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MEMORANDUM To: County Board From: Heather Worthington, Deputy County Manager Date: May 5, 2015 cc: Julie Kleinschmidt, County Manager; Lee Mehrkens, CFO; Mark Ruff, Ehlers; Beth Engum, Public Works; Paul Zisla, RCAO; Jon Horn, Kimley-Horn Re: Rice Creek Commons Land Disposition and Business Subsidy Discussion At the May 5th work session, we would like to discuss a process for disposing of the land at Rice Creek Commons, the former TCAAP site. We also want to introduce a business subsidy polic y, which is a statutory requirement for offering financial incentives (such as write-down in land costs) for economic development projects throughout the County. (See separate memo and policy draft from the RCAO). Market Outlook Over the past 18 months, the real estate market has shifted considerably. When the County purchased the property, the market was still in a recovery phase. At that time, we investigated the possibility of a "master developer" arrangement, where one developer would come in and purchase the entire parcel and redevelop it over a period of years. We found that the market was not sufficiently capitalized to take on a project of this scale. In the last few months, we began to investigate this option more seriously as the market shifted in a positive direction. We wanted to investigate this option for the following reasons: 1) the goal of maintaining flexibility in our approach in order to "meet the market" at various points in the redevelopment; 2) a search for alternatives to a staff-driven redevelopment that would require more resources and capacity from the County in order to be successful; 3) a developer-driven approach can ensure a coherent and consistent approach to development on the site that meets the County Board’s goals around job creation and tax base creation, as well as the Arden Hills City Council’s land-use goals through the Master Plan. After discussions with several developers, as well as one "master developer" (that is, a developer with sufficient capital resources to take on this project), we determined that the market has recovered to a point where the capacity and capital exists for a large scale redevelopment such as Rice Creek Commons (RCC). We are therefore recommending that you consider a process to solicit Development Agent proposals for the redevelopment of RCC.