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HomeMy WebLinkAbout11-04-24 JDAJoint Development Authority Monday, November 4, 2024 Arden Hills City Council Chambers Special JDA Minutes 5:30 pm Roll Call Joint Development Authority: Chair Jon Wicklund, Commissioner Nicole Frethem, Commissioner Victoria Reinhardt, Commissioner Tom Fabel, Commissioner Tena Monson Also present: Jessica Jagoe (Arden Hills); Ella Mitchell (Ramsey County) Roll call taken. Approval of Agenda Motion by Commissioner Fabel seconded by Commissioner Frethem to approve the agenda as presented. Motion carried. Public Input Lyle Salmela, 1480 Arden Vista Court, thanked the JDA for adopting a clean energy policy for the Rice Creek Commons development. He explained he has been waiting for this for the past 10 years. He stated the Ever-Green report was well done but could have more depth on the HVAC and heat pump options. He indicated Option 3 was a more likely option for the project. He believed Option 2 was a decision that should be made between Alatus and Xcel Energy. He recommended an opt out option be included in the agreement. He understood the $10 million grant for infrastructure would be beneficial. He was interested in learning more about the solar options for this site, noting residents would have to have one or two days of battery backup. He commented on how there was still a lot to learn about geothermal and refrigerant flow. He encouraged the JDA to work with Xcel or a consultant on the VFR and the cost benefits of a clean energy program. Consent Agenda None. Old Business None. New Business a. Recommendation for Clean Energy Policy Ms. Mitchell stated green energy and sustainability have long been key components of the vision for Rice Creek Commons: •2014: The JDA established the Environmental Resiliency Advisory Board (ERAB), which defined the original Energy Vision and Guiding Principles for Rice Creek Commons. •2015: The ERAB presented and the JDA accepted the Energy Integration and Resiliency Framework (EIRF), which set a vision to create the largest net-zero energy redevelopment in the state and outlined plans for on-site renewable energy generation and all-electric residential development. •2016: Alatus LLC selected as lead developer. •2023: o Energy Advisory Committee (EAC) convened and refreshed the Green Energy Vision. o Alatus reaffirmed as lead developer for the California Parcel. o Ryan Companies selected as developer for Outlot A. Ms. Mitchell explained changes since the JDA adopted the Energy Integration and Resiliency Framework in 2015 make its ambitious vision even more achievable than when it was originally set. Some key changes include: State clean energy policy: In 2023, the Minnesota state legislature established that electricity in Minnesota must be carbon-free by 2040, meaning that utilities such as Xcel must use only clean sources that do not emit carbon dioxide, including renewable energy like wind and solar. This new reality has shifted the focus of many in the industry from “net-zero energy” to “carbon-free”. Net-zero energy was an important goal when the electric grid was largely powered by carbon-intensive sources. However, now that the entire Minnesota electric grid will be carbon-free by 2040, simply building an all-electric development will achieve most of the greenhouse gas emission goals. Ms. Mitchell reported advances in green energy technologies: Energy-efficient building design, renewable energy technologies, ground-source heat pumps, electric vehicle infrastructure and a high demand for a sustainable built environment have made sustainability strategies the standard for many developers these days. Many of these technologies have advanced so much that they are now the most cost-effective solutions available. New financing sources for green energy: The federal Inflation Reduction Act (IRA) has completely changed the financial feasibility of sustainable development by providing generous incentives for green energy systems and other sustainability measures. Preliminary analysis of the current development plan suggests that large portions of the green energy systems will be eligible for a 40% rebate from the federal government, making a strong financial case for installing these systems, on top of the environmental case. Ms. Mitchell reported in 2023, the JDA engaged Ever-Green Energy and LHB to analyze the feasibility of implementing the Green Energy Vision, taking into account changes to the development plan and technology and financing advances since the EIRF was completed. This analysis comprised three primary components: 1. Comprehensive energy analysis to understand the energy demands of the development, 2. Strategies to reduce that demand, primarily high-performance building design, and 3. Renewable energy technologies to meet the remaining demand. Staff and consultants met with project developers several times to discuss strategies and address questions and concerns. As presented at the October 2024 JDA meeting and described in the Clean Energy Analysis report, Ever-Green and LHB’s analysis demonstrates that switching from a business-as-usual Joint Development Authority TCAAP Redevelopment Project development (current building code, natural gas) to an all-electric development with high-performance buildings would reduce greenhouse gas emissions from the site by over 90%. The remainder of the site’s energy needs could be met by a combination of on-site renewable energy generation (primarily solar photovoltaic) and purchasing carbon-free electricity from Xcel Energy’s Renewable*Connect program, making Rice Creek Commons completely carbon- free. The potential increased costs of high-performance buildings and green energy infrastructure can be offset by a range of rebates and funding sources, including Inflation Reduction Act incentives, Xcel Energy rebates, and the MN Climate Innovation Finance Authority (MNCIFA or Green Bank). Based on this evidence, an all-electric, carbon-free development is technically and financially feasible at Rice Creek Commons. Commissioner Frethem asked if this proposal was for the JDA to adopt an overall policy, but does not dictate the option laid out in the report. Chair Wicklund reported this was the case. He asked that the Energy Advisory Commissioners speak to the clean energy policy. Commissioner Reinhardt explained the idea of having a carbon free development was considered before, but this was the next step. She stated this was doable and she appreciated having research and concrete goals in place. She believed this would be a community of the future, especially for those who want to do what is best for the environment. She thanked Commission Monson for boldly leading the Energy Advisory Committee forward. Commissioner Monson stated this has been something that has been a passion for her given her academic and professional background. She reviewed the proposed guiding principles for Rice Creek Commons, noting this principle focused on creating an economically competitive and attractive environment for developers and businesses to create a vibrant community with multi modal transportation options. She stated she understood this policy was ambitious but she understood the JDA could look to The Heights as an example. She wanted to ensure Rice Creek Commons held firm to its goals of being all electric and carbon free. She commented on the financing options that were available for the district energy system that were third party, which would assist with lessening the burden on the community. She appreciated the fact there was proof this policy could move forward without having material economic impacts. Chair Wicklund asked if the JDA had questions for staff or the consultants at this time. Commissioner Frethem stated she was comfortable voting on the policy, with the understanding there would still be more conversations on how this would be operationalized. She was interested in learning more if carbon offsets would be considered. In addition, she looked forward to learning more about the decentralized geothermal option. Chair Wicklund requested the consultants give a brief presentation on the decentralized geothermal option. Ryan Johnson, Ever-Green Energy, provided the JDA with further information on the decentralized geothermal option for Rice Creek Commons. He explained this option was discussed with Alatus, noting each building would have their own geothermal wellfield to supply heat pumps. He indicated this option was thought to be more economic at this time because of the Inflation Reduction Act (IRA). Commissioner Fabel explained there was a degree of shock from this 50 page report. He applauded the efforts of the Energy Advisory Committee up to this point in time. He stated he had confidence in their work. He commented on how a policy may been seen as a rule and questioned if it was necessary for the JDA to adopt a policy. He stated if a policy were to move forward, some level of flexibility would have to be considered. He recommended the JDA hold a worksession to further discuss the proposed clean energy policy. Commissioner Monson reported the waiver details would be within the design guidelines, laying out what the developer has to do in order to make this development as sustainable and carbon free as possible. She indicated other details could be provided to staff and the consultants as to what the JDA wants, such as all electric, carbon free. Rick Carter, LHB, described how The Heights development was addressing their clean energy goals. He explained why the term waiver was used instead of variance. He stated a zoning code was a policy and the clean energy policy would be viewed in the same manner. He reviewed the different types of waivers that had been considered at The Heights, and discussed the different type of heat sources that would be used within the development. He reported the goal within The Heights was to be carbon free by 2030. Commissioner Fabel thanked Mr. Carter for his comments, but noted as a lawyer, he had a hard time understanding the term policy. He stated he wanted to learn more about what issues would arise as this development moves forward. In addition, he wanted to learn more about what concerns the developer has. He recommended strongly that the JDA hold a worksession meeting to further discuss the clean energy goals for this development. Commissioner Reinhardt stated she did not believe a worksession meeting would get the JDA to the place where a definition of a waiver was found, given the fact the JDA has not chosen which option should move forward. She supported the JDA having a policy in place in order to set the table for this project. She reported the word policy, does not mean the rule of law to her, but she was not an attorney. She indicated the Clean Energy Policy could be renamed the Clean Energy Framework if this was more amenable to the JDA. She reiterated that there was still a lot that had to be decided by the JDA when it comes to clean energy. Commissioner Frethem explained the JDA authorized the Energy Advisory Committee to do this work and to research the feasibility of an all-electric community. She indicated the consultants have discussed the clean energy plan with the developer and there were three feasible pathways forward. She stated she was comfortable with adopting the policy. She feared that delaying action on this policy could delay negotiations on the purchase and sale agreement. Commissioner Fabel stated he could be comfortable with this statement or policy if it was stated as follows: Rice Creek Commons seeks to be an all-electric, carbon free development. Commissioner Monson indicated she supported the language as proposed by Commissioner Frethem and Commissioner Fabel, so long as staff had clear direction on how to move forward. She indicated she could support the name change to the Clean Energy Framework. Mr. Carter stated the language change to “seeks to be” could be a positive change for the policy. He explained he has met with the developer and he understands their concerns. He was of the opinion the developers concerns could be overcome. He discussed how the IRA grant funding would assist with creating a clean energy development. Commissioner Reinhardt supported the seeks to language being added to the policy. She recommended the JDA receive an update from staff at each meeting going forward. Motion by Commissioner Monson seconded by Commissioner Reinhardt to adopt a policy that Rice Creek Commons seeks to be an all-electric, carbon-free development and the JDA directs staff to identify steps to implement this policy and provide updates to the JDA. Motion carried. b. Update on Development Agreement Discussions Ms. Mitchell provided an update on the Development Agreement discussions. She noted the existing term sheet was provided to the JDA within the packet. She commented the county has been negotiating the purchase and sale agreement for the California parcel. Commissioner Monson asked if the design plans for the spine road and grading were moving forward. Ms. Mitchell stated this was the case. She indicated County staff, Kimley Horn and the developer were coordinating on the grading plan in hopes of beginning this work in the spring of 2025. c. Review Road Map Ms. Mitchell reviewed the road map, which included 2025 meeting dates, with the JDA. Commissioner Reinhardt recommended the first meeting of the year for 2025 not be held on January 6. d. Approve 2025 JDA Budget Ms. Mitchell reviewed the proposed budget for 2025 and provided the JDA with a summary of 2024 expenditures through October 31, 2024. Motion by Commissioner Reinhardt seconded by Commissioner Fabel to approve the 2025 JDA Budget. Commissioner Monson requested further information regarding the $90,000 that was budgeted for the green energy and sustainability. Ms. Mitchell explained this expense would cover the first year of LEED for Communities precertification process. Commissioner Monson questioned if legal expenses would increase as negotiations continue with the developer. Ms. Mitchell reported the County’s attorney has been mostly involved in these discussions. She expected this expenditure would come in under $60,000. Motion carried. Administrative Director’s Report Ms. Mitchell had nothing additional to report at this time. Development Director’s Report Director Jagoe reported the Arden Hills City Council held a special worksession meeting on October 15 to discuss Rice Creek Commons and to assign priorities for discussion items relative to topics within the term sheet to be used for scheduling future worksession meetings. Given the advancement of the County towards the completion of the design plans for mass grading and the spine road, as well as the purchase and sale agreement for the California parcel with the developer, the City Council felt the previously agreed upon memorandums of understanding for the civic site and parks, along with the draft cooperative agreement should be reviewed. She indicated these discussion items would be reviewed by the City Council at a special worksession meeting on Thursday, November 7 at 5:30 p.m. Commissioner Reinhardt questioned what would be discussed. Director Jagoe explained the City Council would be discussing the draft cooperative agreement, the parks memorandum of understanding along with the civic site memorandum of understanding. She indicated the Council would like to have Alatus come in to speak to where negotiations are today for these items. Commissioner Monson indicated the City had a term sheet that was negotiated with Alatus in 2022. She stated this was an important document for the City as it addressed the financial impacts. Commissioner Updates Commissioner Reinhardt explained she appreciated how the JDA was seeing fruits of all of their hard work and she was pleased with how well this group has moved this project forward. Commissioner Fabel commented on the report Commissioner Frethem recently posted and stated he was pleased the impasse regarding housing had been settled between the City and the County. He indicated he was very proud of the fact 500 additional housing units had been added to Rice Creek Commons. He thanked everyone for their great work. Commissioner Frethem thanked the JDA members for working to hold difficult conversations in order to reach a consensus. She appreciated the work the JDA was doing to achieve an all- electric, carbon free development. Commissioner Monson explained she appreciated the great functional working partnership the City and County have. She thanked staff for all of their hard work on behalf of the JDA. Adjournment Meeting adjourned at 6:46 pm. Approved _____________________________________ _______________________ Jon Wicklund, Chair Date 12/2/24