IV.5. Joint Cooperative Agreement with City of Minnetonka and the Metropolitan Council; ElverumOctober 20, 2020 Council Report 2020-081
JOINT COOPERATIVE AGREEMENT WITH THE CITY OF MINNETONKA AND THE
METROPOLITAN COUNCIL
Proposed Action
Staff recommends adoption of the following motion: Move to approve the Joint Cooperative
Agreement with the City of Minnetonka and Metropolitan Council related to Shady Oak South
Pond.
With this motion, the agreement will be executed.
Overview
The Shady Oak LRT Station is located on the border of Hopkins and Minnetonka. Today the
area is made up of a variety of properties, with industrial and low-density development
prominent. The area is poised for redevelopment from a market perspective, but underlying
conditions make it difficult. The two cities have come together with a shared redevelopment
vision and feel it is important to realize a more active station area for both economic and
safety reasons.
Throughout the course of designing the Shady Oak LRT Station, staff has attempted to
preserve and incentivize redevelopment opportunity within the area. Towards that goal, a
design that moves the storm water treatment area away from the immediate station area and
adds capacity for regional storm water treatment has been developed. The cost of
infrastructure that benefits private development cannot be paid for by the SW LRT project
and must be paid for by the benefiting cities.
Most of the benefiting regional treatment occurs within the City of Minnetonka so in an effort
to simplify the contractual obligations to the Met Council for the change in project scope,
Minnetonka has agreed to front the cost of the change order. Hopkins will reimburse
Minnetonka as development occurs.
Primary Issues to Consider
• What is the background to this agreement?
• What are the terms of the agreement?
Supporting Information
• Joint Cooperative Agreement Regarding Shady Oak South Pond
• Maps: Project Contributing Area and Private Contributing Area
___________________________
Kersten Elverum
Director of Planning & Development
Financial Impact: $__0__________Budgeted: Y/N ____ Source: ________________
Related Documents (CIP, ERP, etc.): _______________________________________
Notes: _______________________________________________________________
Council Report 2020-081
Page 2
Analysis of the Issues
• What is the background to this agreement?
In 2017, staff began negotiations with the Metropolitan Council’s Southwest Project Office
(SPO) regarding a proposed storm water management pond for the Shady Oak Station area.
The initial plan for the station placed the storm water management pond in the center of the
proposed redevelopment area that was identified in the Shady Oak Redevelopment Strategy,
adopted by Hopkins and Minnetonka in 2016.
Minnetonka and Hopkins staff met with the SPO to discuss moving the pond to another area
that would be less impactful on redevelopment for Minnetonka and Hopkins. The SPO
determined it was able to move the treatment pond to the area south of the platform, near the
proposed Rail Support Facility, if the cities would be willing to contribute to the cost of
constructing an elliptical pipe to the new pond to serve approximately 11.2 acres within the
Shady Oak Station redevelopment area (development contributing area). The development
contributing area that is located within Hopkins is currently owned by the Met Council but
intended for future development. See the attached exhibit depicting the 11.2 acre area.
• What are the terms of the agreement?
Under the proposed Joint Cooperative Agreement, the cities would share in the cost of
upgrading the storm water pipe ($146,988.28) based upon the storm water benefit that each
city would receive with the upgraded pipe (roughly 65% in Minnetonka and 35% in Hopkins.)
The basic premise of the agreement is that Minnetonka would pay for the initial cost to
upgrade the pipe and Hopkins would repay Minnetonka, proportionately, as redevelopment
occurs. It would be the City’s intention to charge a development fee to offset our cost.
If no development occurs in Hopkins or if development in Minnetonka claims all of the benefit,
Hopkins obligation to reimburse Minnetonka expires in 30 years after the determination of
excess capacity.
If approved, the cities will work with developers proposing new redevelopment projects in the
Shady Oak Station area to utilize the available regional storm water treatment. The upsizing
of the pipe allows redevelopment projects to access a more cost-effective method of treating
storm water at the site. For example, the Birke, a 175-unit apartment building currently under
construction in Minnetonka, must treat storm water on-site in an underground storage
system. The cost to build the storage tank for this size of a project is approximately $450,000.
If a similar project were proposed in the 11.2-acre area served by this agreement, the
developer would pay the city roughly $34,450 for the treatment of a 2.5-acre site.
Alternatives
The City Council has the following options for this item:
• Elect to approve the agreement as drafted.
• Modify agreement and approve.
• Continue for more information.
• Elect not to enter into the agreement.
JOINT COOPERATIVE AGREEMENT REGARDING
SHADY OAK SOUTH POND
This Joint Cooperative Agreement (Agreement) is made by and among METROPOLITAN
COUNCIL, a political subdivision of the State of Minnesota (Council), CITY OF HOPKINS, a
Minnesota municipal corporation (Hopkins) and CITY OF MINNETONKA, a Minnesota
municipal corporation (Minnetonka). This Agreement pertains to the Council’s proposed Shady
Oak South Pond (Pond), to be constructed as part of Council’s Southwest Light Rail Transit
(SWLRT) Project, referred to hereinafter as the “Project.”
Recitals and Statement of Purpose
A. Council has undertaken the Project, an approximately 16-mile extension of the METRO
Green Line which will operate from downtown Minneapolis through the cities of St. Louis Park,
Hopkins, Minnetonka and Eden Prairie.
B. Council has obtained a permit from Nine Mile Creek Watershed District (NMCWD),
permit no. 2016-88 (Permit), for the portions of the Project that lie within the boundaries of
NMCWD. Council has entered into a Maintenance Agreement with NMCWD dated November
15, 2017, Metropolitan Contract No. 171041, as amended, regarding the Council’s obligations to
maintain wetland buffer, stormwater management facilities and waterbody crossings for the
Project, pursuant to NMCWD permit no. 2016-88 (Maintenance Agreement).
C. For purposes of this Agreement, the term “Permitted Facilities” refers to all stormwater
management facilities covered by the Permit.
D. One of the Permitted Facilities is a proposed stormwater pond on real property located at
610 16th Avenue South in the city of Hopkins, adjacent to the station known as the Shady Oak
Station (the “Pond”). The proposed location of the Pond is depicted on Attachment 2.
E. The Pond will provide stormwater treatment for approximately 23.7 acres of land currently
owned by Council (the “Project Contributing Area”). The original plans for the Project call for the
installation of a 60-inch pipe to convey stormwater from the Project Contributing Area to the Pond.
The Project Contributing Area is depicted in Attachment 1.
F. Council has estimated that the Pond and SWLRT project will have more capacity than will
be necessary to meet NMCWD’s permitting requirements (with respect to rate, and retention) for
the Project Contributing Area (“Excess Capacity”), presuming redevelopment of the Development
Contributing Area (as defined below) in a manner that results in 80 percent impervious cover. A
specific quantity of stormwater volume retention for the Development Contributing Area is not
required because the NMCWD engineer has concurred in the determination that the Development
Contributing Area is “restricted,” for purposes of application of the NMCWD Stormwater
Management Rule. The specific amount of Excess Capacity cannot be determined until the
Permitted Facilities have been constructed and field verified, because infiltration rates must be
determined based on post-construction conditions. The designed Excess Capacity is expected to
be sufficient to provide for required rate control and water-quality treatment for the approximately
11.2-acre area located within the cities of Minnetonka and Hopkins (the “Development
Contributing Area”), that could potentially use the Pond to satisfy NMCWD stormwater-
management criteria for redevelopment in the Development Contributing Area. The Development
Contributing Area is depicted in Attachment 2. The Development Contributing Area that is located
within Hopkins is currently owned by the Council but is intended for future development.
G. The originally-planned 60-inch stormwater pipe is not adequate to serve both the Project
Contributing Area and the Development Contributing Area. Council has determined that a 58-inch
by 91-inch horizontal elliptical pipe (Elliptical Pipe) is necessary to serve both the Development
Contributing Area and the Project Contributing Area.
H. Council has negotiated a change order to the Project contract, to provide for the
construction of the Elliptical Pipe in lieu of the 60-inch stormwater pipe, at an additional cost of
$146,988.28 (“Added Cost”).
I. Council, Hopkins and Minnetonka desire to enter into this Agreement in order to address
ownership and related responsibilities for the Pond and Elliptical Pipe, payment of the Added
Costs, and allocation of Excess Capacity in the Pond.
Terms of Agreement
1. Recitals incorporated. The recitals above are incorporated into this Agreement by
reference.
2. Ownership and Maintenance Responsibilities. Council shall be the owner of the Pond and
the Elliptical Pipe. Council represents to and agrees with Hopkins and Minnetonka that Council
shall be solely responsible for the construction, operation, maintenance, repair and replacement of
the Pond and Elliptical Pipe. Council will at all times comply with the requirements of NMCWD
permit no. 2016-88 and the Maintenance Agreement with respect to the Pond and Elliptical Pipe.
Council agrees that it will allow future connections to the Elliptical Pipe, as allowed per paragraph
5.b. herein and any other applicable requirement under this Agreement, by owners of property
within the Development Contributing Area, at no cost, charge, fee or assessment to the connecting
property owner or to Hopkins or Minnetonka.
3. Added Costs; Minnetonka’s Payment to Council. Minnetonka agrees to pay the Added
Costs to Council as provided in that certain Subordinate Funding Agreement (Council No.
14I067G) by and between the Council and the City, approved contemporaneously with Council
and Minnetonka’s approval of this Agreement.
4. Determination of Excess Capacity. The exact Excess Capacity of the Pond cannot be
determined until the Pond is constructed and as-built drawings are completed. The parties
understand and agree that whether Excess Capacity exists and the amount of Excess Capacity that
exists cannot be determined until completion of construction. After construction is completed,
Council agrees to determine the amount of Excess Capacity of the Pond and to submit
documentation of its analysis and determination to NMCWD for review and concurrence. Council
agrees to use due diligence to obtain the NMCWD’s concurrence in Council’s determination of
Excess Capacity and agrees to provide Hopkins and Minnetonka of all documentation submitted
to NMCWD.
5. Allocation of Excess Capacity. With respect to future use of Excess Capacity, the parties
agree as follows:
a. Council agrees to make any and all Excess Capacity available to Hopkins and
Minnetonka, collectively, for use by properties within the Development
Contributing Area (as that area is determined under paragraph 4 above).
b. Properties within the Development Contributing Area may submit applications for
land use approval to the local zoning authority (Hopkins or Minnetonka, as
appropriate) and, as part of those applications, may request connection to the
Elliptical Pipe. Any connection to the Elliptical Pipe will also require an application
to NMCWD for a permit.
c. Nothing in this Agreement creates any rights in favor of any person or entity that is
not a party to this Agreement; specifically, this Agreement does not entitle any
owner of property within the Development Contributing Area to connect to the
Elliptical Pipe or to enforce any provision of this Agreement.
d. Nothing in this Agreement entitles either Hopkins or Minnetonka individually to
any specified portion of the Excess Capacity. Hopkins and Minnetonka understand
and agree they will consider applications for connection to the Elliptical Pipe on a
first-come-first served basis, as development proposals are submitted and in
accordance with the following process: When an application is submitted to either
city for the development or redevelopment of a property within the Development
Contributing Area, the city receiving the application will notify the other city that
the application is pending. The cities will mutually develop and share a spreadsheet
that maintains a running balance of Excess Capacity as originally determined under
paragraph 4 above, minus Excess Capacity utilized by developments that have
received final approvals. The spreadsheet will show an estimate of the Excess
Capacity that would be utilized by any development application that has been
received but not yet finally approved, for planning purposes, but allocations of
Excess Capacity will require final project approval.
e. At all times, the extent and availability of Excess Capacity will be determined based
upon NMCWD’s permit-approval determinations. When NMCWD determines
that the Excess Capacity has been fully exhausted, no further connections to the
Elliptical Pipe will be allowed.
6. Reimbursement to Minnetonka of Added Costs. Hopkins and Minnetonka will each adopt
land use policies or ordinances, as each deems appropriate for its jurisdiction, to require that
approved land use applicants pay a development fee equal to their proportionate share of the Added
Costs. The amount of the development fee must be calculated as follows for all developments
with 80 percent or less of total land area as impervious surface: $146,988.28 divided by the total
number of acres in the Development Contributing Area (as that area is determined under paragraph
4 above) times 1.05 (5% administrative fee). The five percent administrative fee is attributable to
developments in both Hopkins and Minnetonka, for the purpose of reimbursing Minnetonka for
its costs in providing up-front financing and administration of the Added Costs.
For example only, if the final Development Contributing Area is 11.2 acres, the development fee
will be calculated as:
$146,988.28 ÷ 11.2 = $13,123.95 x 1.05 = $13,780.15 per acre.
If a development has greater than 80 percent impervious surface area, the development fee will be
increased by 10 percent for each 5 percent incremental increase in impervious surface area; for
example, a development with 85 percent impervious surface area would pay a fee of $15,158.17
(13,780.15 x 1.1). Each city is responsible for collecting the development fee from the land use
applicant in the manner it deems appropriate. Hopkins agrees to pay Minnetonka the full amount
of the development fee within 30 days after Hopkins provides final approval of the application to
which the fee is related, regardless of whether Hopkins has received payment from the land use
applicant. Hopkins reserves the right to charge a storm water fee or seek reimbursement from the
land use applicant or property owner.
7. Revised development fee; city responsibilities. Hopkins and Minnetonka recognize that,
based on the development fee formula in paragraph 6 above, any decrease in the amount of Excess
Capacity (based on the post-construction determination to be made under paragraph 4 above) will
reduce the acreage of the Development Contributing Area, which will result in an increase in the
development fee to be collected. In addition, Hopkins and Minnetonka recognize that, if the Excess
Capacity is materially less than estimated, it is possible that the amount of the development fee as
calculated under paragraph 6 above could be financially unrealistic for developers, when compared
to the cost of constructing on-site stormwater systems. In that event, Hopkins and Minnetonka
agree to cooperate in good faith in establishing a development fee that is financially viable, and
each city will be responsible for the difference between the revised development fee and the
development fee determined under paragraph 6 above. Hopkins and Minnetonka also recognize
that the development may not occur for several years.
8. Term; Termination of Certain Rights and Obligations. The term of this Agreement shall be
perpetual in nature, except that all rights and obligations of the parties that are contained in
paragraphs 6 and 7 of this Agreement shall terminate on the earlier of: (a) 30 years after the date
that Council provides the notice of Excess Capacity as required in paragraph 4 above; or (b) when
the Excess Capacity has been exhausted, as determined by the NMCWD, and all development fees
for the developments that are utilizing the Excess Capacity have been collected and remitted to
City of Minnetonka as provided in paragraph 6. For the sake of clarity, if the parties’ rights and
obligations in paragraphs 6 and 7 of this Agreement terminate, Hopkins shall have no obligation
to reimburse Minnetonka for any additional share of the Added Costs. Notwithstanding the
foregoing, nothing contained in this Agreement shall preclude the cities from establishing and
requiring land use applicants or property owners to pay development fees at any point in time after
the rights and obligations in paragraphs 6 and 7 terminate, in accordance with then-current state or
local laws and regulations.
9. Notice. The parties agree that any notice made pursuant to this Agreement must be sent to
all parties by:
a. Email, as long as the recipient acknowledges receipt by e-mail or otherwise in
writing; or
b. Certified mail.
10. Dispute Resolution. A dispute resolution process shall be used for any unresolved issue,
dispute or controversy between the parties before any legal remedies are exercised. The dispute
resolution process contains a three-level dispute resolution ladder that escalates a dispute from
the project management level through the executive management level.
The City of Minnetonka is represented from level 1 to 3 in the following order: City
Engineer, Public Works Director, and City Manager.
The City of Hopkins is represented from level 1 to level 3 in the following order: City
Engineer, Public Works Director, and City Manager.
The Council is represented from level 1 to 3 in the following order: Deputy General
Manager, General Manager, and Regional Administrator.
At each level, representatives of the Parties shall meet and continue to explore resolution until
either party determines, in good faith, that effective resolution is not possible at the current
level and notifies the other parties that the process is elevated to the next level. If any party
make such a determination at any point during issue resolution at level 3, then the dispute
resolution process has been exhausted.
11. Force Majeure. No party will be responsible to any other party’s failure to perform or a delay
in performance under this Agreement where such delay or failure to perform is caused by
events beyond the performing party’s reasonable control, including but not limited to unusually
severe weather, fire, floods, or other acts of God, statutory and regulatory changes, labor
disputes, acts of war or terrorism, or public health emergencies.
12. Governing Law. This Agreement is entered into and under the laws of the State of Minnesota
and shall be interpreted in accordance therewith.
13. Liability. To the extent authorized by law each party is responsible only for its own acts and
the results of its acts. The liability of the Council and the Cities is governed by the provisions
of Minnesota Statutes, Chapter 466.
14. All parties are authorized to enter into this Agreement and have caused this Agreement to be
executed by their duly authorized representatives on the dates indicated below.
[signature pages follow]
Signature page – Metropolitan Council
METROPOLITAN COUNCIL
By:
Its
Date: ___________________
Signature page – City of Hopkins
CITY OF HOPKINS
By: ________________________________
Its Mayor
By: ________________________________
Its: City Manager
Date: ______________________________
Signature page – City of Minnetonka
CITY OF MINNETONKA
By: ________________________________
Its Mayor
By: ________________________________
Its: City Manager
Date: ______________________________
ATTACHMENT 1: PROJECT CONTRIBUTING AREA
ATTACHMENT 2: DEVELOPMENT CONTRIBUTING AREA
¯Oct, 11 2019 1:21 PM K:\02171-010\GIS\Maps\OMF\2018-05-14 NO OMF Analysis\2018-10-29\02171-010 Shady Oak Station\02171-010 Shady Oak Station.aprx By: lwheelerShady Oak South Pond
Project Contributing Area
Attachment 1
DATE: 10/11/2019
0 50 100 150 20025Feet
Legend
SWLRT Alignment
Project Contributing Area
Shady Oak
South Pond
1 inch = 200 feet
¯Oct, 11 2019 1:23 PM K:\02171-010\GIS\Maps\OMF\2018-05-14 NO OMF Analysis\2018-10-29\02171-010 Shady Oak Station\02171-010 Shady Oak Station.aprx By: lwheelerShady Oak South Pond
DATE: 10/11/2019
0 50 100 150 20025Feet
Legend
SWLRT Alignment
Private Contributing Area
Shady Oak
South Pond
1 inch = 200 feetDevelopment Contributing Area
Attachment 2