the Carlsbad City Council.

Once the Commission makes its recommendation, the Planning Department schedules the zoning change request to be heard at City Council. The Council is the final decision-maker for zoning changes because zoning changes are accomplished by ordinance," Patterson said.

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He said the Council considers recommendations from the P&Z Commission and takes public input.

"Once the Council considers these factors, they vote to approve or deny the request," Patterson said.

Mike Smith can be reached at 575-628-5546 or by email at MSmith@currentargus.com or @ArgusMichae on Twitter.