BE IT RESOLVED, that the County Administrator be authorized to negotiate Environmental Response Fund grant agreements with the following cities for the assessment and cleanup of contaminated sites, during a two-year period beginning on the date of execution:

• Agreement  PR00000440 with the City of Minneapolis, with the amount not to exceed $85,000;

• Agreement PR00000441 with the City of Maple Grove, with the amount not to exceed $27,723;

• Agreement PR00000442 with the City of Minneapolis, with the amount not to exceed $249,480;

• Agreement PR00000443 with the City of Saint Anthony Village, with the amount not to exceed $44,400;

• Agreement PR00000444 with the City of Minneapolis, with the amount not to exceed $153,654; and

BE IT FURTHER RESOLVED, that following review and approval by the County Attorney's Office, the County Administrator be authorized to sign the agreements on behalf of the county; that costs incurred by the grantees after the board approval date be eligible for reimbursement upon execution of the agreements; that the County Administrator be authorized to approve one 12-month extension of the agreements; and that the Controller be authorized to disburse funds as directed; and

BE IT FURTHER RESOLVED, that the reallocation of fall 2013 Environmental Response Fund grant funding to Agreement PR00000445 with Seward Redesign, Inc. or affiliated entity for abatement, demolition, and contaminated soil cleanup during the period July 24, 2018 through July 24, 2020, with the not-to-exceed amount of $110,000, be approved for the Seward Commons Redevelopment project site in Minneapolis; that following review and approval by the County Attorney’s Office, the County Administrator be authorized to sign the agreement on behalf of the county; that costs incurred by the grantee after the board approval date be eligible for reimbursement upon execution of the grant agreement; and that the Controller be authorized to disburse funds as directed.

History: The Environmental Response Fund (ERF) grants fund assessment and cleanup of sites where conditions present a threat to human health or the environment and where a lack of funding for the added environmental costs hinders site improvements or redevelopment.

Minnesota Statutes, sections 383B.80 and 383B.81 authorize the county to collect a mortgage registry and deed tax for the assessment and cleanup of contaminated sites. The board established the ERF in 1997 (Resolution 97-06-410R1) and adopted the grant program in 2001 (Resolution 01-09-615).

Since November 2001, 32 grant cycles have been completed. Through the ERF program, 380 grants, including 15 emergency grants, have been awarded for a total of $53,407,047.

The Seward Commons Redevelopment project is the third phase of a redevelopment project located near the intersection of Franklin Avenue and Hiawatha Avenue in Minneapolis. Previous phases are complete and include a total of 100 housing units, including permanent housing for individuals with persistent mental illness and other health concerns, and affordable housing for seniors. The board originally approved the award of a fall 2013 ERF grant for this project not to exceed $110,000 to the City of Minneapolis on behalf of Seward Commons, LLC for abatement, demolition, and contaminated soil cleanup to complete development of market-rate housing necessary to support the previous affordable housing phases of the project. Agreement A132378 with the City of Minneapolis for this project was not executed until July 2016 due to development delays. To date, no funds have been disbursed from the ERF for this project. Hennepin County’s Transit Oriented Development program has authorized extension of the project’s commencement date for the forgivable loan awarded to this project to December 31, 2019. In order to provide continued support for the project, the reallocation of the ERF grant to Seward Redesign, Inc. and the new July 24, 2018 through July 24, 2020 grant terms are proposed.

Current Request: This request is for County Administrator authorization to negotiate five ERF grant agreements during various contract dates, with the total combined amount not to exceed $560,257.

In April 2018, the county solicited proposals from municipalities and nonprofit and for-profit developers. In an effort 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 recommend funding five of the 16 project applications received. 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 spring 2018 ERF award recommendations are summarized as follows and are described in detail in the report, “Hennepin County Environmental Response Fund Spring 2018 Funding Recommendations.”

ERF Projects:

• 36 Bryant, Minneapolis - $85,000 for contaminated soil cleanup and soil gas vapor mitigation associated with the construction of a four-story, multifamily housing apartment project comprising of 38 market-rate micro units and three two-bedroom apartments. (Contractor: City of Minneapolis)

• 13250 Grove Drive Redevelopment, Maple Grove - $27,723 for contaminated soil cleanup and soil gas vapor mitigation associated with the construction of a slab-on-grade retail building. (Contractor: City of Maple Grove)

• Calhoun Towers, Minneapolis - $249,480 for contaminated soil cleanup associated with the construction of 242 market-rate apartment units in phase 1 of the project.  Subsequent phases of this four-phase project will include significant affordable housing components. (Contractor: City of Minneapolis)

• Southern Gateway Redevelopment, St. Anthony Village - $44,400 for contaminated soil cleanup and soil gas vapor mitigation associated with the construction of 79 affordable, 189 senior assisted living, and 146 market-rate apartment units. (Contractor: City of St. Anthony Village)

• West Broadway Curve, Minneapolis - $153,654 for additional investigation, contaminated soil cleanup, and soil gas vapor mitigation associated with the construction of 54 affordable apartments and 35 market-rate apartments and rental townhomes. (Contractor: City of Minneapolis)

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.

This request is also for County Administrator authorization to reallocate fall 2013 ERF grant funds and to negotiate ERF Agreement PR00000445 with Seward Redesign, Inc. or affiliated entity for the Seward Commons Redevelopment project for the period beginning July 24, 2018 through July 24, 2020 with the amount not to exceed $110,000 for abatement, demolition, and contaminated soil cleanup. This will allow for the construction of market-rate housing necessary to support the previous affordable housing phases of the project. This request is for approval for Seward Redesign, Inc. or affiliated entity to incur costs after the board approval date, with reimbursements being paid upon the execution of the grant agreement.

Impact/Outcome: The recommended ERF grant awards will fund contaminated soil assessment and cleanup and soil gas vapor mitigation. This funding supports projects that create economic development by increasing the tax base; creating permanent jobs; and creating market-rate, affordable, and senior housing. The recommended grants provide for the construction of an estimated 786 housing units. Many ERF grants address environmental contamination in communities of low-income and color where health disparities exist. 

The authorization of ERF Grant Agreement PR00000445 with Seward Redesign, Inc. or affiliated entity, will support the completion of a phased affordable and market-rate redevelopment project in Minneapolis.