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HomeMy WebLinkAbout06-02-25 JDAJoint Development Authority Monday, June 2, 2025 Arden Hills City Council Chambers Minutes 5:30 pm Roll Call Joint Development Authority: Chair Jon Wicklund, Commissioner Tara Jebens-Singh, Commissioner Kurt Weber, Commissioner Mary Jo McGuire, Commissioner Tena Monson Also present: Jessica Jagoe (Arden Hills); Ella Mitchell (Ramsey County), Jenny Boulton (Kutak Rock) Roll call taken. Approval of Agenda Motion by Commissioner McGuire seconded by Commissioner Jebens-Singh to approve the agenda as presented. Motion carried. Approval of Minutes Commissioner Weber requested a change to the minutes noting the reference to the groundbreaking was made by Commissioner Monson and not Commissioner McGuire. Motion by Commissioner Weber seconded by Commissioner Jebens-Singh to approve the May 5, 2025 JDA meeting minutes as amended. Motion 4-0-1 (Chair Wicklund abstained). Public Input Gregg Larson, 3377 North Snelling Avenue, explained earlier this month the community lost Bev Apilkowski who was the former mayor from 2002 to 2006. He stated Ms. Apilkowski was a proponent for moving the TCAAP project forward and was a wonderful mayor. He discussed how the term sheet and development agreement with Alatus were nearing the deadline of June 30, 2025. He encouraged the JDA to continue to work towards reaching a preliminary agreement with Alatus before the end of the month. Tom Fabel, 1550 Edgewater, explained he was a 40 year resident of Arden Hills. He stated he took the interests of the City of the highest concern. He stated the community was desperate for additional housing and it was his hope the 2,000 units of housing in Rice Creek Commons would move forward. He understood the JDA would be hearing a presentation from Alatus and he was delighted they would be speaking to their project. Lyle Salmela, 1480 Arden Vista Court, stated he has 62 years’ experience in energy and 33 years with NSP/Xcel. He reported he supported Xcel’s gas utility and maintaining profitability while aiming for net zero by 2050. He indicated he suggested pursuing geothermal within Rice Creek Commons and he believed Option 3 seems to be the optimal heat pump choice as it enables each customer to choose their own system. He explained he would also like to see grid solar within the project. He stated Scenario 2 seems to be the best geothermal system. He indicated he had concerns with the number of customers it would take to make it economical and what the cost would be for installation per customer. Consent Agenda None. Old Business None. Public Hearings None. New Business a. Approve Support Letter for Xcel Thermal Energy Network Demonstration Project Director Mitchell stated in February 2025, the Minnesota Public Utilities Commission approved Xcel Energy’s Natural Gas Innovation Plan, in response to Minnesota’s 2021 Natural Gas Innovation Act. The plan is intended to reduce greenhouse gas emissions, explore innovative technologies, and support the state’s transition to a lower-carbon energy future. Xcel Energy's plan includes several pilot programs and research and development projects. One of them is a Thermal Energy Network demonstration project for a roughly 500-ton community ground- source heat pump system owned and operated by Xcel that will provide building heating and cooling as an archetype project. Xcel requests interested communities submit a letter of support for the pilot project saying they would help identify an appropriate site for the project and promote and facilitate the project if selected. By submitting this letter, Xcel will consider our community for participation in this demonstration project, but there is no obligation to participate. Commissioner McGuire stated she believed it would be very valuable it Rice Creek Commons were selected as a demonstration project. Commissioner Monson commented if this were to move forward, it would be a $10 million investment in the community. She asked if staff would be bringing this item back to the City and the County for letters of support. Director Jagoe stated this would be staff’s recommendation. Motion by Commissioner Monson seconded by Commissioner McGuire to approve Letter of Support for Xcel Thermal Energy Network Demonstration Project and directing staff to bring this item back to the City and County for letters of support. Motion carried. b. Review Outlot A Lessons Learned Memo Director Mitchell reviewed a memo that was prepared by Ryan Companies that described the lessons that were learned from the approval process of the first phase of development for Outlot A. Commissioner McGuire thanked Ryan Companies for drafting this memo for the JDA. She asked that staff review this memo to see if there was anything to consider for the future. Commissioner Weber stated he would like to further discuss this memo at a future workshop meeting. Commissioner Jebens-Singh indicated she would also like to hear from staff on the lessons learned from the development out Outlot A. Commissioner Monson questioned if Rick Carter reviewed the memo. Director Mitchell reported Mr. Carter had reviewed the memo and had offered several clarifications to the sustainability guidelines, but no changes were being proposed at this time. Commissioner Monson stated she really appreciated the feedback that was provided by Ryan Companies. Chair Wicklund explained his response to receiving the feedback was to make improvements. He encouraged the respective bodies to take this feedback to their respective bodies. Commissioner Weber indicated he appreciated this recommendation, but stated he believed it would be valuable to have a recommendation from the JDA to the City and County. Commissioner McGuire agreed it would be valuable to have a recommendation. Chair Wicklund stated the Council could take a more formal action and pass this item along to the City and County or this item could be brought back for more discussion at a future workshop meeting. He questioned how the JDA wanted to proceed. The consensus of the JDA was to bring this item back to a future workshop meeting. c. Review Term Sheet Director Mitchell reviewed the term sheet with Alatus noting the document had been updated to reflect the current status of terms for a Development Agreement. Commissioner Monson requested staff walk through the term sheet for the public. Director Mitchell presented the term sheet in further detail with the JDA. She commented on how important the timing was for the project, when the land would be conveyed, and who would be responsible for covering assessments. Commissioner Monson asked what portions of the 2018 agreement were being used. Director Mitchell explained there were some pieces of the 2018 agreement that were being used, but previously the development would move forward in tranches, and now there would be a full conveyance. Chair Wicklund inquired if the minimum 20% affordable housing had been agreed upon with the developer. Director Mitchell reported the 20% minimum had been agreed upon with the developer. Commissioner Monson stated the proposed split between owner and rental units within the development was a really big deal to the Arden Hills City Council. Commissioner Monson requested further information on the prevailing wage ordinance and what an amendment would look like. Director Mitchell explained the prevailing wage ordinance requires prevailing wages to be paid for projects that receive more than $25,000 in County funding. She reported an amendment to the ordinance would require staff review and political considerations. She noted a public hearing would also be required. Commissioner Monson understood the prevailing wage ordinance was a concern for the developer and that it would take a bit of time to amend the ordinance. Commissioner Weber asked what the $25,000 investment in County funding applied to. Director Mitchell stated it was her understanding the County’s investment in remediating the site covered the $25,000 investment and therefore the prevailing wage ordinance applied to both the vertical and horizontal construction that would occur on this site. Commissioner Monson inquired how the County would be defining the metric to measure the developers financial capacity to sustain real estate debt and carrying cost for the full build out. Director Mitchell stated she did not have this answer in front of her. Commissioner Monson explained she would like staff to look into this and provide the JDA with an answer to this question. She thanked staff for all of her efforts on the term sheet and for providing a detailed presentation on this matter. Chair Wicklund questioned how the negotiations with Alatus occurred. Director Mitchell reported the JDA Advisory Commission has been meeting weekly for the past several weeks with the developer, staff and attorneys. Commissioner McGuire thanked staff for the detailed presentation. Commissioner Jebens-Singh discussed how complicated this project was and explained she truly appreciated all of staff’s efforts on the term sheet. Director Mitchell reported there were a lot of core items that were being addressed that were interrelated and staff would continue to work through these items. d. Review Road Map Director Mitchell reviewed the updated road map with the JDA noting the JDA Advisory Committee would be meeting on June 4 and June 18. Commissioner McGuire asked when the next JDA workshop meeting would be held. Chair Wicklund suggested this meeting be held on August 4. e. Receive Alatus Presentation Director Mitchell stated Alatus has requested to present to the JDA on the following topics: • Reasoning behind Alatus proposal to privately fund the mass grading for site and how they see it coming together. • Review the value creation and timing worksheet provided to the advisory group. • Housing affordability and current discussions with Habitat for Humanity. • Alatus’s desire to get to a definitive development agreement and purchase agreement for the property so they can start the mass grading in 2025. Bob Lux, Alatus, thanked the JDA for allowing him to make a presentation. He discussed how he believes this was one of the most important projects and opportunities he would ever have an opportunity to work on. He discussed how Alatus was chosen in 2016 for this project based on its vision for this development which included a dense town center, populated with a variety of housing types with a variety of affordability. He commented on the agreement that was reached for structured parking. He was pleased to report the TRC works for the development as proposed, but commented on how a lot of the work he has to complete was front end loaded. Mr. Lux discussed the affordability guidelines that would be followed within the development. He described a recent housing project he completed in St. Paul and invited the JDA to tour this LIHTC (low-income housing tax credit) affordable housing project. Mr. Lux commented on the housing shortage that was occurring in the metro area noting the region was currently 75,000 to 80,000 units short on affordable housing. Mr. Lux discussed the new partner Alatus had in place to assist with the mass grading. He explained the next step for this project would be to finish the engineering for the spine road and once these plans are complete, Alatus will be ready to finalize the development agreement, land purchase agreement and begin the mass grading as early as this fall. He reported he would need to finalize a reverter agreement between Alatus and the County, which was a right of reentry with the County which would allow the County to take the land back if Alatus does not follow through with the agreement as proposed in the timeline. Mr. Lux commented the plan for Alatus was to take down the entire property in one fell swoop in order to complete the mass grading and soils corrections, the TGRS system can be re- plumbed and the monitoring wells can be put in. After this work is completed, the neighborhood roadways could be installed. Mr. Lux explained he has requested a waiver to the County’s prevailing wage policy for any of the vertical development that includes housing. He stated his reason for doing this would be to keep the housing costs in check. He reported he was proposing to have an audit system in place to ensure all subcontractors were paying their employees properly and that no wage theft was occurring. He commented on how the County’s ordinance or pay policy would turn this entire project into a union job and stated local housing builders were not set up to deal with this. He encouraged the County to consider allowing for the waiver. Mr. Lux discussed how all parties would have to work with the Army and MPCA to get their approval. He described how the TGRS system would be plumbed to the new treatment plant and then be diverted back to the existing treatment facility. He reported the JDA Advisory Committee has been great and he asked that they continue to work with him. He asked that this group continue to work with him and to not give up on all of the work that has been done. He asked that the JDA consider an extension to the 90% Kimley Horn deadline. Chair Wicklund thanked Mr. Lux for his detailed presentation and for the reminder of all of the great work that has been completed to date. Commissioner Jebens-Singh thanked Mr. Lux for coming before the JDA. Commissioner Monson asked when the 90% Kimley Horn deadline was. Director Mitchell stated Kimley Horn was expected to have the spine road plans at 90% in August. Administrative Director’s Report Director Mitchell reported the Energy Advisory Committee met on May 16 and the focus of the meeting was on the findings from the clean energy analysis. She indicated there was continued interest in exploring a district wide energy system. She stated staff was also moving forward with the process of receiving the geothermal grant funds from the State Department of Commerce. She provided the JDA with further information on the County’s Environmental Services Center that was recently constructed in Roseville. Commissioner Weber stated he was interested in touring the Environmental Services Center. Commissioner Monson asked how the JDA would be addressing the developer’s request for an extension. Chair Wicklund recommended the JDA Advisory Committee review this request at their June 4 meeting. Commissioner Monson suggested a meeting be held prior to the end of June after the JDA Advisory Committee meets with the developer two more times. Commissioner Jebens-Singh agreed and asked that staff had as much information gathered as possible prior to this meeting being scheduled. Chair Wicklund asked what day the JDA could meet, if a special meeting were required at the end of June. He recommended staff look at the week of June 23 through June 27 be considered. Development Director’s Report Director Jagoe explained City permits have been issued to Ryan Companies for construction on Outlot A and staff was conducting regular inspections on this project. She reported JDA Advisory and Energy Advisory meetings will continue to be posted on the City’s website. Commissioner Updates None. Adjournment Meeting adjourned at 6:53 pm. Approved _____________________________________ _______________________ Jon Wicklund, Chair Date 6/25/25