Consider EDA Participation in Sunwood Realignment Property Acquisition/Redevelopment

Improvement Project 12-20, Sunwood Drive Realignment, has been a key project on the Ramsey City Council agenda for the past six to eight months. Four major objectives of this project have been identified in various grant applications and in the progression of plans for the Sunwood Realignment; they are as follows:

• Increasing safety to the traveling public by increasing spacing between turning movements on Armstrong Boulevard, the rail road tracks, and US10
• Making progress toward the completion of the TH 10 interchange at Armstrong Boulevard by completing this segment of the project (similar to the Bunker/Armstrong segment and Riverdale segment)
• Improving access conditions to the COR and the new Ramsey Station on the Northstar Commuter Rail by providing a signalized access on Armstrong Boulevard at its final location after the Armstrong Interchange is constructed
• Expanding the infrastructure in the COR to create salable lots in westerly portion of the project

Additionally, this project was listed as the top priority in the transportation section of the City Council's 2012 strategic goals and involved land acquisition on the west side of Armstrong Boulevard.

Council and HRA actions in progressing this project include the authorization of a feasibility study in June of 2011 and ordering of plans and specifications in January of 2012. Grant applications have been submitted to both the Metropolitan Council and MNDot for funding of this key transportation improvement. Staff was notified on Thursday, February 23rd that $500,000 in funding was awarded to this project by MNDot as a part of the Local Road Improvement Program (LRIP). Awards for the Metropolitan Council TOD grants will be known by May of 2012. Staff would like to review with Council this evening the proposed financing plan for the Sunwood Realignment project, a spreadsheet is attached for Council reference.

At its December 13, 2011 regular meeting, the HRA authorized appraisals on three parcels west of Armstrong Boulevard. Appraisals have been completed on the three parcels and negotiations are underway with the various property owners (NDS Properties, LLC; USCO Corporation; M & W Holding Company, LLC).

Staff has held numerous meetings with WSB (design engineer) to discuss the potential access and alignment issues with regard to the Sunwood Realignment as a preliminary phase of the Armstrong Interchange. With the widening of the road and a new signalized intersection at what is roughly 147th Avenue, the City will likely require the taking of property on the west side of the road (See attached map showing the three phases of improvements to Armstrong Blvd.). The outcome of the acquisition discussion may influence the final design of each project. 

The estimated costs for undertaking Sunwood Drive Realignment are approximately $5,350,000. This includes $3.1 million for road construction and about $2.35 million for land acquisition. City staff have met and considered various options for funding the total project (See attached funding scenarios). Several of the funding sources are solid and committed (the Anoka County $1.7 million, LRIP Grant $500,000, TIF District 2 $500,000). The $1.25 million TOD Met Council Grant is currently being considered. The City Council is seeking input from the EDA regarding the use of existing EDA funds that could be used for the Sunwood Realignment Project. An amount of $900,000 was discussed at the February 28th City Council meeting. The EDA will need to consider other potential uses of the Fund and what level it feels is appropriate to spend. Other City funding sources that could be tapped for Sunwood Realignment are Water Main and Storm Sewer Improvement funds (roughly $400,000).

The Ramsey EDA has the ability to buy and sell property.  The EDA has the authority to redevelop property (See attached EDA-HRA comparison).  The EDA Fund can be utilized to acquire land and/or buildings.  The current balance in the fund is approximately $1.2 million.  This fund is used for EDA operations, professional services, grants and loans to businesses, and to replenish the City's RLF Program.  Based upon current obligations, the EDA Fund could be used for land acquisition along Armstrong Boulevard as part of the Sunwood Realignment Project.

Given current financial obligations, City staff recommends the EDA consider financial participation in the land acquisition piece of the proposed Sunwood Realignment Project.  It is recommended that this participation not exceed 50% of the current available fund balance (or $600,000), that the EDA funds be used specifically for the largest possible portion of the land located of the corner lot at 8020 147th Avenue NW and that is owned by NDS Properties, LLC, that the EDA reserves the right to demolish any structure currently on site to make the site shovel-ready, and that any sale proceeds from said land be used to replenish the EDA Fund. 

EDA recognizes that this property investment may be a long-term hold depending on funding for the Armstrong Interchange and retail development on the east side of Armstrong Blvd.

The Ramsey EDA recommends to the City Council that EDA funds are utilized in the land acquisition piece of the proposed Sunwood Realignment Project. It is recommended that this participation not exceed 50% of the current available fund balance (or $600,000), that the EDA funds be used specifically for the largest possible portion of the land located of the corner lot at 8020 147th Avenue NW and that is owned by NDS Properties, LLC, that the EDA reserves the right to demolish any structure currently on site to make the site shovel-ready, and that any sale proceeds from said land be used to replenish the EDA Fund.