History: Resolution 17-HCRRA-0048 by the Hennepin County Regional Railroad Authority (HCRRA) declared the property at 3421 Lake Street West in the City of Minneapolis surplus and authorized the transfer of the property to the Hennepin County Housing and Redevelopment Authority (HCHRA) subject to temporary and permanent easements for the benefit of the Southwest Light Rail Transit (LRT) Project, and for transportation infrastructure associated with the Midtown Greenway.

Cooperative Agreement A177963 with the City of Minneapolis enables the HCHRA to undertake certain redevelopment and disposition activities pursuant to Minnesota State Statutes. The Minneapolis City Council will consider approval on December 8, 2017.

The adjacent property owner, an entity affiliated with Calhoun Development, LLC, has expressed interest in acquiring the HCRRA/HCHRA site for redevelopment consistent with the City of Minneapolis Lake Calhoun Residences Redevelopment Plan. Combined with a 4.62 acre property currently owned by the developer, the site creates an assemblage that would retain existing housing and create up to 500 new units, including units affordable to residents at 50% of area median income.

The proposed phased development aligns with the area’s established redevelopment plan, and fulfills objectives identified in the Southwest Transitional Station Area Action Plans (TSAAPs) and the Southwest Corridor Housing Strategy, and is consistent with Hennepin County’s affordable housing and transit-oriented development objectives. The proposed development requires realignment of 31st Street West as depicted in Exhibit A. Authority to grant a street easement in favor of the City of Minneapolis is also part of the current action request. Design and construction costs of the realigned city street and removal/relocation of utilities will be reimbursed by the developer as part of the proposed property conveyance, and will require additional Subordinate Funding Agreements between Hennepin County and the Metropolitan Council.

Following a hearing on December 6, 2017, at 9:30 a.m., the HCHRA Board will consider final conveyance to Calhoun Development, LLC, or affiliated entity, on December 12, 2017. Anticipated terms of conveyance to the developer include a fair market purchase price of approximately $3 million; reimbursement of costs associated with design and construction of the realigned city street and removal/relocation of utilities in the amount not to exceed $595,000; and requirements for long-term housing affordability. Portions of the properties will be subject to a temporary construction easement for the benefit of the Southwest LRT project; a permanent easement for 31st Street West for the benefit of the City of Minneapolis; and a permanent easement for the Midtown Greenway for the benefit of the HCRRA; all of which will be accounted for in the conveyance documents.

Proceeds from the sale of surplus HCRRA property are generally returned to that authority, less payment of HCHRA costs associated with redevelopment, holding, and transaction costs.

Current Request: Accept a transfer of surplus property located at 3421 Lake Street West (PID: 05-028-24-21-0243) in the City of Minneapolis from the HCRRA; authorize the negotiation of Cooperative Agreement A177963 with the City of Minneapolis to further redevelopment and disposition activities; authorize an easement in favor of the City of Minneapolis for 31st Street West; and establish a public hearing on December 6, 2017 for the purpose of public comment on the proposed conveyance of this property to Calhoun Development, LLC, or affiliated entity.

Impact/Outcomes: Disposition of surplus HCRRA/HCHRA property will increase the tax base and supply of housing affordable to a mix of incomes.