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HomeMy WebLinkAbout05-30-07-S (2) ~ ~~HILLS Approved: January 14, 2008 CITY OF ARDEN HILLS, MINNESOTA SPECIAL CITY COUNCIL MEETING MAY 30,2007; 5:30 PM ARDEN HILLS CITY COUNCIL CHAMBERS CALL TO ORDER/ROLL CALL Pursuant to due call and notice thereof, Mayor Stan Harpstead called to order the special City Council meeting at 5:45 p.m. Present: Mayor Stan Harpstead, Councilmember David Grant, Councilmember Fran Holmes, Councilmember Brenda Holden, Councilmember David McClung (arrived 6:15 p.m.) Absent: None. Also present were City Administrator Michelle Wolfe; Finance Director Sue Iverson, Community Development Director Karen Barton, TCAAP Attorney Michael Comodeca, TCAAP Attorney Steve Bubul (arrived 6:05 p.m.). DISCUSSION The Mayor noted that the purpose of the meeting was to meet with Mr. Comodeca on legal issues relating to the transfer of the TCAAP property. Councilmember Holmes indicated that she had met with Mr. Comodeca to review issues relating to the City's potential liability. Ms. Holmes stated she had had some concerns regarding 3"d party liability, and was less concerned regarding clean-up liability since that seemed quite clear. Ms. Holmes and Mr. Comodeca reviewed a memorandum prepared by Mr. Comodeca dated April 5, 2007. Mr. Comodeca reviewed the concept of CERCLA. He stated that the City needs to be a bona fide prospective purchaser. He outlined what steps we would need to take to limit the City's liability. He stated that there are a number of protections that we can put in place. For example, the City should hire someone to do "all appropriate inquiries" as required under CERCLA. This can be funded through the development agreement. He indicated that this protects the City from clean up costs, but not third-party liability. He further noted that the EP A policy is that they don't take action against transferees. There is a state equivalent called MERLA. The City will want to get a letter from MPCA stating that the City is not a responsible purchaser. ARDEN HILLS CITY COUNCIL - MAY 30, 2007 2 Mayor Harpstead asked how finding regarding Long Lake could affect this transfer process. Mr. Comodeca replied that it impacts the Army if it is a groundwater issue. If also a soils issue, could impact clean-up conducted by the developer. Councilmember Holden asked about insurance, wondering who pays if some new contaminant is found on the site. Mr. Comodeca responded that environmental insurance is another protection. Cost-cap insurance estimates the cost of clean-up, and provides protection if the cost is higher. There is also PLL coverage, which covers against third-party liability. Mr. Comodeca was asked how much indenmity the City can get from the developer relating to third-party liability. Mr. Bubul mentioned that this had been a lengthy discussion with the developer and will continue to be discussed. Councilmember Holden asked about deeding property back to the City for parks and other uses. She was concerned what kind of liability there would be for the City in those cases. Mr. Comodeca stated that the City will need to really work at making sure protections are in place. Mr. Comodeca indicated that insurance renewal could be an issue if clean-up is not complete prior to insurance term. Ms. Barton stated that in current discussions, the developer has indicated and estimate that the clean up would take approximately three years. Councilmember Holmes asked Mr. Bubul about indemnity issues in the Master Development Agreement (MDA). Mr. Bubul responded that it could be perpetual. He stated that we will want indemnity from individual companies, not from "RRLD". Mr. Comodeca stated that the City should get indemnity from the developer. Mr. Bubul explained redevelopment project areas in relation to MERLA. There will be a City process, with a public hearing and adoption of a plan. Mayor Harpstead indicated that the City needs to discuss what would happen in the event of a default. The City may not want to take title or direct clean-up. Mr. Comodeca stated that the City would not want to incur CERCLA liability as an operator, so this would have to be addressed in the MDA. Mr. Bubul indicated that there will likely be multiple lenders for the project, and the lenders will be involved, which is another level of protection. The lender can come in and clean the property and not be an owner. He stated that the more the City gets involved in clean-up, the more liability the City may be exposed to. Mr. Harpstead asked about the FOST vs. FOSET process. Mr. Comodeca stated that the MPCA and EP A have concerns about this as well. The number of FOSET acres has expanded. Ms. Barton stated that she believes the number of FOSET acres is not 39.5 acres (it had been 22 - 24 acres). Since this was still under the review, the number could still increase. She stated that the ARDEN HILLS CITY COUNCIL - MAY 30, 2007 3 Army is currently working on Site C clean-up; if they complete the work prior to transfer, it would become FOST rather than FOSET property. Councilmember Holden asked again about the City owning property for parks and open spaces. Mr. Comodeca stated that the City needs to make extra sure to be a bona fid prospective purchaser, updating studies as needed. He stated that he thinks the City can protect itself in that situation; there are various ways for providing that protection. Mr. Harpstead asked about financial assurances. Mr. Comodeca replied that as he relayed in a recent e-mail, Army has accepted to conceptual terms. Mr. Harpstead asked if Congressional pressure is needed. Mr. Comodeca replied he did not believe that was necessary at this time. It appears the June 15 deadline for agreement will be met. Mr. Comodeca indicated that the August 31 deadline it will likely need to be moved due to the delay in the sampling process. Mayor Harpstead and Councilmember Holmes left the meeting at 6:39 p.m. Councilmember Holden asked about the term of liability protection. Mr. Comodeca stated it is hard to look more than ten years out. Ms. Holden asked how it will be detennined whether clean-up is for residential vs. commercial standards. Mr. Comodeca replied that there are formulas for that. ADJOURNMENT Mayor Harpstea ~D", Mayor adjourned the Special City Council Meeting at 6:45 p.m. ~~ Noah A. Simon Deputy Clerk