History: Minnesota Statutes sections 383B.80 and 383B.81 authorized the county to collect a mortgage registry and deed tax for deposit into an Environmental Response Fund (ERF) intended for the assessment and cleanup of contaminated sites.  By Resolution 97-06-410R1 (adopted June 24, 1997), the board established an ERF, and Resolution 01-09-615 (adopted September 17, 2001) established an ERF policy and grant program.  The main objective of the program is to fund assessment and cleanup of sites that present environmental or public health risks and where proposed activities at these sites have been hampered because of a lack of available funding.

Following approval of the policy, grant application and evaluation criteria were developed to support the parameters outlined in the policy. In order to promote the use of the program, the county periodically solicits proposals from municipalities as well as from nonprofit and for-profit organizations active in the redevelopment of contaminated sites. Many ERF grants address environmental contamination in communities of low-income and color where health disparities exist.

Since November 2001, 30 semi-annual grant cycles have been completed. Through the ERF program, 361 grants, including 15 emergency grants, have been awarded for a total of $50,678,940.

Since 2013, the Brownfields Gap Financing Program has provided $650,000 in small grants to non-profit organizations and government entities for 80 projects, including 54 affordable housing projects, 13 school and community garden projects, 8 neighborhood commercial projects and projects providing daycare and after-school care services. The grants are used for site assessment, community garden soil sampling, and asbestos and lead paint assessment and abatement in support of these projects.

Additionally, the board originally approved the award of a spring 2016 ERF grant on July 12, 2016, for $129,565 to the City of Minneapolis on behalf of CommonBond Communities for asbestos and lead paint abatement at the PRG I project sites (Resolution 16-0250, adopted July 12, 2016). The project sites are occupied by outdated multifamily residences or single family dwellings that CommonBond Communities intends to rehabilitate and retain as affordable housing. This project remains unchanged; however, CommonBond Communities is requested to be the direct contractor rather than the City of Minneapolis.

Current Request: This request is for County Administrator authorization to negotiate nine ERF grant agreements during the period from January 24, 2017 through January 24, 2019, with the total combined amount not to exceed $1,286,947.

A request for proposals was released in September 2016 and 15 applications were received. A committee reviewed the grant applications and recommend funding 9 of the 15 projects. The timing of the ERF grant rounds coincides with contamination cleanup grant programs administered by the Minnesota Department of Employment and Economic Development and the Metropolitan Council in an effort to maximize collaboration between the three funders.

The criteria used to evaluate the grant applications include the potential or known threat to human health or the environment posed by the contamination; the community benefit derived from the proposed cleanup and the benefit of the redevelopment; the likelihood the site will be investigated or cleaned up without the use of ERF money; the commitment of local and other funds to support the project; the public or nonprofit status of the applicant; the creation of affordable or moderately-priced market-rate housing; the creation of economic development; whether assistance with acquisition costs is being requested; whether public end use is being planned for the property; and the degree to which sustainable features are being incorporated into the project.

The fall 2016 ERF award recommendations are summarized as follows and are described in detail in the report, “Hennepin County Environmental Response Fund Funding Recommendations.”

ERF Projects:

• Bassett Creek Watershed Management Commission (Bassett Creek Main Stem Erosion Repair Project, Minneapolis project) - $150,300 for disposal of exposed contaminated soil along the streambank to help improve water quality and habitat along Bassett Creek.
• City of St. Louis Park, or affiliated entity (Carpenter Park Stormwater Improvements, St. Louis Park project) - $166,000 to clean up contaminated soil associated with development of new stormwater management structures and planned park improvements.
• City of Lakes Community Land Trust (CLCLT) or affiliated entity (CLCLT Minneapolis project) - $230,000 for asbestos and lead-based paint abatement associated with the renovation of 10 houses as owner-occupied, permanently affordable housing. 
• Ebenezer Park Apartments, or affiliated entity (Ebenezer Park Apartments, Minneapolis project) - $142,654 for lead-based paint and asbestos abatement at a 200-unit complex for low-income seniors and persons with disabilities.
• City of Minneapolis (Hook and Ladder Apartments, Minneapolis project) - $71,994 for contaminated soil cleanup associated with building 118 units of affordable housing.
• Minneapolis Park and Recreation Board - $142,000 for contaminated soil disposal during construction of the Sheridan Memorial Park on the east bank of the Mississippi River in northeast Minneapolis. Park improvements will include playgrounds and picnic facilities.
• Minnesota Brownfields (countywide) - $250,000 to continue the Brownfields Gap Financing Program, which provides small environmental assessment grants to government entities and non-profit organizations.
• City of Minneapolis (Penn Avenue Union, Minneapolis project) - $41,769 for contaminated soil cleanup associated with the development of affordable and market rate housing, a restaurant, and office space.
• City of St. Louis Park Economic Development Authority (PLACE Development, St. Louis Park project) - $92,230 for demolition and contamination cleanup in preparation for a multi-use development that will include 300 apartment units (200 affordable and 100 market rate), a 110-room hotel, coffee house, bike shop, and microbusiness space.

Additionally, this request is for County Administrator authorization to negotiate ERF grant Agreement A165676 with CommonBond Communities, or affiliated entity, for the period January 24, 2017 through January 24, 2019 with the amount not to exceed $129,565 for asbestos and lead paint abatement for the PRG I project sites in Minneapolis originally approved by the County Board for award to the City of Minneapolis on behalf of CommonBond Communities.

This request also is for approval for grantees to incur costs after the board approval date, with reimbursements being paid upon execution of the grant agreements. 

Impact/Outcome:  The ERF grant awards will fund asbestos and lead paint abatement, contaminated groundwater monitoring, and contaminated soil cleanup.  This funding supports projects that create economic development by increasing the tax base, creating permanent jobs, enhancing greenspace, creating public recreation space, and creating affordable and market-rate housing. The grants will provide for the renovation or construction of up to 567 affordable and 104 market-rate housing units. The authorization of ERF grant Agreement A165676 with CommonBond Communities will assist with retaining and rehabilitation of 42, two- and three-bedroom affordable, rental housing units.

APEX contract description:  PW-EE fall 2016 ERF Grant