History: The Environmental Response Fund (ERF) helps revitalize sites by providing funding to assess and clean up contamination. The grants reduce barriers to site improvement or redevelopment caused by the added costs of environmental cleanup and lessen the risk to human health and the environment posed by the contamination.

Minnesota Statutes, sections 383B.80 and 383B.81, authorize the county to collect a mortgage registry and deed tax for the purpose of establishing an environmental response fund. The board established the ERF in 1997 (Resolution 97-06-410R1) and authorized the grant program in 2001 (Resolution 01-615).

Projects supported by ERF grants provide a variety of community benefits, including creating affordable and moderately priced housing, supporting economic development, developing green space, and making infrastructure improvements. Many ERF grants address environmental contamination in communities with significant disparities in health, including low-income areas and communities of color. Some of these sites become a catalyst for new development in neighboring areas, which can help address racial disparities in housing, employment, and income.

As a major economic center for 150 years, the county has a concentration of contaminated sites. Much of this contamination was caused by chemical spills or improper disposal of hazardous waste prior to the existence of environmental regulations. These improper disposal practices of the past can still cause soil and groundwater pollution that present environmental risks today. In addition, many buildings in Hennepin County, particularly in Minneapolis and the inner ring suburbs, were constructed prior to 1970 when the use of asbestos and lead-based paint was prevalent.

Since 2001, ERF has funded 436 projects totaling $62,750,223.

Current Request: This request is for County Administrator authorization to negotiate 12 ERF grant agreements during various periods, with the total combined amount not to exceed $3,811,198.

In January 2022, the county solicited proposals from municipalities and nonprofit and for-profit developers. To maximize collaboration between funders, the timing of the ERF grant round coincides with additional contamination cleanup grant programs administered by the Minnesota Department of Employment and Economic Development and the Metropolitan Council.

A committee reviewed the grant applications and recommended funding 12 of the 12 project applications received. Applications were evaluated on project need, degree of contamination, the appropriateness of the cleanup approach, the creation or preservation of affordable and/or moderately priced market-rate housing, the creation of economic development, and the readiness of the project to proceed.

The spring 2022 ERF award recommendations are summarized as follows and are described in detail in the report, Environmental Response Fund Spring 2022 Funding Recommendations.

ERF Projects: 

• 3030 Nicollet, Minneapolis - $48,454 for vapor mitigation associated with the development of 109 units of affordable housing and commercial space. (Grantee: City of Minneapolis on behalf of PPL Nic Lake LLC)
• 325 Blake Road Project, Hopkins - $285,457 for soil cleanup costs associated with the development of 186 affordable units, 614 market rate units, and commercial space. This project includes a regional stormwater facility. (Grantee: Minnehaha Creek Watershed District)
• Calvary Apartments, Minneapolis - $879,428 for asbestos and lead-based paint abatement costs associated with renovation of existing buildings and construction of 41 units of affordable housing. (Grantee: City of Minneapolis on behalf of Trellis Company)
• Debre Selam Medhanealem Ethiopian Orthodox Tewahedo Church Site, Minneapolis  - $572,800 for soil cleanup and vapor mitigation costs associated with the development of a church. (Grantee: Debre Selam Medhanealem Ethiopian Orthodox Tewahedo Church)
• Northrup King Residential, Minneapolis - $140,644 for soil cleanup and vapor mitigation costs associated with renovation of a vacant building into 84 units of affordable housing for artists and 8,120 square feet of commercial space. (Grantee: City of Minneapolis on behalf of Artspace Projects, Inc)
• Northstar, Minneapolis - $106,539 for asbestos and lead-paint abatement costs associated with renovation of existing buildings to create 44 units of affordable housing and 173 units of market-rate housing. (Grantee: City of Minneapolis on behalf of NS Propco East Office LLC and Sherman Associates Development LLC)
• Rogers Main Street Redevelopment Project, Rogers - $286,700 for soil cleanup and asbestos abatement costs associated with construction of 40 units of affordable, senior housing. (Grantee: City of Rogers on behalf of Duffy Development Company, Inc)
• Simpson Community Shelter and Apartments, Minneapolis - $219,369 for soil cleanup, asbestos and lead-paint abatement, and vapor mitigation costs associated with construction of 42 units of affordable housing and an emergency shelter for people experiencing homelessness. (Grantee: City of Minneapolis on behalf of Project for Pride in Living, Inc. as developer for Simpson Housing Services, Inc.)
• Upper Harbor Terminal, Minneapolis - $743,482 for soil cleanup costs associated with construction of a new, 20-acre riverfront park. (Grantee: City of Minneapolis)
• Vista 44, Hopkins - $105,000 for soil cleanup and vapor mitigation costs associated with construction of 50 units of permanent supportive housing for low-income families and people experiencing serious and persistent mental illness.  (Grantee: Vista 44 LLC)
• Wooddale Avenue Apartments, St. Louis Park - $184,325 for soil cleanup, vapor mitigation and asbestos and lead-based paint abatement costs associated with the development of 114 units of affordable housing. (Grantee: St. Louis Park Economic Development Authority on behalf of St. Louis Park AH I, LLLP)
• Wooddale Station Redevelopment, St. Louis Park - $239,000 for soil cleanup and vapor mitigation costs associated with the construction of 65 units of affordable housing, 250 units of market-rate housing, and 13,000 square feet of commercial space. (Grantee: City of St. Louis Park Economic Development Authority on behalf of Wooddale Station, LLC)

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 recommended ERF grant awards will fund asbestos and lead-paint abatement, soil cleanup, and soil vapor mitigation. The grants will also assist developments that increase the tax base, create permanent jobs, enhance green space, and create affordable housing. The recommended grants provide for the renovation or construction of 775 affordable housing units, almost half of which have rental rates at 50% Area Median Income (AMI) or less, and of which, 169 units have rental rates at or below 30% AMI. 

ERF grants reduce environmental contamination and support projects in communities with disparities in health, housing, employment, and income by providing critical funding for cleanup of environmental contamination associated with the renovation or development of affordable housing and community spaces and ultimately reduces housing costs and supports job creation.

Many ERF grants address environmental contamination in communities with significant disparities in health, including low-income areas and communities of color. Some of these sites become a catalyst for new development in neighboring areas, which can further help address racial disparities in housing, employment, and income.