After years of political head-cutting, the city of Arden Hills has agreed on common terms with Alatus, the master developer behind the sprawling Rice Creek Commons project. That still leaves Ramsay County, the landlord, to weigh in.
The master plan for the long-stalled development – located on the former site of the long-vacated Twin Cities Army Ammunition Plant, or TCAAP – envisages construction on 320 acres of developable land, of which about 50 percent will be commercial and 50 percent will be commercially available. Percentage will be residential.
This would be equivalent to 1,460 units of residential housing, including 326 units of designated affordable housing. Of those affordable units, 20 percent will be in owner possession under the new terms.
Alatus will also develop three new city parks within Rice Creek Commons at the developer’s expense. To reduce costs and liabilities for Arden Hills, the developer will cover costs for a new water tower and utilities, and will put in $17 million in tax increase funding – or “TIF” revenue generated from property taxes on the site. – Towards various infrastructure, including parking.
“It’s a big, big project, and it could be a real asset to the Northeast Metro,” Arden Hills Mayor David Grant said in an interview Tuesday. “It provides an opportunity to the developer to start with a clean slate. There is nothing on the property. The developer has the opportunity to build a (virtual) city without the pre-existing development constraints. And this has come at a time when people are looking for accommodation.”
Grant said affordable housing was always a question — how much and what type.
“TIF wasn’t on the table before that I’m aware of,” he said. “The developer will finance the city’s water tower and trunk utilities, and the city will pay the developer back from the trunk connection fee as development proceeds. If the project must stall, the developer is the one who is funding that component. There is a major risk reduction for the city, bearing in mind that the Arden Hills city is 10,000 people, so we are a relatively small town.
Ramsey County officials said Tuesday they have yet to see the new settlement, which follows a two-year litigation between the city and county.
“I can’t even comment on it,” said Ramsey County Commissioner Trista Matascastillo in a brief interview. “We have more questions than answers. They didn’t talk to us ahead of time. We have to look at the entire proposal, but we don’t have it yet.”
The city’s joint powers agreement with Ramsey County to develop 427 acres of additional military land dates back to 2012. Paul and potentially an area more populous than most Minnesota cities, turned sour in 2018 when the city and county were concerned about the amount of housing to be built on the site as well as infrastructure finance. Could not come in terms of nutrition. The disagreement ended in Ramsey County District Court.
In 2019, the county attempted to dissolve its partnership with Arden Hills, which was rejected by the court.
“The county sued the city, and the city won, and then the county said in July 2021 that the city, if it so chose, could negotiate with the developer,” Grant said. “We took the initiative to do so. The term sheet represents an agreement between the city and the developer. This is just a term sheet… but at this point we hope the county is ready and able to pursue this project. They are still landlords.”
In a written statement issued by the city, general terms agreed by Arden Hills and Alatus include:
- $17 million in tax increase financing.
- A $5 million water tower and $3.5 million of water and sewer utilities will be covered by the developer and reimbursed through customer fees.
- Alatus has also agreed to fund the city’s losses on the project during the first five years, if the revenue is not enough to cover the expenditure.
In addition, the developer will reimburse the city for planning costs of $1 million already incurred. The developer has also agreed, at his own cost, to build three new city parks and convert them into downtown, at an estimated cost of $14.5 million. Of the 326 affordable units, 180 units are planned to be affordable for Ramsey County for 50 percent and 60 percent of the area’s median income.
One thing that has not changed is the overall density on the site, which will be 1,460 housing units. Ramsey County officials had long called more than 1,700 housing units. That conversation will now move forward between Alatus and the county.
“Instead of having three parties on the table, there are now two parties, because the city and the developer have reached an agreement,” Grant said.