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AGENDA RECOMMENDATION |
Item No: 4.1.
Economic Development Authority
- Meeting Date:
- 04/14/2025
Agenda Item:
Resolution accepting feasibility report and ordering project for Capital Improvement Project 11139; Orness Plaza Heat Pumps Phase 3.
Recommendation/Action(s):
Adoption of the attached resolution.
Summary:
Orness Plaza was originally constructed in 1971 with a major renovation taking place in 2011 and 2012. As part of the renovations, energy-efficient heating, ventilation, and air conditioning components were installed for energy conservation. Components included geothermal wells located throughout the grounds, redesigned controls for the existing rooftop HVAC units, and individual heat pumps within each unit. Orness contains 114 individual heat pump units throughout the building, including all 101 residential units and common spaces utilized by the residents as well as staff areas that equate to 13 units.
Phase 1 of the project replaced 69 of the 114 units that are present at Orness Plaza; units replaced during this phase were exclusively residential units. Phase 2 of the project replaced the remaining 32 residential units and 5 units that serve common areas in the building. Staff have done extensive research to determine the cause of the failure and, unfortunately, the nature of how the heat pump works reduces the lifespan of the equipment to less than that of a normal household furnace. On average, a heat pump in this configuration can last between 10–15 years, with an average household furnace lasting between 15–20 years.
Suggested improvements in this final phase include the replacement of eight remaining heat pump units that reside in the ceilings of offices and common areas that were installed in conjunction with the remodel in 2011. Removal, salvage, and replacement of ceiling tiles and grid will be required to complete the installation of the remaining units. This phase of the project will complete the replacement of all heat pumps original to the remodel project in 2011. Phase 3 of the project is proposed to be funded by the 2025 City of Mankato EDA Housing Capital Budget; the approved budget for the project is $120,000. The estimated cost of the necessary improvements is $118,800. The recommended improvements to Orness Plaza are being proposed for the summer or fall of 2025, depending upon lead times for the new equipment.
The estimated costs and funding sources for the project are as follows:
Staff recommends the Economic Development Authority accept the project feasibility report, order city staff to prepare final plans and specifications, and instruct the Executive Director to advertise for bids in accordance with the requirements of law.
Phase 1 of the project replaced 69 of the 114 units that are present at Orness Plaza; units replaced during this phase were exclusively residential units. Phase 2 of the project replaced the remaining 32 residential units and 5 units that serve common areas in the building. Staff have done extensive research to determine the cause of the failure and, unfortunately, the nature of how the heat pump works reduces the lifespan of the equipment to less than that of a normal household furnace. On average, a heat pump in this configuration can last between 10–15 years, with an average household furnace lasting between 15–20 years.
Suggested improvements in this final phase include the replacement of eight remaining heat pump units that reside in the ceilings of offices and common areas that were installed in conjunction with the remodel in 2011. Removal, salvage, and replacement of ceiling tiles and grid will be required to complete the installation of the remaining units. This phase of the project will complete the replacement of all heat pumps original to the remodel project in 2011. Phase 3 of the project is proposed to be funded by the 2025 City of Mankato EDA Housing Capital Budget; the approved budget for the project is $120,000. The estimated cost of the necessary improvements is $118,800. The recommended improvements to Orness Plaza are being proposed for the summer or fall of 2025, depending upon lead times for the new equipment.
The estimated costs and funding sources for the project are as follows:
| ITEM | COST |
| Rem./Repl. Heat Pumps | $108,000.00 |
| TOTAL CONSTRUCTION | $108,000.00 |
| Construction Contingency | $10,800.00 |
| TOTAL PROJECT COST | $118,800.00 |
| FUNDING SOURCE | AMOUNT | PERCENT |
| 2025 Housing Capital Fund | $118,800.00 | 100% |
| TOTAL FUNDS | $118,800.00 | 100% |
Staff recommends the Economic Development Authority accept the project feasibility report, order city staff to prepare final plans and specifications, and instruct the Executive Director to advertise for bids in accordance with the requirements of law.