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Home My WebLink About2.b. UMore Utilities EXECUTIVE SUMMARY City Council Work Session Meeting: December 7, 2015 AGENDA ITEM: UMore Utilities AGENDA SECTION: Discussion PREPARED BY: Kim Lindquist, Community Development Director AGENDA NO. 2.b. ATTACHMENTS: Utility Plan APPROVED BY: ddj RECOMMENDED ACTION: Discussion Item SUMMARY Staff has worked over the last several years with the representatives from the University of MN to facilitate urbanized development on the property. Most recently, the University issued an RFP for development of 158 acres in the far NE corner of the site. The intent was to have a private developer propose on the site to develop future industrial development. Only one proposal was received which was rejected by the University. More recently, the University representative has been working with a private development company to come to an arrangement to purchase the same 158 acres over time, marketing the property for industrial growth. The development company is a build-to-suit company, works in this market, and has the wherewithal to attract larger users to the site. The discussion for tonight is to review the utility issues associated with the development of UMore in the NE, and receive an update from the University about timing. UTILITIES Some time ago, WSB conducted a utility study to determine what utility enhancements would be necessary to provide adequate public utilities to five different areas within the UMore land. The five areas were chosen by the University representatives and included four residential areas and one industrial area. Area 5 was along the mining buffer in the west, Area 1 was on the western side of Akron Avenue, Area 2 included commercial and industrial land in the NE and Areas 3 and 4 were located south of DCTC. It was found that Areas 3 and 4 were not suitable for development at this time and have been excluded from future consideration. Areas 5, 1, and 2 would allow some development but additional infrastructure improvements would be needed. Area 2 in the northeast is not currently served by any sewer or water and significant investments would need to be made. These enhancements are typically paid for through a combination of public and private funds. The City would pay for the trunk facilities and the developer or land owner would pay for the localized benefit. Roadway upgrades are also the cost of the adjoining land owners, which in this case would be the University. The watermain will need to be extended east along County Road 42 from its current terminus near DCTC to bring water to Area 2-the industrial area. It is estimated approximately 360 acres can be served by this water extension. Because this is not the typical development pattern the City would encourage; piping along County Road 42 which doesn’t provide as much lateral benefit, most of the cost for this extension would typically be paid by the developer/land owner. 2 Similarly, the NE area of UMore has no sanitary sewer service. This will require significant infrastructure installation as a lift station will be necessary to bring service to the area. The lift station will be needed for the original 158 acres proposed by the UMore and also the 360 acres envisioned in the Utility Study. The lift station will provide service beyond the 360 acres and many other acres within the UMore property will benefit from its installation. Typically, the City pays for trunk infrastructure and facilities such as a lift stations and force mains through the core funds since there is regional benefit. Additional extensions from the trunk facilities are paid for by the developer or land owner. Staff is recommending that the City pay the cost of the lift station and a portion of the watermain extension. As mentioned above, most of these costs would be considered trunk facilities and would be paid for through the core funds. Additionally, staff would expect some additional cost participation for the extension of the watermain. The extension was not initially envisioned as proposed but is necessary to service the designated industrial area. Given the strong interest in facilitating development on the UMore property, some additional financial support would seem to be warranted. The City receives revenue in the core funds through area charges. In this instance the development of the 160 acres will not cover the infrastructure costs. Because the University cannot legally be assessed, staff is recommending the City enters into an agreement with the University that will require they reimburse the City for infrastructure costs should additional development not occur. In other areas of the community, we could assess properties benefitting from the infrastructure improvement even if they were not developed. The agreement would allow the City to recoup costs in the future should further development not occur. The costs below are based upon 2012 construction numbers which have been increased to project anticipated 2015 costs. Additionally, a 35% allowance was added for soft costs associated with the infrastructure project. The infrastructure costs noted below are rough preliminary estimates. Given there is no firm timeline for installation, staff does not anticipate reconciling the cost estimates until nearer to the construction time period. Infrastructure installation is dependent upon a large user deciding to develop on the UMore site. At this time staff wanted to give the Council an update on the status of potential development at UMore and also a flavor of the discussions about infrastructure cost. The table below provides an itemized listing of costs associated with development of the entire 160 acres. These costs include City, County and Met Council fees. Amount/ Length Unit COST Umore Cost Project Cost City Cost Total Cost Park Dedication $9,000 per acre $1,440,000 $0 $1,440,000 $1,440,000 Sewer Trunk Fee $1,075 per acre $172,000 $0 $172,000 $172,000 SAC Met Council*$2,485 SAC City *$1,200 Stormwater Trunk Fee $6,865 per acre $1,098,400 $0 $1,098,400 $1,098,400 STAAC *$2,270 per acre $363,200 $363,200 $363,200 Water Trunk Fee $6,500 per acre $1,040,000 $0 $1,040,000 $1,040,000 Water Access Charge* $9800 to $44,105 meter size dependent on meter size Extra 16" Water Line per foot $2,233,231 $2,233,231 $0 $2,233,231 Lift Station Installation/Force Main $1,647,953 $1,647,953 $0 $0 $1,647,953 $1,647,953 Blaine Avenue $900 per foot $2,376,000 $1,188,000 $1,188,000 $2,376,000 Southern East-West Collector $0 per foot $0 $0 $0 * paid at time of bldg permit $10,370,784 $3,421,231 $5,301,600 $1,647,953 $10,370,784 TOTAL UMORE Estimated Development Costs 3 The table below illustrates the breakdown of costs associated with infrastructure necessary to provide service to the NE portion of UMore. The table shows the rough breakdown in costs between the City and UMore and the Project. The issue of who is responsible for the “non-city” costs is really a negotiation between the land owner and the developer. Staff is providing the table to indicate the total cost of infrastructure installation which differs from the table above which also includes required fees. Amount/ Length Unit COST Umore Cost Project Cost City Cost Total Extra 16" Water Line per foot $2,233,231 $2,049,606 $0 $183,625 $2,233,231 Lift Station Installation/Force Main $1,647,953 $1,647,953 $398,953 $0 $1,249,000 $1,647,953 Blaine Avenue $900 per foot $2,376,000 $1,188,000 $1,188,000 $2,376,000 Southern East-West Collector $0 per foot $0 $0 $0 $6,257,184 $3,636,559 $1,188,000 $1,432,625 $6,257,184 Umore Estimated Development Costs; New Infrastructure ONLY CONCLUSION Staff wanted to walk the Council through the potential infrastructure financing scenario. Typically, staff has not supported “leapfrog” development which would have required significant infrastructure investment in the first phase of development. Development on the UMore property will not permit incremental utility extension, particularly when facilitating industrial development in the NE. Final costs will be determined prior to infrastructure installation, but staff wanted the Council to understand the magnitude of the financial commitment. i t c Water Main Extensions Per Comprehensive Water System Plan Necessary to Serve i fo eDeveellopm nt with All Otheent. New rlAreasssary 52 i Temporary e Extension from — T- West Pressure Zone77 Water Main Extensions Per Comprehensive Water Main Extensions Per Comprehensive Water System Plan Necessary to Serve L Water System Plan Necessary to Serve Area 5 Development.New Well Necessary 380 Acres of Area 2.New Well Necessary for for Development with All Other Areas. Development with All Other Areas. Area 5 i IY Area-1 Area 2 I Q r w Y 1 20 Gross Acres of Area 2 Requires New i Area 3 Water Tower or 20"Main Along CS 42 East LFYI from PRV to Supply Fire Flow.The Area Shaded t Provides Fire Flow Less Than 3,000 GPM. r--- Area 4 t Water Main Extensions Per Comprehensive iWater System Plan Necessary to Serve Water Main Extensions Per Comprehensive a I Area 4 Development.New Well Necessary Water System Plan Necessary to Serve t for Development with All Other Areas Area 3 Development New Well Necessary t j - for Development with All Other Areas. Lec 4 ROSEMOLINT N Water Tower 18"Main r Well 16"Main MINNESOTA W I: West Pressure Zone 12"Main More Development Utilities Evaluation s East Pressure Zone B"Main Figure 4: Water Service to Final WS 0 1,500 3,000 6,000 6"Main or Smaller Development Areas Feet Note:Thin Lines are Existing Wider Lines are Future f 73 Area 1 Served by 24"Along Akron Ave and Connection to MCES Empire Interceptor. i I 1 52 MCES Empire Interceptor MCES L74 MCES L75 I MCES Rosemount Interceptor to be Removed. I W I 1 Area 5 MCES Empire Interceptor Force Area 1 Main DArea2 ischarge Location Area 5 Served by Gravity Flow to Empire Lift Station Interceptor. Ar a•3 JA,ea 2 Served with 865 GPM Lift Station, ately Increased to 1,700 GPM Capacity. Area 4 Area 3 Served with 495 GPM LiftUltimatelyIncreasedto2,000 GP Area 4 Served by 10"and MCES Flow Meter 1641 18"Flowing to Area 3 MCES Flow Meter M655 14 ROSEMOUNT N MINNESOTA Legend W More Development Utilities Evaluation Existing —8" 10"Force Main —15" 24"Figure 7: Sewer Service to Final 4"Force Main ---8"Force Main —12" 18" Wore Development Areas W$B Development Areas 0 1,500 3,000 6,000 6"Force Main 10" 12"Force Main—2t" Feet