Minnesota Lawyer
The Metropolitan Council’s transit-oriented development office has decided that a massive redevelopment of the Snelling Avenue “superblock” along the Green Line in St. Paul is unfeasible at this time.
The Met Council owns a nearly 10-acre former “bus barn” site between Interstate 94 and the Green Line in St. Paul, which it aimed to combine with the Midway Shopping Center for a transit-oriented development project.
The council, along with the city of St. Paul and the shopping center owner, hired Colorado-based consultants Urban Investment Group LLC to analyze development scenarios for the 35-acre site, often called the Snelling “superblock” or “SmartSite.”
But the analysis, released last July, showed wide gaps between the cost of infrastructure – mainly structured parking – needed to support development and the current value of the land.
The results of the consultants’ analysis were “not what we had hoped,” Lucy Ferguson Galbraith, director of Metro Transit’s Transit Oriented Development Office, said Wednesday at a Met Council meeting.
For that reason, Galbraith said it no longer seems feasible to pursue “sole-source disposition” of the property to achieve a transit-oriented development project rather than a competitive bidding process for the land.
In a sole source scenario, under Federal Transit Administration guidelines, the Met Council could make the land available for development without a competitive process if it was justified as a “unique” service or benefit. Under the consultants’ recommendations, the Met Council would have transferred ownership of the site to RK Midway LLC, which owns the shopping center, as a master developer to meet the transit-oriented development goals.
“We really could not say that we had a strong case … that what we could do with sole-source disposition would result in a very strong development here,” she told the Met Council.
Throughout the three phases of development, there’s a $23 million to $29.8 million gap between the infrastructure needed and the current value of the land. The majority of the infrastructure is more than $40 million for structured parking costs – which Galbraith noted was a reduced estimate.
“I find it a tad ironic that one of the cost drivers is parking and we’re talking about a transit-oriented site,” said Met Council Chair Adam Duininck.
Beyond the light rail stop, the site will be served by the A Line, an arterial bus rapid transit route linking Minneapolis, St. Paul and Roseville largely along Snelling Avenue.
While the parking aspect could be re-examined, Galbraith said that it would be challenging to reduce the amount of parking and still be able to finance the project.
Instead of the sole source plan, staff members will prepare for a competitive procurement process for its site, which is behind the shopping center at the northeast quadrant of I-94 and Snelling Avenue. The first step will be analyzing the site’s development potential on its own.
“It had always been thought of in the planning as being part of this superblock,” Galbraith said. “There’s been no separate look at what could be developed if you were just doing this [on] slightly less than 10 acres.”
RK Midway owns the majority of the land in the superblock. The consultants’ report indicated a larger redevelopment project made more sense because the Met Council property is farther away from the transit line than the shopping center and is less valuable.
“We strongly believe that without being integrated with the RK Midway property as part of a comprehensive redevelopment, the Bus Barn site’s value and potential for TOD would be greatly diminished due to its size, location relative to the transit stations, and lack of direct connection to University Avenue,” the consultants wrote in the report.
A representative for New York-based RD Management, RK Midway’s parent company, did not return a request for comment on Thursday.
Though the Met Council cannot issue a request for proposals on the land it doesn’t own, council member Harry Melander, who represents most of Washington County, emphasized the long-term redevelopment potential for the site.
“If we could have a long-term vision, it’d be great for the region,” he said.
Galbraith said the real estate office would be open to responses from the shopping center owners and other ideas, but at this point they do not have a “feasible plan” for the entire superblock.
The city of St. Paul is optimistic that a larger redevelopment project is still in the cards. St. Paul planning director Donna Drummond said Thursday she’s “hopeful” that interested developers will have conversations with RK Midway for a more coordinated development.
“In the end, it’s possible there will be one ownership group or partnership that can move forward on the whole 35 acres,” Drummond said. “We will just have to see what happens in response to the RFP.”
