Request for Committee Action

None. 

The seventeen projects and the twenty-three related grant applications that are being recommended for submission to DEED, the Metropolitan Council and Hennepin County in the spring 2023 brownfield grant round are as follows:

*Amounts shown are based on pre-applications submitted to the City on or by March 10, 2023. The final amounts shown on grant applications submitted to the grantors on or by May 1, 2023 may differ, due to project cost updates prepared after March 10, 2023.

The Minnesota Contamination Cleanup and Investigation Grant Program was established in 1993 to clean up contaminated sites and convert contaminated properties into marketable assets. The Department of Employment and Economic Development [DEED] is the administering state agency. Applications for the spring 2023 grant round are due by May 1, 2023. A local match equal to twenty-five percent of the project costs is required, of which twelve percent must come from non-tax increment local funds. For private projects, the developer provides the local funds portion of the required match. The amount that will be available to fund brownfield investigation and cleanup grants in the spring 2023 round is expected to be about $4.25 million, which includes up to $250,000 for investigation grants. The legislature has designated that at least 35% of available funds be spent on remediating sites in Greater Minnesota unless sufficient applications are not received.

Enacted by the legislature in 1995, the Metropolitan Livable Communities Act designated the Metropolitan Council as the administrator of the Tax Base Revitalization Account [TBRA] Program. This program makes grants to clean up contaminated land for subsequent redevelopment, job retention, and job growth in areas that have lost some of their commercial/industrial base. Applications for the spring 2023 round of this program are due by May 1, 2023. No local match is required for TBRA cleanup grants or for SEED grants. The amount that will be available to fund brownfield cleanup grants in the spring 2023 round is expected to be about $2.5 million, which includes up to $125,000 for TBRA investigation grants and $250,000 for SEED grants. The TBRA program reserves at least one-quarter of the funding available in each grant cycle for projects outside of the two core cities of Minneapolis and St. Paul, and restricts any one municipality from receiving more than half of the funding in any given round.

Hennepin County has been collecting mortgage registry and deed taxes for deposit into an Environmental Response Fund [ERF] and has awarded grants from that fund since the fall of 2001. The ERF is used for the assessment and cleanup of contaminated sites located within Hennepin County, with emphasis on affordable housing projects. Applications for the spring 2023 round of this program are due by May 1, 2023. No local match is required. The amount that will be available to fund brownfield cleanup grants in the spring 2023 round is expected to be about $1.0 - $1.5 million. Typically, about 50% of the available grant funds are awarded to projects within the City of Minneapolis, and the remainder is awarded to projects within suburban communities.

DEED, the Metropolitan Council and Hennepin County are expected to finalize awards for the spring brownfield round sometime between late June and early August. For the spring 2023 brownfield grant round, details regarding the City’s pre-application process and related program requirements were provided to CPED project coordinators and potential applicants in early February. Relevant information was distributed via email to the 4000+ parties on CPED’s Development Notices Distribution List. Staff processing of the submitted pre-applications included consideration of factors such as readiness to proceed with cleanup, removal of blighting influences, commitment of City funds, creation or retention of affordable housing, compliance with zoning requirements and comprehensive plan designations, and job creation.

In this round, staff continued the use of a more rigorous review process that was first implemented during the fall 2012 round. This process requires developers to submit a Grant Assessment Worksheet [GAW] that includes a project fact sheet with information important to the City such as jobs created or retained and the number of affordable housing units to be created. The review also includes other sections regarding various project readiness measures and developer experience. City staff will continue to monitor the progress of the projects referred to herein during April. Applications for any given project will not be submitted on May 1 if, in the opinion of City staff, that project will not be able to meet the grantors’ project readiness expectations as of the May 1 application deadline.

Seventeen projects submitted a total of twenty-four pre-applications for the spring grant round. One pre-application was subsequently withdrawn. All of the remaining twenty-three pre-applications are being recommended for submission to the brownfield grantors. The City’s interactions with our local brownfield grantors during past grant rounds have established that their internal processes for reviewing, scoring and ranking brownfield applications give no weight to any city’s prioritization of the applications that it submits to the grantors. The analyses conducted by the grantors, and the decisions that they make in awarding brownfield grants, are based on statutory criteria and adopted guidelines that do not include the (relative) preferences of municipal applicants regarding the applications submitted. Accordingly, and in keeping with the practice that has been followed by the City in recent years, the recommendation of City staff is that the City Council not rank or prioritize the brownfield applications that it authorizes staff to submit to the brownfield grantors on or by their joint May 1, 2023 application deadline.

The City’s Unified Housing Policy requires affordability for housing projects that receive brownfield grants, unless the City Council approves a waiver of the policy based on the following factors:

1. To allow new market-rate housing development in areas where none has occurred in the previous three years; or
2. When the total combined land value of all parcels involved in the project is less than the total projected environmental investigation and remediation costs required for the project; or
3. To facilitate a phase or building in a large development project that will meet the affordability requirements on a blended basis.

All of the housing-related projects that have indicated a desire to seek brownfield grant funding in the spring 2023 round appear to satisfy the City’s requirements with regard to affordability.

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Details of Recommended Brownfield Projects:

This section of the report presents projects/programs, in alphabetical order, that City staff recommend for submission to the brownfield grantors. The summary descriptions are based upon information provided by the developers or by others familiar with the details of the projects in question. Planning-related comments, and map of the development projects listed below, appear in the attachments to this report.

753 Washington Ave N Project (753 Washington Ave N.)

Projected Met Council SEED Request: $27,491

Swervo Development Corporation intends to construct a multi-tenant office building featuring ground level retail space (15,000 square feet), three levels of parking (70,000 square feet) and eight levels of office space (144,000 square feet) on what is currently a paved parking lot. The projected total development cost is $50,000,000. Grant funds, if awarded, will be used to conduct environmental investigations to determine the nature, extent and location of site contamination.

1301 W Lake Apartments (1301 W Lake St)

Projected DEED Request:                        $231,306

Projected Hennepin County ERF Request: 56,454

                                                                $287,760

CommonBond Communities intends to construct a six-story, 120-unit apartment building. All of the units will be affordable at or below 60% AMI. The projected total development cost is $47,000,000. Grant funds, if awarded, will be used for soil remediation.

1818 Business Center (1818 4th Ave S)

Projected Met Council SEED Request: $27,491

Moltron Builders intends to substantially renovate a one-story, 9257 square foot, 1950’s-era building, to create modern office space for Moltron and three other tenants. The projected total development cost is $2,350,000. Grant funds, if awarded, will be used to conduct environmental investigations to determine the nature, extent and location of site contamination.

Agate Housing (2800 – 2817 27th Ave S)

Projected Met Council TBRA Request:      $215,250

Projected Hennepin County ERF Request: 207,900

                                                                 $ 423,150

Trellis Company and Agate Housing and Services (formerly St. Stephen’s) are partnering to demolish an existing single-family residence and construct a new four-story building that will include two floors (48 units) of affordable permanent supportive housing apartments, and two floors of shelter housing with approximately 54 beds. The projected total development cost is $24,718,884. Grant funds, if awarded, will be used soil remediation, and the abatement of asbestos and/or lead-based paint, and the installation of a vapor mitigation system.

Agra (901 27th Ave S)

Projected DEED Request: $249,184

Wellington Management intends to demolish a vacant restaurant building and construct a 155-unit, fully affordable (30%-60% AMI) multifamily rental building with approximately 1000 square feet of commercial space. The projected total development cost is $52,739,451. Grant funds, if awarded, will be used soil remediation.

East Plymouth Heights (1014 and 1016 Plymouth Ave N)

Projected Met Council SEED Request: $30,175

Northgate Development LLC plans to construct a new mixed-use project on a former gas station site. The housing component will include approximately 60 units (with at least 25% of the units affordable at or below 60% AMI), and the commercial component will include approximately 15,000 square feet of neighborhood-serving retail. The projected total development cost is $34,000,000. Grant funds, if awarded, will be used to conduct environmental investigations to determine the nature, extent and location of site contamination.

Envision Community Penn Avenue (2100, 2106 and 2110 Penn Ave N)

Projected Hennepin County ERF Request: $86,551

Envision Communities, Inc. intends to develop a vacant property by constructing approximately 20 micro-housing units, plus a community courtyard. Individuals who have experienced chronic homelessness and have complex health needs will occupy 20% of the units, and 60% of the units will be reserved for individuals who have experienced housing instability. The projected total development cost is $3,032,449. Grant funds, if awarded, will be used primarily for soil remediation.

Fare Game Restaurant (2900 and 2910 Johnson St NE)

Projected Hennepin County ERF Request: $42,955

Black Duck Holdings LLC plans to completely renovate a building that formerly housed a gas station and a dry cleaner, in order to create a neighborhood restaurant and bar, with an adjoining patio. The projected total development cost is $2,205,000. Grant funds, if awarded, will be used for the installation of a vapor mitigation system.

Fruen Mill Renovation (303 Thomas Ave N)

Projected Met Council SEED Request: $200,000

Graffiti Mill LLC plans to renovate structurally sound concrete and masonry buildings that were formerly part of the Fruen Mill business. Current development plans, which are still evolving, include commercial and mixed-use spaces. The projected total development cost is $10,000,000. Grant funds, if awarded, will be used for the abatement of asbestos and/or lead-based paint.

Kyle Garden Square (700 10th Ave S)

Projected Met Council TBRA Request: $172,000

Alliance Housing is planning an adaptive reuse of an existing four-story commercial/office building. The re-purposed building will provide 59 units of housing, affordable at 30% AMI. All units will serve homeless single adults and small households and persons with disabilities. The projected total development cost is $25,943,188. Grant funds, if awarded, will be used primarily for the abatement of asbestos.

MPRB – Bethune Park (1304 10th Ave N)

Projected Hennepin County ERF Request: $359,402

The Bethune Park project will build a new youth and adult baseball field, and will include player seating and protection, spectator seating, and trail and lighting improvements. The projected total development cost is $1,522,404. Grant funds, if awarded, will be used primarily for soil remediation.

RS EDEN House (1025 Portland Ave S)

Projected Hennepin County ERF Request: $47,220

RS EDEN House, an inpatient chemical abuse/mental health treatment center, is seeking funding to install a vapor mitigation system in an existing building. The projected total development cost is $50,000.

Snelling Yards Family Housing (3601 E 44th St)

Projected Hennepin County ERF Request: $315,000

This project, by Wall Companies and Lupe Development, is Phase 2 of the redevelopment of the former City of Minneapolis Public Works facility. (Phase I was completed by Ecumen in 2022). Phase 2 is a five- story, 90-unit family apartment building, with 69 of the units priced at or below 60% AMI. The projected total development cost is $31,407,000. Grant funds, if awarded, will be used primarily for soil remediation and the installation of a vapor mitigation system.

Stinson Apartments (1714 E Hennepin Ave)

Projected DEED Request:                         $ 62,800

Projected Met Council TBRA Request:      189,668

Projected Hennepin County ERF Request: 50,000

                                                                $302,468

1714 E Hennepin LLC (Ironmark Building Co.) intends to construct a four-story, 24-unit apartment building, with at least 20% of the units affordable at or below 60% AMI. The projected total development cost is $9,319,284. Grant funds, if awarded, will be used primarily for soil remediation and the abatement of asbestos and/or lead-based paint.

The Nicollet Project (3246 Nicollet Ave)

Projected Met Council SEED Request: $12,450

VY Management LLC plans to construct a building that includes 6214 square feet of ground floor commercial space and 62 rental units that are all at or below 60% AMI, primarily for low-income seniors and their families. The projected total development cost is $22,251,254. Grant funds, if awarded, will be used to conduct environmental investigations to determine the nature, extent and location of site contamination.

Unity Building (401-405 E Lake St)

Projected DEED Request:                         $ 44,600

Projected Met Council TBRA Request:      138,924

Projected Hennepin County ERF Request: 32,450

                                                                $215,974

Grass Roots LLC (Ibrahim Demmaj) intends to demolish adjacent one-story and two-story commercial buildings and construct new four-story, 25,000 square foot retail/commercial building. The projected total development cost is $9,105,498. Grant funds, if awarded, will be used primarily for soil remediation, the installation of a vapor mitigation system, and the abatement of asbestos and lead-based paint.

Upper Harbor Park (3301 W River Rd)

Projected Hennepin County ERF Request: $300,000

The Minneapolis Park & Recreation Board intends to develop a 19.5-acre riverfront park within the 50+ acre Upper Harbor Terminal redevelopment area. Park amenities are expected to include (at a minimum) picnic areas, seating, multi-purpose lawn areas and water access. The projected total development cost is TBD. Grant funds, if awarded, will be used primarily for soil remediation.