The New Brighton Exchange

pulte.jpg

The New Brighton Exchange project is located at the northwest corner of Interstate Highways 694 and 35W in New Brighton.  The project, which is the largest redevelopment project in the community’s history, began in the mid-1980s when the City started planning efforts for the area.  Elected officials, residents and the business community came together and agreed that the area needed to be redeveloped.

The goals of the project are to clean up environmental contamination from former industries, expand job opportunities, improve the tax base, create more housing choices, and help maintain New Brighton’s image as a great place to live and work.

The following topics will provide additional information about this redevelopment.

History

The redevelopment effort in the New Brighton Exchange area stems from the early development patterns, dating back to the founding of New Brighton.  The Minnesota Transfer Railroad Company was established in 1883.  In 1888, the Minneapolis Stockyards and Packing Company was formed along the rail line leading from Minneapolis to Duluth.  Slaughterhouses, packing plants, rendering works, and hide houses were located along “Butcher’s Spur.”  Numerous hotels soon followed, including the four-story, brick Cattlemen’s Hotel, later called theExchange Building.  The Village of New Brighton was incorporated in 1891.  By then, fourteen passenger trains passed through daily.

The stockyards only lasted until about 1900, their decline hastened by a series of suspicious fires and competition from South St. Paul.  But some of the uses survived for many more years.  Beisswenger’s Hardware took over the old hotel building, removing the upper floors and operating there until the mid-1980s, when a new building was constructed.  Three rendering plants continued for many years; the Gordon (later Darling) plant until the late 1990s and the Mengelkoch operation until early 2004.  The area nearby filled in with a mixture of industrial and commercial uses, some of which contaminated the land, groundwater, and nearby Long Lake and Rush Lake.  Lowlands and swamps on the east side of the highway were filled in with construction and household waste in the 1960s.  There were few restrictions on these types of activities.

New Brighton developed rapidly during the 1960s and 1970s.  Spurred by the construction of north-south and east-west interstate highways, the City grew to nearly its current population of 22,500.  The “New Brighton Exchange” was defined by the area east of Long Lake, on the “other side” of I-694 from most of the City.

By the early 1980s, leaders had grown concerned that the deteriorating, older portions of the City would negatively impact 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, including the old downtown area, the heavy industrial area in the southeast, and the New Brighton Exchange area.  Using tax increment financing, New Brighton spurred redevelopment of several underutilized areas for 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.

By the 1980s, Highway 8, the historic route from Minneapolis north through New Brighton to Forest Lake and Duluth, had been bypassed by I-35W.  City leaders recognized that the corridor had declined and needed to be addressed, and commissioned a “New Brighton Highway 8 Corridor Plan” by Gair & Associates in 1986.  This 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.”  Fourteen sites were identified up and down the corridor, three of which comprised what later became known as the Northwest Quadrant, now New Brighton Exchange.  The attributes of each site were described, and a conceptual plan was shown.  Later, promotional materials were developed and advertisements were placed in publications such as “Corporate Report.”

There was very little new investment in the New Brighton Exchange as a result of this planning and marketing effort. Industrial land uses were entrenched, in some cases without viable alternatives for relocation.  Emerging environmental laws, placing a larger burden on redevelopers than on current users, also slowed developer interest.  The size of the area and the nature of the uses (asphalt plant, rendering plants, trucking firms) discouraged parcel-by-parcel improvements.  Meanwhile, the City continued to use public finance tools to spur cleanup and redevelopment of other areas.  Most notably, the old downtown area just south of I-694 was transformed in the early and mid-1990s.

Recognizing the need for renewed action and seeing the opportunity to extend the new downtown character, another study was commissioned in 1997, jointly by Economic Development Services and Hoisington Koegler Group.  This was a visioning process that included seven public meetings.  The report recognized the value of the natural amenities, cited the impact of contaminated land, and looked more broadly at the area in conjunction with sites up and down I-35W.  For the New brighon Exchange, the plan called for a mixed-use development with residential uses to take advantage of the proximity to Long Lake.

This time it was recognized that the only way to implement the plan was for the public sector to take a more active role. Through successful redevelopment projects elsewhere, financial resources were available.  Starting in the late 1990s the City started to assemble land throughout the 100-acre area.  Since the entire area needed to be acquired in order to maximize the redevelopment potential, eminent domain was initiated in several cases, but settlements were negotiated prior to court hearings.

Environmental studies were conducted prior to acquisition of each property.  When possible, cleanup responsibility was negotiated with sellers.  But the City has been forced to accept several known risks in becoming involved with areas of contamination.  Sometimes contamination has been found under buildings or, in the case of the asphalt plant, under stockpiles, and therefore cannot be fully assessed until after closing and demolition.  Environmental regulators will not provide definitive requirements for cleanup or certification until detailed studies and proposals are completed.  Standards and interpretations have changed over the years, and residential areas have higher standards than previous industries. Fortunately, agencies have recognized the public benefit in remediation and offer funding programs for assistance.  The City has obtained substantial funds from federal, state, county, and metropolitan sources, and will continue to apply for outside funding at the appropriate times.

Over the same period, potential development partners were solicited.  In 1999 Ryan Companies was selected as “master developer” for the entire area.  Ryan assisted in planning and engineering work for more than three years, but was never able to reach agreement with the City on the terms of a redevelopment agreement.  In 2003 the City advertised for housing developers, resulting in the selection of David Bernard Homes and Sherman Associates.  Commercial developers were requested in 2006, resulting in further discussions with Ryan Companies on a more limited basis.  (A new office project for Transoma Medical is under construction as a result of this partnership.)  Additional interest has grown with the visible changes after building demolition and the upgrade of Old Highway 8 through the area.  APi Group is proceeding to develop its headquarters building.  Other potential developers are in the preliminary proposal stages.

Significant challenges remain for the redevelopment of the New Brighton Exchange, but many of the risks and most of the public investment has taken place.  The City remains optimistic that the project can be fully developed over the next five to seven years in a way that reflects the vision of community leaders; enhances the environment; and adds options for living, working, and shopping; while minimizing negative impacts to existing City residents and businesses.

Environmental

Existing Conditions – West Side

Past land uses have contaminated the soil and shallow groundwater in several areas of the New Brighton Exchange.  On the west side of Old Highway 8, three significant areas of soil contamination impact the former Midwest Asphalt site and adjacent areas in Long Lake Regional Park.  This contamination was caused by land owners and operators prior to Midwest Asphalt, in the 1940s through 1960s, when there was little in the way of environmental regulation.

The Northwest Refinery operated on the far northern portion of the site.  From the early 1900s until the 1960s, the refinery produced gasoline, kerosene, diesel fuels, and heavy fuel oils.  Waste produces included tar, gasoline wash, spent caustic soda, desalter water, and clean-up water.  To the southeast, Trio Solvents operated during the 1970s, recycling industrial solvents such as trichloroethene (TCE), trichloroethane (TCA), methylene chloride, and perchlorethene.  Both of these sites were placed on the state’s Superfund list in the 1990s.  Closer to the highway, near the recent Midwest Asphalt entrance, a gas station with leaking underground storage tanks operated for several years. Contamination from each of these sites has been found in soil and shallow groundwater and must be addressed prior to redevelopment.

Two additional factors have complicated assessment and cleanup of the area.  First, the enormous plume from the Twin Cities Army Ammunition Plant (TCAAP) flows through much of New Brighton, including this area.  This contamination resides in much deeper geologic layers, therefore can mostly be isolated from shallower levels affected by local uses. Nevertheless, trace levels of contamination found in Long Lake are thought to come from TCAAP, and this has complicated the analysis in the New Brighton Exchange.  Second, recycled asphalt piles from Midwest Asphalt contained petroleum products, some of which contaminated the nearby soil.

Existing Conditions – East Side

On the east side, a private dump operated on over 20 acres for three years in the 1960s.  Low-lying wetlands and depressions were filled in with construction and household debris, in some areas over 30 feet deep.  Organic material (garbage, paper, cardboard, wood, etc.) continues to decompose, emitting gases including methane, carbon dioxide, and hydrogen sulfide.  These vapors are not themselves hazardous but can be dangerous if allowed to accumulate in enclosed building spaces.

Several much smaller areas of contamination, including spillage from former underground fuel oil tanks, old asbestos shingles, and a smaller dump, were addressed earlier as part of the property acquisition process.

Regulatory Standards and Approvals

In Minnesota, the Pollution Control Agency (PCA) is responsible for regulating environmental matters throughout the state.  In order to facilitate development of the New Brighton Exchange, the City must submit detailed remediation plans for any areas of known contamination that are proposed for redevelopment.  The City uses Barr Engineering as its environmental consultant to assist in the preparation of these plans and the studies that support them.  The PCA will generally not provide a definitive regulatory response until carefully reviewing detailed cleanup and proposed building plans.

Developers and their lenders want to eliminate the risk or potential liability involved in taking title to land prior to cleanup and receipt of regulatory assurances.  They also want to avoid unexpected costs involved in new construction.  The City has therefore found it most economical to complete cleanup work to applicable standards, then to convey the land to developers.  This also allows the City to negotiate for a higher “clean land” price, and to receive outside funding from various state, federal, county, and metropolitan programs, since only public agencies are eligible applicants.

The PCA issues several types of standard written protections to landowners.  A “No Action Letter” is sought when an innocent party wishes to take title to a property.  This letter doesn’t suggest that the property is free of contamination, just that the party seeking the letter won’t be held legally responsible by the agency.  The City received such a letter prior to purchasing Midwest Asphalt.  A “Certificate of Completion” is the most complete assurance, indicating that any cleanup has been completed 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 has any regulatory power to force previous owners to remediate the current conditions, or to pay for work done by the City or a developer.  Nevertheless, environmental studies have been completed on every property prior to acquisition, in order to assess risk and cost to the greatest extent possible.  Where applicable, sellers have been asked to accept some financial responsibility for contamination caused during their occupancy.

Cleanup Plans

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:

  1. removal of contaminated soil or water,
  2. physical separation (vertically or horizontally) of areas of remaining contamination from areas of development,
  3. venting of hazardous gases into the atmosphere, and/or
  4. restrictions on access to contaminated areas.  The appropriate plan is based on the exact nature and location of the contamination, the surrounding soil and water conditions, and the proposed developments.

West Side

Several cleanup options were considered based on their cost, time to implement, effects on surrounding areas during cleanup, and extent of “legacy” issues for nearby developments.  Since adjacent uses are residential, the City has proposed an aggressive remediation plan that leaves the fewest long-term monitoring and management issues.  PCA reviewed and approved a conceptual Response Action Plan.  An updated version of this plan is currently under review by the agency, after adding new test results and a modified site plan.  Given the proximity of proposed residential townhomes and condominiums, extremely high standards must be achieved.

Exchange-Homes.jpg

On the land to be developed as the second phase, contaminated soil will be totally removed down to the water table and approximately two feet below.  In some areas, excavation will go even deeper to eliminate unstable subsoil conditions. The contaminated soil will be taken to an approved landfill out of the area.  Peat, muck, and similar structurally unsuitable (though not contaminated) soils will be moved to the northern “point” of the west side.  This area will not be excavated nor built upon, because costs exceed the potential benefits of development here.  The grade will be raised, consistent with development plans for the area.

The second phase will end up separated by at least 100 horizontal feet and ten vertical feet from any remaining contamination.  City water will supply the area from elsewhere, so groundwater will not be disturbed.  Any residual migration of contamination from the northern area will be intercepted by vent stacks running from under the buildings up through the roofs.

Again, the details of these plans are subject to final approval by PCA, but the basic elements are expected to be as described.  (Things like the specific design of systems, frequency of testing, etc., must be addressed.)  The expected cost of this remediation work is about $6 million.  The City has already secured $1.9 million from the state and Metropolitan Council to assist in paying for the cleanup.

East Side

The projected cost of totally removing the dump material (approximately $50 million) is prohibitive, so the plan is to manage the dump in place.  First, the soil cover placed over the dump for the City’s former golf driving range will be peeled back.  The western edge of the dump material will be removed, so that none is within 200 feet of proposed residential uses.  This material will be consolidated into the heart of the dump.  After the area is reshaped, a special membrane will be laid over the dump to collect the soil gases.  Around the edges, venting will be installed on the perimeter of new buildings to intercept residual gases, and systems will also be required within the structures.

The total cost of these systems is estimated at approximately $10 million, depending again on PCA’s specific requirements.  A conceptual Response Action Plan was previously submitted and approved, and updates will be prepared once specific site plans are proposed.  Staff will also submit funding applications for the east side at the appropriate times.

Development Reports

To keep citizens up to date on progress in the New Brighton Exchange, the Community Development Department is posting a report on monthly activities.

2016

Winter

2015

Spring

2014

Fall

2013

Summer
Winter

2012

Spring
Fall

2011

Spring
Summer
Fall
Special Report

2010

August
Fall
December

2009

February
March
April
May and June
August and September
October and November

2008

June
July
August
November
December