The New Brighton Exchange
The New Brighton Exchange project is located at the northwest corner of Interstate Highways 694 and 35W in New Brighton. As early as the mid-1980’s, the City had envisioned redevelopment of this area to address long-standing environmental contamination, to create high-paying jobs, to increase the local tax base, and to expand local housing choices. By the early 2000’s, it became clear the private market could not facilitate change given existing conditions, so elected officials, residents, and the business community came together and agreed the public sector would need to take a more active role to see redevelopment through. Multiple studies were completed, development partners were identified, and significant funding from Federal, State, County, and Metropolitan sources was then lined up to complete the largest redevelopment project in New Brighton’s history.
The following topics address the most frequently asked questions and topics regarding the New Brighton Exchange.
The New Brighton Exchange redevelopment effort was necessary because of development patterns on the land which dated back to the founding of New Brighton. In 1883, the area became a prime target for development thanks to the provision of rail service to the area by the Minnesota Transfer Railroad Company. By 1888, the Minneapolis Stockyards and Packing Company had set up operations on the land, and the construction of related slaughterhouses, packing plants, rendering works, and hide houses occurred shortly thereafter (resulting in the area becoming known as “Butcher’s Spur”). Construction of many hotels soon followed—including the four-story brick, “Cattlemen’s Hotel” which was renamed the Exchange Building—and the Village of New Brighton was incorporated in 1891. By that time, fourteen passenger trains were passing through the area daily.
The stockyards only operated until about 1900 due to a series of suspicious fires and competition from South St. Paul, but some uses survived over the subsequent decades. Beisswenger’s Hardware moved into the old hotel building, removed the upper floors, and operating at that location until the mid-1980s when a new building was constructed. Two of the area’s rendering plants continued operation for many years: the Gordon plant (later called the Darling plant) operated until the late 1990’s, and the Mengelkoch operation didn’t close its doors until early 2004. Over time, areas surrounding the historical uses were filled in with a mixture of other industrial and commercial land uses. Over the course of the land’s history, some land users contaminated the land and groundwater, and impacted nearby Long Lake and Rush Lake. Complicating matters for future redevelopment, lowlands and swamps on the east side of the Highway 8 (now known as Old Highway 8) were filled in with construction and household debris in the 1960s due to the lack of regulation on such activities.
Late 20th Century
New Brighton developed rapidly during the 1960s and 70s. Spurred by the construction of north-south (I-35W) and east-west (I-694) interstate highways, the City quickly grew in excess of its current population (23,337 in 1976 as compared to 22,900 in 2020). The “Butchers Spur” name for the area had long been out of use, and the area became referred to locally by two names: the “New Brighton Exchange” in honor of the most prominent primary historic building still standing in the area, or as the “Northwest Quadrant” which referenced the area east of Long Lake and north of I-694 because of its relatively detached status from the rest of the City.
By the early 1980s, City leaders had grown concerned that the deteriorating, older portions of the City would negatively affect nearby areas. New Brighton embarked on a substantial redevelopment program throughout the oldest portions of town. In December 1981, a large “development district” was established, encompassing much of the eastern side of New Brighton. This development district included the old downtown area, the heavy industrial area in the southeast, and the New Brighton Exchange area. Using tax increment financing, New Brighton successfully spurred redevelopment of several underutilized areas to attract job-creating businesses, including Thermo King, Donatelle Tool, and Print Craft. Multi-tenant office and office/warehouse projects were also constructed during this period. When necessary, contaminated lands were cleaned up to appropriate standards.
New Brighton Highway 8 Corridor Plan
By the 1980s, the historic north-south route connecting Minneapolis to New Brighton to Forest Lake and Duluth, Highway 8, had been bypassed by the now complete I-35W. City leaders recognized that the former highway corridor had significantly declined in use and needed to be studied. In 1986, the City commissioned Gair and Associates to complete the “New Brighton Highway 8 Corridor Plan.” The study reported, “… there exists land uses and vacant or under-utilized lands which may presently, or in the near future, be available for new development, redevelopment or rehabilitation.” The report went on to say that the plan “is intended to be used as a resource document to locate and evaluate candidate development sites by persons desiring to consider New Brighton for future development or simply to market real estate.” Three of the fourteen identified redevelopment sites along the Old Highway 8 corridor comprised the area of the New Brighton Exchange. Attributes of the Exchange sites were described, and they developed a conceptual plan for redevelopment of the land. Later, promotional materials were developed and the City placed advertisements in publications such as “Corporate Report” to attract private reinvestment into the area.
Unfortunately, the City’s planning and marketing efforts drew only limited new investment to the New Brighton Exchange. Industrial land uses were clearly entrenched, and in some cases there were no viable alternatives for relocation. Emerging environmental laws at the time began to place a larger clean-up burden on redevelopers than on current users, which also slowed development interest. Additionally, the size of the area and the nature of historic uses (asphalt plant, rendering plants, trucking firms) discouraged parcel-by-parcel improvements. Meanwhile, the City continued to use public financing tools to spur cleanup and redevelopment of other areas of the community. Most notably, the old downtown area just south of I-694 was transformed in the early and mid-1990s to the uses still seen in the area today.
Recognizing the need for renewed action and seeing an opportunity to extend the new downtown character to the north, another study of the New Brighton Exchange area was commissioned in 1997 and was completed jointly by Economic Development Services and the Hoisington Koegler Group. The 1997 planning effort included a visioning process informed by seven public meetings. The final report recognized the value of the natural amenities in the area, cited the impact that contaminated land had on redevelopment, and looked more broadly at the area in conjunction with sites up and down I-35W. For the New Brighton Exchange, the plan called for a mixed-use development with residential uses to take advantage of the proximity to Long Lake.
For the first time, the City recognized that the only way to implement redevelopment of the New Brighton Exchange was for the public sector to take a more active role in addressing the long-standing barriers to redevelopment. Thanks to several similar and successful redevelopment projects elsewhere in the community, financial resources were finally available to begin the process. Starting in the late 1990s, the City started to purchase land throughout the 100-acre area. Since the entire area needed to be acquired in order to maximize redevelopment potential, eminent domain had to be initiated in several cases, but the City negotiated settlements prior to any court hearings.
Environmental studies were conducted prior to acquisition of each property, and when possible, cleanup responsibility was negotiated with the sellers. That said, given the many contamination issues facing the area thanks to historic land uses, it was recognized that any investor in the area (including the City) was accepting a level of risk with regard to unidentified contamination. For example, sometimes contamination would later be found under buildings or, in the case of the asphalt plant, under stockpiles, and therefore no property could be fully assessed until after the land was acquired and demolition had occurred. Furthermore, environmental regulators would not provide definitive requirements for cleanup or site certification until detailed studies were completed and redevelopment plans were presented. The ability of redevelopment plans to mitigate or remove former contaminants often dictated what replacement land uses would be allowed by the PCA (for example, proposed new residential areas were required to meet higher cleanup standards than lands planned for new industry). Fortunately, agencies have recognized the public benefit of remediation efforts in areas such as the New Brighton Exchange, and there are numerous funding programs at multiple levels of government to provide assistance in these circumstances. The City successfully obtained substantial funding from federal, state, county, and metropolitan sources, and will continue to apply for outside funding as it becomes available to meet the needs of this area.
While land was being acquired and environmental studies were being completed, the City solicited potential development partners for the land. In the early years of the project, New Brighton selected Ryan Companies to be the preferred “master developer” for the entire area. Ryan assisted the City with planning and engineering work for over three years, but the parties could not agree on the terms of a redevelopment agreement, so the partnership was put on hold. The City then advertised for housing developers interested in the area, and ultimately selected David Bernard Homes and Sherman Associates to lead efforts on residential construction. Ryan Companies was then brought back on board to assist with commercial development on a more limited basis from what was originally envisioned.
Some projects, such as Transoma Medical (now the Ivanti building) and APi Group partnered with Ryan Companies to complete construction of their respective buildings in the mid-late 2000’s, but the onset of the “Great Recession” in 2007 put all further projects on hold and saw both residential developers abandon their interest in the area. Further development resumed around 2012 when Ryan Companies partnered with Cardiovascular Systems Inc (CSI) on their corporate headquarters, and StuartCo brought the first residential project to the area which is now known as “The View Apartments at Long Lake.” By 2015, Pulte Homes had begun construction on “The Enclave” which is a large single family and townhome development located in the NW corner of the New Brighton Exchange; and finally in 2018, Ryan Companies worked with TÜV SÜD on the newest corporate headquarters to open its doors in the New Brighton Exchange.
At the present time, there are only three remaining developable plots of land in the New Brighton Exchange: two sites are owned or controlled by existing businesses in the New Brighton Exchange (APi and CSI), and will likely be used for the expansion of both businesses in the next five years (i.e. by the end of 2028). Only one parcel, referred to as “Block B,” is still available for acquisition and development. While Block B is in a very desirable location given its visibility from both I-35W and I-694, it is also the most difficult parcel to build on given historic contamination in the area and underlying soil conditions. Engineering studies have determined that pilings must be used to support any building on this site, and the City expects the PCA will require special construction techniques be implemented to mitigate against vapor intrusion. Because of the extraordinary development costs associated with this final development site, the City is examining how to support future development on Block B with additional external funding sources or additional tax increment financing support.
Past land uses contaminated the soil and shallow groundwater in several areas of the New Brighton Exchange to the west of Old Highway 8. Specifically, investigators identified three significant areas of soil contamination. The first impacts were identified on the former Midwest Asphalt site and areas adjacent to Long Lake Regional Park. Contamination in this area was primarily caused by land owners and operators in the 1940s through 1960s (prior to Midwest Asphalt) when there was little in the way of environmental regulation. That said, recycled asphalt piles maintained by Midwest Asphalt also contained petroleum products which contributed to contamination of nearby soils. The second area of contamination was on the former Northwest Refinery site. From the early 1900s until the 1960s, Northwest Refinery produced gasoline, kerosene, diesel fuels, and heavy fuel oils. Waste products left behind in the soil included tar, gasoline wash, spent caustic soda, desalter water, and clean-up water. And finally, the former Trio Solvents site was also determined to be contaminated. Operation of the facility in the 1970s left behind industrial solvents such as trichloroethene (TCE), trichloroethane (TCA), methylene chloride, and perchloroethylene. Both the Northwest Refinery site and the Trio Solvents site were placed on the state’s Superfund list in the 1990s. Besides these three sites and closer to the highway, a former gas station with leaking underground storage tanks also operated for several years. Contamination from all the above sites was found in the soil and shallow groundwater, and all issues had to be mitigated prior to redevelopment of the area.
For approximately three years in the 1960’s, a private dump covering approximately 20 acres operated to the east of Old Highway 8. Low-lying wetlands and depressions were filled with construction and household debris to a depth of over 30 feet in some areas. Organic material (garbage, paper, cardboard, wood, etc.) continues to decompose to this day, emitting gases including methane, carbon dioxide, and hydrogen sulfide. These vapors are not in and of themselves hazardous nor do they prohibit development of the land, but they can be dangerous if allowed to accumulate in enclosed building spaces. Beyond the dump, several much smaller areas of contamination, including spillage from former underground fuel oil tanks in the area, old asbestos shingles, and a smaller separate dump, had to be addressed early in the property acquisition process.
In Minnesota, the Pollution Control Agency (PCA) regulates environmental matters throughout the state. In order to facilitate development of the New Brighton Exchange, the City was required to submit detailed remediation plans for all areas of known contamination in redevelopment areas. The PCA will (generally) not provide a definitive regulatory response without carefully reviewing a detailed cleanup plan and proposed building plans. The City engaged BARR Engineering as its environmental consultant to help prepare all such plans, and that relationship continues to this day.
To avoid risk and the potential liability involved in taking title to land prior to cleanup, developers and lenders want regulatory assurances that a project can proceed before heavily investing in a property. They also want to avoid unexpected costs involved in new construction. For these reasons, the City found it was most economical to complete cleanup work to required standards prior to conveying land to developers. This also allowed the City to negotiate for a higher “clean land” price, and opened the door to outside funding from various state, federal, county, and metropolitan programs for needed clean-up efforts.
The PCA issues several types of standard written protections to landowners. A “No Further Action Letter” is sought when an innocent party wishes to take title to a property. This letter does not suggest that the property is free of contamination, but clarifies that the party seeking the letter won’t be held legally responsible for the contamination by the agency. Importantly, the City received such a letter prior to purchasing Midwest Asphalt. A “Certificate of Completion” is the most complete assurance issued by the PCA as it indicates that cleanup is complete and no further public action is required. Developers and their lenders, on behalf of future homeowners, will insist on this level of assurance whenever feasible.
Neither the City nor the State have regulatory power to force previous owners to remediate current conditions, or to pay for remediation work done by the City or a developer. Nevertheless, environmental studies were completed on every property prior to acquisition, in order to assess risk and cost to the greatest extent possible. Where feasible, sellers were asked to accept a portion of the financial responsibility for contamination caused during their occupancy.
The objective of environmental remediation is to minimize the opportunities for hazardous substances to come into contact with people living, working, shopping, or passing through the area. This objective can be accomplished in several ways:
- Removal of contaminated soil or water;
- Physical separation (vertically or horizontally) of remaining contamination areas from areas of development;
- Venting of hazardous gases into the atmosphere; and/or
- Restrictions on access to contaminated areas.
An appropriate remediation plan is based on the exact nature and location of the contamination, the surrounding soil and water conditions, and the proposed developments.
Several cleanup options on the West side of Old Highway 8 were analyzed and compared based on cost, time to implement, the effects on surrounding areas during cleanup, and the extent of “legacy” issues for nearby developments. Since adjacent uses were residential in nature, the City proposed an aggressive remediation plan that left the fewest long-term monitoring and management issues in this portion of the development. The PCA reviewed and approved a conceptual Response Action Plan, needed updates were made, and Phase I of development was authorized to proceed.
On the remaining land to be developed as a second phase, contaminated soil was totally removed to an elevation two feet below the water table. In some areas, excavation went even deeper to eliminate unstable subsoil conditions. All contaminated soil was taken to an approved landfill outside of the City. Peat, muck, and similar structurally unsuitable (though not contaminated) soils were moved to the northwestern corner of the development area where no excavation or building was being proposed. In that area, the grade was instead raised consistent with development plans on adjacent lands, and a new City park (Lions Park) was established to serve the area.
All Phase II development land was separated by at least 100 horizontal feet and ten vertical feet from any remaining contamination in the area. City water is treated and supplied from other portions of the City, so groundwater in this area is not disturbed. Any residual vapor migration from the northern area is intercepted by vent stacks running under the buildings which vents through the roofs.
The projected cost to completely removal all dump material on the east side of Old Highway 8 ($50 million) was deemed prohibitive, so the City instead adopted a plan to manage the dump in its present location. First, the western edge of dump material was removed so that no contamination would exist within 200 feet of proposed homes in the area. Removed dump material was consolidated into the heart of the dump off to the east, and the area was reshaped and leveled into a usable surface. Once ideal contours had been established, a special membrane was laid over the dump to collect the soil gases, along with a four foot clean soil cover. Buildings located near the edge of the dump required installation of venting along the perimeter of the structures to intercept residual gases, and internal venting systems were also install for additional safety.
To keep citizens up to date on development progress within the New Brighton Exchange, the Community Development Department posted periodic reports on the City’s website starting in Summer of 2008 through the Winter of 2016. As nearly all land was developed or spoken for by the issuance of the final report, subsequent updates on development were shared directly via posts on the City’s website or through the quarterly newsletter.