BE IT RESOLVED, that the County Administrator be authorized to negotiate the following Environmental Response Fund grant agreements for the assessment and cleanup of contaminated sites, during a two-year period beginning on the date of execution:

• Agreement PR00001879 with the City of Minneapolis, in an amount not to exceed $100,000;

• Agreement PR00001880 with the City of Minneapolis, in an amount not to exceed $149,550;

• Agreement PR00001888 with the City of Edina, in an amount not to exceed $247,340;

• Agreement PR00001874 with the Hennepin County Community Works Department, in an amount not to exceed $300,000;

• Agreement PR00001877 with Twin Cities Habitat for Humanity or affiliated entity, in an amount not to exceed $97,183;

• Agreement PR00001873 with Lydia Apartments Housing Limited Partnership or affiliated entity, in an amount not to exceed $100,000;

• Agreement PR00001878 with the Minnesota Brownfields or affiliated entity, in an amount not to exceed $225,000;

• Agreement PR00001875 with the City of Minneapolis, in an amount not to exceed $134,431; and

BE IT FURTHER RESOLVED, that the County Administrator be authorized to negotiate the following Environmental Response Fund grant agreements for the assessment of contaminated sites, during a one-year period beginning on the date of execution:

• Agreement PR00001876 with Aeon or affiliated entity, in an amount not to exceed $40,800;

• Agreement PR00001889 with Honey Badger Acquisitions, Inc. or affiliated entity, in an amount not to exceed $163,000; and

BE IT FURTHER RESOLVED, that following review and approval by the County Attorney's Office, the County Administrator be authorized to sign the agreements on behalf of the county; that costs incurred by the grantees after the board approval date be eligible for reimbursement upon execution of the agreements; that the County Administrator be authorized to approve one 12-month extension of the agreements; and that the Controller be authorized to disburse funds as directed.

History: The Environmental Response Fund (ERF) helps revitalize sites by providing funding to assess and clean up contamination. The grants reduce barriers to site improvement or redevelopment caused by the added costs of environmental cleanup and lessen the risk to human health and the environment posed by the contamination.

Minnesota Statutes, sections 383B.80 and 383B.81, authorize the county to collect a mortgage registry and deed tax for the purpose of establishing an environmental response fund. The board established the ERF in 1997 (Resolution 97-06-410R1) and authorized the grant program in 2001 (Resolution 01-615).

Projects supported by ERF grants provide a variety of community benefits, including creating affordable and moderately priced housing, supporting economic development, developing green space, and making infrastructure improvements. Many ERF grants address environmental contamination in communities with significant disparities in health, including low income areas and communities of color. Some of these sites become a catalyst for new development in neighboring areas, which can help address racial disparities in housing, employment, and income.

As a major economic center for 150 years, the county has a concentration of contaminated sites. Much of this contamination was caused by chemical spills or improper disposal of hazardous waste prior to the existence of environmental regulations. These improper disposal practices of the past can still cause soil and groundwater pollution that present environmental risks today. 

Since 2001, the county has awarded 396 ERF grants totaling $55,999,787.

Current Request: This request is for County Administrator authorization to negotiate 10 ERF grant agreements during various periods, with the total combined amount not to exceed $1,557,304.

In August 2019, the county solicited proposals from municipalities and nonprofit and for-profit developers. In an effort to maximize collaboration between funders, the timing of the ERF grant round coincides with additional contamination cleanup grant programs administered by the Minnesota Department of Employment and Economic Development and the Metropolitan Council.

A committee reviewed the grant applications and recommended funding 10 of the 11 project applications received. Applications were evaluated on project need; degree of contamination; the appropriateness of the cleanup approach; creation or preservation of affordable and/or moderately priced market-rate housing; the creation of economic development; and the readiness of the project to proceed.

The fall 2019 ERF award recommendations are summarized as follows and are described in detail in the report, Environmental Response Fund fall 2019 funding recommendations.

ERF Projects:

• 1345 Minneapolis, Minneapolis - $40,800 for assessment costs associated with planning for the construction of an estimated 120 units of affordable senior housing. (Grantee: Aeon or affiliated entity)

• 14th and Central, Minneapolis - $100,000 for investigation and contaminated soil cleanup associated with the construction of a 175-unit affordable housing building, a 5,700-square foot industrial building, a public art gallery, and a playground. (Grantee: City of Minneapolis)

• Amber Apartments, Minneapolis - $149,550 for contaminated soil cleanup, asbestos abatement, and a portion of building demolition costs associated with the construction of an apartment building with 76 affordable and five market-rate housing units. (Grantee: City of Minneapolis)

• Amundson Flats, Edina - $247,340 for contaminated soil cleanup associated with the construction of 62 units of affordable apartments. (Grantee: City of Edina)

• Former Brooklyn Center Sears, Brooklyn Center - $163,000 for assessment costs in preparation for the planned construction of two light-industrial buildings. (Grantee: Honey Badger Acquisitions, Inc. or affiliated entity)

• Hennepin Lead-Safe Housing, countywide - $300,000 for continued assistance for a countywide program that performs assessment and abatement of lead-based paint hazards in homes with sensitive populations, such as pregnant women and children 6 years old or younger. (Grantee: Hennepin County Community Works Department)

• Leef Townhomes, Minneapolis - $97,183 for contaminated soil cleanup costs associated with the construction of 18 affordable townhomes. (Grantee: Twin Cities Habitat for Humanity or affiliated entity)

• Lydia Apartments, Minneapolis - $100,000 for contaminated soil cleanup and asbestos abatement costs associated with the renovation and expansion of the current Lydia Apartments from 40 to 80 units of affordable housing. (Grantee: Lydia Apartments Housing Limited Partnership or affiliated entity)

• Minnesota Brownfield Gap Financing Program, countywide - $225,000 to continue the Brownfields Gap Financing Program, which provides small environmental assessment grants to government entities and non-profit organizations. (Grantee: Minnesota Brownfields or affiliated entity)

• Stonehouse Square Apartments, Minneapolis - $134,431 for contaminated soil cleanup and asbestos abatement costs associated with rehabilitating 71 affordable apartments. (Grantee: City of Minneapolis)

This request also is for approval for grantees to incur costs after the board approval date, with reimbursements being paid upon execution of the grant agreements.

Impact/Outcome: The recommended ERF grant awards will fund asbestos and lead-based paint abatement and contaminated soil assessment and cleanup. This funding supports projects that create economic development by increasing the tax base, create permanent jobs, enhance green space, and create affordable housing. The recommended grants provide for the renovation or construction of an estimated 611 affordable housing units, 144 of which are considered Section 8 housing units. ERF grants help address environmental contamination in communities with significant racial disparities in health and support projects that help reduce disparities in housing, employment and income.