Ramsey County sues Arden Hills over TCAAP

The Rice Creek Commons development will cover 427 acres of the former Twin Cities Army Ammunition plant, on land in Arden Hills that is currently owned by Ramsey County. (file photo)

County wants out of joint powers agreement

Ramsey County submitted an official complaint against the City of Arden Hills on May 10, following the city's refusal to enter into mediation about or to voluntarily terminate the joint powers agreement between the two with respect to the Rice Creek Commons.

The county filed suit in Ramsey County District Court against the city for alleged breach of contract and breach of the implied covenant of good faith and fair dealing when it comes to planning for the development of the former Twin Cities Army Ammunition Plant site.

In its suit, the county stated that after negotiations broke down over ongoing concerns about density, affordable housing and financing of the development, the city breached the joint powers agreement when it refused to enter into mediation and then refused to voluntarily terminate the contract.

Ramsey County owns a portion of the former TCAAP site, located in Arden Hills. The joint powers agreement is between the county and city, giving Arden Hills input into the development planning process.

In an interview prior to the filing, Arden Hills Mayor David Grant emphasized that the city wanted to move forward with a master plan that had been agreed to by both the city and county in 2016. 

Attempts to finalize agreement with developer

While the county had initially tried to push higher housing density for the 427-acre site, it eventually approved the 2016 master plan in an effort to move the project along. 

Then, in 2018, when trying to finalize a master development agreement with the city and developer Alatus, LLC, differences again emerged over density, affordable housing and financing. 

According to the county's complaint, "the City's overarching concern appeared to be recouping its costs, avoiding any financial contributions, and mitigating any financial risk to the City. At the same time, the City made it clear that it would not accept any increase in density in order to offset the costs."

The Joint Development Authority, made up of city and county officials and created by the joint powers agreement, approved a preliminary master development agreement in September 2018. The final draft called for 1,431 housing units with 10% being affordable at 80% area median income. Arden Hills would contribute roughly $8.2 million to cover development costs.

County commissioners again noted that flexibility was essential, as negotiations with the developer and the needs of the community could change the numbers going forward. 

Although the Arden Hills City Council was not needed to approve the preliminary development agreement, it did need to approve a cooperative financing agreement, which caused more rifts over density, especially as the county expressed interest in further increasing the density after the preliminary development agreement was approved.

Request for mediation and voluntary termination

County officials have attended only one Joint Development Authority meeting so far this year, on Feb. 4, where Commissioner Blake Huffman suggested the two parties enter into mediation to address outstanding issues. 

In a Feb. 25 letter to the county, city council members refused, calling mediation premature and requesting more exact figures on the county's most recent desired increase in density. "The JPA contemplates evolutionary changes to the development, and provides a mechanism for revisions during the build out of the development. But it is impossible for the City or the public to evaluate the traffic, environmental and service delivery impacts of 'more,'" council members said in the letter.

Following the city's refusal of mediation, the county requested that the city voluntarily terminate the joint powers agreement, which the city refused for similar reasons.

Desired outcome

The county is asking the court to declare the joint powers agreement null, in light of what it sees as the city's violation of the agreement's terms. 

The county also asked the court to, "Declare that Ramsey County has discharged its obligations under the Joint Powers Agreement and is under no continuing obligation to perform under the Joint Powers Agreement except as necessary to wind down the [Joint Development Authority] and to dispose of or resolve any joint assets or liabilities."

If the courts agree with the county, Arden Hills would be put in a more traditional reviewing authority role, signing off on development specs but without its current active role in the planning process.

The Arden Hills City Council is meeting at 7 p.m. on May 13. At the meeting, City Administrator Dave Perrault is expected to give on update on the Rice Creek Commons project.

Bridget Kranz can be reached at bkranz@lillienews.com or 651-748-7825.

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