Discuss Property Acquisition Related to the Realignment of Sunwood Drive - PORTIONS OF THIS CASE MAY BE CLOSED TO THE PUBLIC

The City has been discussing the realignment of Sunwood Drive since last summer, in an effort to preconstruct portions of the Armstrong Boulevard/TH 10 grade separated interchange.  The project includes the realignment of Sunwood Drive, between approximately Zeolite Street and Armstrong Boulevard (see attached preliminary design).  The intent is to work north to south on Armstrong Boulevard and complete another section of the roadway in its final location; to set the stage for the ultimate interchange over the railroad tracks and TH 10.  Constructing this improvement now would improve traffic flow through the area in the short term, create a consolidated signalized access to the COR along its western boundary, reduce overall interchange costs, provide for a portion of the City's cost participation in the interchange project, and create additional development options for the COR property.

Draft feasibility studies were presented to the Public Works Committee and HRA on December 13, 2011, with the only remaining outstanding item being the funding package.  On that date the HRA authorized the preparation of appraisals for the potential acquisition of 3 parcels along the west side of Armstrong Boulevard that are necessary for portions of this project, and ultimately the interchange project.

On January 24, 2012 draft feasibility studies were presented to the City Council for consideration.  At that meeting the City Council authorized the final design contracts with Landform and WSB & Associates, and ordered the preparation of plans and specifications.  Since the final funding package for the project was incomplete, due to required acquisitions and pending grant applications, Council prioritized a funding scenario that would utilize grant money first, and if they are unavailable a secondary package was developed with alternative sources identified below.

On February 28, 2012 the City Council was updated on this project, and additional discussions took place with respect to the required property acquisitions south of 147th Avenue NW.  Appraisals have been completed on these 3 parcels and negotiations are underway with the various property owners.  At the regular meeting of February 14, 2012, Council and the HRA passed a resolution that outlined the process for negotiations with one of the parcel owners, M & W Holdings LLC - Mr. Jeff Wise, a seated member of Council, HRA and the EDA.

At the February 28th meeting staff and the City Council outlined an updated funding package for the project, which included the following additional funding sources:

• The recently received Local Road Improvement Program (LRIP) grant in an amount up to $500,000
• TIF #2
• Equipment Revolving Fund
• Excess Rail funds
• EDA, which approved up to $600,000 at their meeting on March 8th
• Metropolitan Council Transit Oriented Development (TOD) grant, which should be known by the end of April

Staff has held numerous meetings with the design consultants WSB to discuss the potential access and alignment issues with regard to the Sunwood realignment as a preliminary phase of the Armstrong Interchange.  Council may recall that there are slight differences in the final alignment of Armstrong Boulevard between these projects, and the outcome of the acquisition discussion may influence the final design of each project.

Additional strip takings are also required north of 147th Avenue NW for the construction of Armstrong Boulevard in its final location (see attached map), and staff is looking for Council direction on formulating an offer to the property owners.  Additional information will be provided at the meeting outlining the potential costs and initial offer for these acquisitions.

Staff is looking for direction on formulating an offer for the required permanent easements north of 147th Avenue NW, along the west side of Armstrong Boulevard and is recommending the approval of the attached financing package.

A couple of updated funding scenarios for the Sunwood realignment project are attached to this case for Council consideration, and they are based upon previous discussions and direction received to date.