Arden Hills, Alatus come to general terms on long-stalled Rice Creek Commons project, but county has yet to weigh in

Frederick Melo, Pioneer Press
·4 min read

After years of political headbutting, the city of Arden Hills has agreed to general terms with Alatus, the master developer behind the sprawling Rice Creek Commons project. That still leaves Ramsey County, the landowner, to weigh in.

The master plan for the long-stalled development — located at the former site of the long-vacant Twin Cities Army Ammunition Plant, or TCAAP — envisions construction on 320 acres of developable land, of which approximately 50 percent would be commercial and 50 percent would be residential.

That would equal 1,460 units of residential housing, including 326 units designated affordable housing. Of those affordable units, 20 percent would be owner-occupied under the new terms.

Alatus would also develop three new city parks within Rice Creek Commons, at the developer’s expense. To reduce costs and liabilities for Arden Hills, the developer will front the cost for a new water tower and utilities, and put $17 million in tax increment financing — or “TIF” revenues generated from on-site property taxes — toward various infrastructure, including parking.

“This is a sizable, sizable project, and it could be a real asset to the northeast metro,” said Arden Hills Mayor David Grant, in an interview Tuesday. “It offers the developer the opportunity to start with a clean slate. There’s nothing on the property. The developer has the opportunity to create a (virtual) city, without any constraints of pre-existing development. And it comes at a time when people are looking for housing.”

AFFORDABLE HOUSING

Grant added that affordable housing was always a question — how much and what type.

“TIF was not previously on the table, that I’m aware of,” he said. “The developer will finance the city water tower and trunk utilities, and the city will pay the developer back out of trunk connection fees as the development goes forward. If the project should stall, the developer is the one that is funding that component. That’s a big risk reduction for the city, keeping in mind that the city of Arden Hills is 10,000 people, so we’re a relatively small city.”

Ramsey County officials said Tuesday they have yet to see the new agreement, which follows two years of litigation between the city and county.

“I can’t even comment on it,” said Ramsey County Commissioner Trista MatasCastillo, in a brief interview. “We’ve got more questions than answers. They didn’t talk to us ahead of time. We have to look at the whole proposal, but we just don’t have it yet.”

The city’s joint powers agreement with Ramsey County to develop the 427 acres of surplus military land dates back to 2012. The friendly effort to redevelop an area as large as downtown St. Paul and potentially more populous than most Minnesota cities soured in 2018 when the city and county could not come to terms over the amount of housing to be constructed on site, as well as infrastructure funding. The disagreement ended up in Ramsey County District Court.

In 2019, the county attempted to dissolve its partnership with Arden Hills, an effort rejected by the court.

“The county did sue the city, and the city prevailed, and then the county said in July 2021 that the city, if it so chose, could negotiate with the developer,” Grant said. “We took the initiative to do that. The term sheet represents an agreement between the city and the developer. It’s just a term sheet … but at this point we’re hopeful that the county is willing and able to move this project forward. They’re still the landowner.”

TERMS

In a written statement issued by the city, the general terms agreed to by Arden Hills and Alatus include:

  • $17 million in tax increment financing.

  • A $5 million water tower and $3.5 million in water and sewer utilities to be covered by the developer and recouped through customer fees.

  • Alatus has also agreed to fund city deficits on the project during the first five years should revenues not be sufficient to cover expenses.

In addition, the developer will reimburse the city for previously incurred planning costs of $1 million. The developer has also agreed, at their cost, to construct three new city parks, at a previously estimated cost of $14.5 million, and turn them over to the city. Of the 326 affordable units, 180 units are planned to be affordable at 50 percent and 60 percent of the area median income for Ramsey County.

One thing that hasn’t changed is the overall density on the site, which will be 1,460 housing units. Ramsey County officials had long called for more than 1,700 housing units. That conversation will now move forward between Alatus and the county.

“Instead of having three parties at the table, now there’s two parties, because the city and the developer have come to terms,” Grant said.

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