A preliminary development agreement for a detached townhome project on the bulk of the city-owned Port Riverwalk property on the south side of Coon Rapids Boulevard was approved unanimously by the Coon Rapids Housing and Redevelopment Authority Feb. 21.
The action by the HRA, which comprises the seven members of the Coon Rapids City Council, followed a council work session Feb. 14 where Coon Rapids-based Centra Homes presented a concept plan for some 110 townhouses.
There was consensus by the council to move forward by continuing discussions with Centra Homes and entering into a preliminary development agreement.
According to Matt Brown, city economic development coordinator, the agreement allows Centra to begin preliminary engineering, wetland delineation, soil borings, environmental investigation and other work needed to determine a land sale price and the need for public financing.
The agreement does not obligate the HRA to sell the property to Centra, but it does give Centra exclusive rights to work with the HRA until Aug. 31, 2017, Brown said.
During this time, the city will negotiate purchase and redevelopment agreements, which would set out the terms of the project and city financial assistance, to be considered by the HRA at a later date, he said.
“Staff believes that this project is feasible,” Brown said.
The agreement covers all but about five acres of the 35-acre Port Riverwalk site, located east of Egret Boulevard, which was formerly home to the Coon Rapids Shopping Center and adjacent businesses.
According to the agreement, the remaining five acres will be kept by the HRA for future high-density residential and limited commercial development.
This would be located on Coon Rapids Boulevard in the middle of the site, said Grant Fernelius, city community development director.
At the work session, Brown, Fernelius, Centra Founder and President Dale Wills and Centra Chief Financial Officer David Pattberg gave the council members information on the scope of the project, infrastructure needs and possible city financial assistance.
Half of the proposed 110 units of owner-occupied, detached townhomes will be one-level and the other half two-level with sales of about 25 units a year leading to a build-out over a few years.
According to Pattberg, the single-level townhouses would be 40 feet wide on 50-foot wide lots, while the two-level townhouses would be 30-foot wide on 40-foot wide lots with some 2,000 square feet of living space, four bedrooms and 2 1/2 bathrooms.
“The ramblers will be geared to empty nesters and the two-story homes to first-time homebuyers,” Pattberg said.
The project would be similar to Centra’s development in New Hope, which is 80 percent sold, where the city acquired an old school site for redevelopment, Wills said.
“Centra is very excited by the Coon Rapids project because this is where our home is,” he said.
Existing infrastructure in the Port Riverwalk area is anticipated to change with this project, according to Brown.
The frontage road on the south side of Coon Rapids Boulevard would be removed – the existing sidewalk/trail would remain and be reconstructed – and replaced by a continuous street from Egret would link up with East River Road to the east and while the existing street grid neat Avocet and Bluebird streets would be reconfigured, the alignment of East River Road east of Avocet and Zilla streets would remain in roughly its present location, according to Brown.
Because this development will require more public infrastructure than a typical detached townhouse project, gap financing will likely be required, Brown told the council.
“We expect city financial assistance will be needed,” Fernelius said.
The gap is estimated at this time to be in the $1.5 million to $2.5 million range with the city using cash balances from current tax increment financing districts earmarked specifically for streets and other public improvements, Brown said.
In addition, the Port Riverwalk site is located in a redevelopment TIF district, which was put in place in 2006 after the old buildings were demolished and runs until 2033, but the city has had special legislation introduced at the 2017 Minnesota Legislature to extend the district to 2040, he said.
“Staff estimates that the detached townhomes as currently proposed would generate at least $1.5 million in TIF provided the extension is granted,” Brown said.
The TIF extension was part of the omnibus tax bill passed by the 2016 Minnesota Legislature, but vetoed by Gov. Mark Dayton because of a wording error, according to Fernelius.
Council Member Brad Greskowiak liked the proposed townhouse concept, but he wanted the trails on the site to tie into other existing trails, he said.
According to Council Member Brad Johnson, he also liked the plan, but remained concerned about linking trails across Coon Rapids Boulevard given the traffic and “threw out” looking at the possibility of a bridge or tunnel.
At a minimum, seconds should be added to the existing traffic signals at Coon Rapids Boulevard and Avocet because there will be seniors living in the townhomes, Council Member Jennifer Geisler said.
Council Member Bill Kiecker was in favor of moving forward with the project, but wanted to make sure that the units on the boulevard “would look nice,” while Mayor Jerry Koch was “cautiously optimistic” with moving ahead, he said.
Centra Homes was one of two housing developers chosen by the council in
March 2016 to redevelop Port Riverwalk.
The other, Plymouth-based The Beard Group, presented a concept plan for a 160-unit, three-story, market-rate apartment building with an underground parking garage and a mix of studio, one- and two-bedroom units at the west end of the site between Drake Street and Egret Boulevard.
But in September 2016, the Beard Group “backed off” on its apartment plan because the need for gap financing exceeded the amount of assistance the city could provide, but it may be willing to “resume the conversation” if the city’s TIF district expansion legislation becomes law, according to Fernelius.
The HRA purchased the Port Riverwalk property in the early-2000s for $16 million, demolished a dozen buildings and cleaned up contamination from a dry cleaning business as well as an illegal dump.
A housing redevelopment proposal by Rottlund Homes and Shamrock Development comprising 250 for-sale townhomes and a 60-unit senior housing building was approved by the council in 2007, but was never built because the housing market tanked with the onset of the recession.