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IV.7. Environmental Cleanup Grant Application for Blake Road Station, YoungquistOctober 20, 2020 Council Report 2020-078 ENVIRONMENTAL CLEANUP GRANT APPLICATIONS FOR BLAKE ROAD STATION Proposed Action Staff recommends adoption of the following motion: Move to approve Resolution 2020-057 approving applications to the Metropolitan Council Tax Base Revitalization Account, DEED Contamination Cleanup, and Hennepin County Environmental Response Fund programs for the Blake Road Station project. Overview Trilogy Real Estate Group has submitted land use applications for its proposed Blake Road Station project, which would entail redevelopment of the Hopkins Commerce Center, to be done in three stages. The first phase is located at 8594 Excelsior Boulevard and would be a mixed use building including approximately 220 multi-family housing and 2,000 square feet of retail. As part of the development of Phase A, Trilogy has asked the City of Hopkins to support grant applications for environmental cleanup to the Minnesota Department of Employment and Economic Development (DEED), the Metropolitan Council, and Hennepin County. Environmental investigations found contamination above the Minnesota Pollution Control Agency’s (MPCA) applicable standards for soil, groundwater, and soil vapor, which must be remediated before development can begin. Grant funds from these programs will be used to implement the Response Action Plan that has been approved by the MPCA. Applicants for grants from DEED and the Metropolitan Council must be local governmental units. Therefore, the City would act as the sponsor and applicant for these programs. Developers may apply directly to Hennepin County, with a resolution from the City. The projected cleanup costs are $761,188; the total amount of the three grants requests is $620,159. All costs associated with the development of the applications will be paid by Trilogy, including any local match requirements. If approved, funds from DEED and the Metropolitan Council would be provided to the City of Hopkins and Trilogy would be the subrecipient of the grant funds. The City would enter into a subrecipient agreement with Trilogy. Supporting Information • Resolution 2020-057 • Summary of Trilogy Request ________________________________________ Jan Youngquist, AICP Community Development Coordinator Financial Impact: $_____0____Budgeted: Y/N ___ Source: __________ Related Documents (CIP, ERP, etc.): _______________________________________ CITY OF HOPKINS HENNEPIN COUNTY, MINNESOTA RESOLUTION 2020-057 RESOLUTION AUTHORIZING APPLICATIONS TO THE METROPOLITAN COUNCIL TAX BASE REVITALIZATION ACCOUNT, DEED CONTAMINATION CLEANUP, AND HENNEPIN COUNTY ENVIRONMENTAL RESPONSE FUND PROGRAMS FOR THE BLAKE ROAD STATION PROJECT WHEREAS the City of Hopkins has identified a contamination cleanup project within the City located at 8594 Excelsior Boulevard to be developed as Blake Road Station by Trilogy Real Estate Group that meets the purposes and criteria of these programs; and WHEREAS the City of Hopkins is located within the seven county metropolitan area defined in section 473.121, subdivision 2, is a participant in the Livable Communities Act's Local Housing Incentives Account Program for 2020 as determined by the Metropolitan Council, and is therefore eligible to make application apply for funds under the Tax Base Revitalization Account; and WHEREAS the City finds that the required contamination cleanup will not occur through private or other public investment within the reasonably foreseeable future without Tax Base Revitalization Account grant funding; and WHEREAS the City represents that it has undertaken reasonable and good faith efforts to procure funding for the activities for which Livable Communities Act Tax Base Revitalization Account funding is sought but was not able to find or secure from other sources funding that is necessary for cleanup completion and states that this representation is based on the following reasons and supporting facts; and WHEREAS the City has not violated any Federal, State or local laws pertaining to fraud, bribery, graft, kickbacks, collusion, conflict of interest or other unlawful or corrupt practice; and WHEREAS the City has the legal authority to apply for financial assistance and the institutional, managerial and financial capability to ensure adequate project and grant administration; and WHEREAS the sources and amounts of the local match identified in the Department of Employment and Economic Development application are committed to the project identified; and WHEREAS the City certifies that it will comply with all applicable laws and regulations as stated in the contract grant agreements. THEREFORE BE IT RESOLVED that, the City Council of Hopkins authorizes the City Manager to submit an application for Metropolitan Council Tax Base Revitalization Account grant funds and, if the City is awarded a Tax Base Revitalization Account grant for this project, the City will be the grantee and agrees to act as legal sponsor to administer and be responsible for grant funds expended for the project contained in the Tax Base Revitalization grant application submitted on November 2, 2020. BE IT FURTHER RESOLVED that, the City Council of Hopkins approves the Contamination Cleanup grant application to be submitted to the Department of Employment and Economic Development (DEED) on November 2, 2020, by the City of Hopkins for the Blake Road Station site. BE IT FURTHER RESOLVED that the City of Hopkins acts as the legal sponsor for project contained in the Contamination Cleanup Grant Program to be submitted on November 2, 2020 and that the City Manager is hereby authorized to apply to the Department of Employment and Economic Development for funding of this project on behalf of the City of Hopkins. BE IT FURTHER RESOLVED that, the City Council of Hopkins approves the submittal of an Environmental Response Fund grant application to the Hennepin County Environment and Energy Department on November 2, 2020 by Trilogy Real Estate Group. NOW, THEREFORE BE IT FINALLY RESOLVED that, upon approval of the grant applications, the Mayor and the City Manager are hereby authorized to execute such agreements with the State of Minnesota and the Metropolitan Council as are necessary to implement the project on behalf of the City of Hopkins. Adopted this 20th day of October, 2020. By:__________________________ Jason Gadd, Mayor ATTEST: ____________________________ Amy Domeier, City Clerk AA/EOE Braun Intertec Corporation 11001 Hampshire Avenue S Minneapolis, MN 55438 Phone: 952.995.2000 Fax: 952.995.2020 Web: braunintertec.com October 15, 2020 Jan Youngquist City of Hopkins 1010 1st Street South Hopkins, MN 55343 Re: Project Summary of Contamination Cleanup Grant Applications Blake Road Station Apartments – Phase A 8594 Excelsior Boulevard Hopkins, Minnesota Dear Ms. Youngquist: Braun Intertec Corporation is assisting Trilogy Real Estate Group with application for the fall 2020 contamination cleanup grants offered by the State of Minnesota Department of Employment and Economic Development (DEED), Hennepin County’s Environmental Response Fund (ERF), and Metropolitan Council’s Tax Based Revitalization Act (TBRA). Applications for contamination cleanup grants are a collaboration between the developer and City. The Blake Road Station project will serve as a welcoming gateway and anchor for the new southwest light rail transit station and will advance long-standing City goals outlined in numerous area planning documents. The high-quality redevelopment of the project site and creation of a new transit-oriented node with significant residential density will provide a catalyst for redevelopment along the City’s east end. The Blake Road Station project is planned to be developed in a phased approach consisting of three phases. The first phase, Phase A is located at 8594 Excelsior Boulevard in Hopkins, Minnesota and is scheduled to commence in 2021. Current plans for Phase A of the project include demolition of the existing site building and construction of a new 331,688 square-foot, 7-story mixed-use building with approximately 220 units of residential housing and approximately 2,000 square feet of retail spaces on the street level. The proposed development includes one level of below grade parking. Phase A of the project is currently occupied with a strip mall with various commercial tenants including a hair and nail salon, liquor store and chiropractor among others. A portion of the existing building is vacant and was most recently occupied by a catering company. Historical uses of the Site include a boat repair facility with a paint booth and a laboratory. Recent environmental investigation work identified contamination at levels above the Minnesota Pollution Control Agency’s (MPCA’s) applicable soil, groundwater and soil vapor standards. Site soil is impacted by petroleum and non-petroleum contaminants. Groundwater, which is located approximately 15 to 19 below ground surface, is contaminated by petroleum and chlorinated volatile organic compounds (CVOCs), specifically trichloroethene (TCE). Soil vapor beneath the existing building is contaminated with TCE and tetrachloroethylene (PCE) above residential standards. Braun Intertec prepared a Response Action Plan (RAP) that outlines the planned activities designed to remediate the contamination at the site and mitigate risks to human health and the environment caused by the identified impacts. The RAP was recently approved by the MPCA. Blake Road Station Apartments – Phase A October 15, 2020 Page 2 A summary of the costs associated with environmental investigation and implementation of planned response actions is provided in the attached table. This table presents the current cost allocation by grantor (DEED, Hennepin County or Met Council) and includes developer funds that are required to meet match requirements of each grant agency. These estimated total cost and specific allocations by grant agency may change slightly as we work toward finalizing the grant applications. If grant applications are successful, a majority of the environmental cleanup costs will be paid by the grant agencies. Funds not provided through grants may be paid for by the developer or by value engineering building design. If you have any questions regarding this letter, please feel free to contact Brian Hoese at 612.940.3270 or bhoese@braunintertec.com and Pat Carr at 218.343.4471 or pcarr@braunintertec.com. Sincerely, BRAUN INTERTEC CORPORATION Patrick E. Carr, CHMM Project Scientist Brian J. Hoese, PE Group Manger, Senior Engineer Enclosure: Estimated Contamination Cleanup Budget and Funding Allocation Table DEED Met Council Hennepin County Developer Total 1 Phase I Environmental Site Assessment 2,800$ 100%Yes 2,800 2,800 2 Phase II Site Investigation and second round vapor sampling 53,987$ 100%Yes 53,987 53,987 3 Response Action Plan (RAP) Preparation 7,500$ 100%Yes 5,625 1,875 7,500 4 Regulated Materials Survey 29,629$ 100%Yes 29,629 29,629 5 Regulated Materials Survey - Pre-Demolition/Destructive 4,712$ 0%Yes 4,712 0 4,712 6 Environmental Plans and Specificaitons/Vapor Mitigation System Design 8,000$ 0%Yes 6,000 2,000 8,000 7 Pre-Construction MPCA Brownfield Program Review and Liability Assurances 2,000$ 0%Yes 1,500 500 2,000 108,628 13,125$ 4,712$ -$ 90,791$ 108,628$ 12%4%84% - Contaminated Soil Excavation and Segregation per MPCA-approved RAP Tons 1,800 $4.00 $7,200 0%Yes 5,400 936 864 7,200 - Contaminated Soil - Transport to disposal facility Tons 1,800 $13.00 $23,400 0%Yes 17,550 3,042 2,808 23,400 - Contaminated Soil - Cost to Dispose at Industrial Landfill Tons 1,800 $20.00 $36,000 0%Yes 27,000 4,680 - 4,320 36,000 2 RAP Implementation Environmental Monitoring, Testing and Documentation Reporting $60,000 0%Yes 22,800 15,000 15,000 7,200 60,000 3 Active Vapor Mitigation System under Parking Garage Sq. Ft.51,450 $4.00 $205,800 0%Yes 102,900 78,204 24,696 205,800 4 Utility Corridor Vapor Controls Sq. Ft.5,000 $2.00 $10,000 0%Yes 7,500 1,300 1,200 10,000 Abatement - Asbestos $107,860 0%Yes - 57,860 50,000 0 107,860 Abatement - Regulated Materials $8,500 0%Yes 8,500 8,500 Abatement - Professional Services (Specifications Development)$1,850 0%Yes 1,850 0 1,850 Abatement - Professional Services (Air Monitoring)Day 5 $1,200 $6,000 0%Yes 6,000 0 6,000 Abatement - Professional Services (Reporting)$950 0%Yes 950 0 950 7 Demolition $180,000 0%Yes - 130,000 50,000 0 180,000 8 MPCA Voluntary Program Charges for Technical Approvals and Liability Assurances $5,000 0%Yes 3,000 1,350 - 650 5,000 652,560$ 186,150$ 301,172$ 115,000$ 50,238$ 652,560$ 28.5%46.2%17.6%7.7%100.0% 761,188$ 199,275$ 305,884$ 115,000$ 141,029$ 761,188$ % of Eligible 26.2%40.2%15.1%18.5%100% Note:Part B developer costs meet 12% minimum match requirement of DEED eligible Lines 1, 2, 3, 4 & 8 Estimate Estimate 6 Estimate Estimate 5 Total Environmental Costs Subtotal - RAP Implementation Activities A. Pre-Development Environmental Work Estimated Contamination Cleanup Grant Allocations Blake Road Station Phase A Hopkins, Minnesota October 15, 2020 Item Activity Units Estimated Quantity Unit Cost Cost Estimate Funding Allocation Request % Complete Grant Eligible Estimate Estimate for 50% of building Subtotal - Pre-Development Environmental Work Estimate Estimate Estimate B. RAP Implementation Activities 1 Soil Remediation During Construction: Estimate Prepared by Braun Intertec Corporation