Adopting a Resolution authorizing the submittal of a Contamination Cleanup Grant application to the Minnesota Department of Employment and Economic Development for The Commons at Bear Creek project

Lincoln Avenue Communities is developing The Commons at Bear Creek, which will provide 149 affordable rental units through the Low-Income Housing Tax Program. The development is located along the south side of 4th St SE, just east of Cascade Creek. The apartments will serve households earning between 30% and 70% of the Area Median Income. Following the commencement of construction, previously unknown environmental contamination was identified on the site, which requires additional remediation in order to allow the property to be safely redeveloped for residential use. Management and removal of impacted soils and the implementation of appropriate vapor mitigation measures need to be installed. The Department of Employment and Economic Development (DEED) has a grant program that helps communities pay for assessing and cleaning up contaminated sites for private or public redevelopment.

DEED awards amounts up to 75% of the costs to investigate and clean up polluted sites through a competitive grant process. Since eligible applicants for the program are statutory or home rule charter cities, economic development authorities, housing and redevelopment authorities, counties, or port authorities, the City needs to be the applicant and not Lincoln Avenue Communities on the grant application. If successful in receiving a grant, Lincoln Avenue Communities will provide the matching funds necessary for the grant.

Phase I and II Environmental Site Assessments have been done on the site as well as the development of the Response Action Plan (RAP) for the site. Based on the work completed to date by Lincoln Avenue Communities along with their consultant, Braun Intertec, the total cost for the cleanup is estimated to be $868,873. However, as costs for the vapor mitigation system and soil backfilling are still being reviewed, the cleanup costs are likely to increase.

The City has been successful in being awarded Contamination Cleanup Grants. Projects that have received a DEED grant in the last 10 years include:

Civic Center North 

Broadway at Center

1st Avenue Flats

Urban on First

Bryk Apartments

The deadline for submittal of an application is November 1st. Lincoln Avenue Communities, along with their environmental consultant, is completing the application and will submit it by the November 1st deadline. If the application is successful, the City will enter into a grant agreement with the State. During the grant period, the City team will be involved with annual grant reporting and the release of funding.

DEED's Contamination Cleanup Grant Program helps communities pay for assessing and cleaning up contaminated sites for private or public redevelopment. With the historic uses on the site, the site is a good candidate for an evaluation of environmental impacts.

December 9, 2024: Council Meeting - Preliminary approval of conduit revenue bonds

July 7, 2025: Council Meeting -Purchase agreement for the conveyance of a portion of City land

May 4, 2026: Council Meeting - Approved the issuance of Conduit Multifamily Housing Revenue Bonds

May 4, 2026: EDA Meeting - Establishment of Tax Increment Financing District # 88-1 and approval of Development Assistance Agreement

Matching funds required for the grant will be paid by Lincoln Avenue Communities.

No alternative action is suggested at this time.