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HomeMy WebLinkAbout2010/11/01 - ADMIN - Minutes - City Council - Study Session I/I St. Louis Park OFFICIAL MINUTES MINNESOTA CITY COUNCIL SPECIAL STUDY SESSION ST. LOUIS PARK, MINNESOTA NOVEMBER 1,2010 The meeting convened at 6:30 p.m. Councilmembers present: Mayor Pro Tern Susan Sanger, Phil Finkelstein, Anne Mavity, Paul Omodt (arrived at 6:55 p.m.), and Sue Santa. Councilmembers absent: Mayor Jeff Jacobs and Councilmember Julia Ross. Staff present: City Manager (Mr. Harmening), Community Development Director (Mr. Locke), Economic Development Coordinator(Mr. Hunt), and Recording Secretary (Ms. Hughes). Guests: Chris Thompson(AMEC Geomatrix, Inc.) and Sarah Sonsalla(Kennedy and Graven) 1. Environmental Investigation and Property Acquisition Update—7015 Walker Street (former Reynolds Welding Supply property) Mr. Locke presented the staff report and a summary of the findings of the Phase I and Phase II Environmental Site Assessment (ESA) prepared by AMEC Geomatrix. He then introduced Mr. Chris Thompson with AMEC Geomatrix and Sarah Sonsalla, outside counsel with Kennedy and Graven. Mr. Hunt stated that if there is Council consensus to move forward with the purchase of the property, staff will work with Mr. Thompson to enter the subject property into the MPCA's Voluntary Investigation and Clean-up Program (VIC) prior to purchase. He added staff would also work with the property owner to obtain a Certificate of Property Maintenance and then schedule a closing date toward the end of the year. Mr. Thompson explained that the VIC program along with the Land Recycling Act provide the statutory liability protection for a voluntary purchaser of property. He stated that they have performed the Phase I and Phase II Environmental Site Assessments (ESAs) and while the MPCA staff has not yet seen the ESAs, the City has been thorough in looking for identified releases, i.e., chemicals or metals in the soil in order to obtain a No Association determination to the identified releases. He stated that it is not a matter of being approved into the VIC program, but rather, the City applies to the VIC program for their technical assistance, they review the Phase I and Phase II reports, and the City provides VIC staff with a history of the property, noting potential chemicals affecting the site, noting identified releases, and noting the chemicals identified in the soil. He indicated that if the City requests the MPCA's technical assistance and agrees with the contents of the reports, the City will get the No Association determination because it did not previously own the property. He further explained that there are volatile organic compounds (VOCs) at this site that are likely derived from use of the site. He indicated that there have been multiple uses of this site that likely used chlorinated solvents; the concentrations in the soil and groundwater are not suggestive of significant impacts at the site. He stated that there have also been impacts in the groundwater that are likely due to other sites away from this property, including the National Lead and Reilly Tar sites. He advised that in AMEC's opinion, this is not suggestive of a source on this site, even though it has been acknowledged that there was a machine shop on this site at one time. He stated that the plan is to obtain MPCA buy-in, prior to closing, that all appropriate inquiry on this site has been performed and that the City has identified those chemicals of concern. Special Study Session Minutes -2- November 1, 2010 Mayor Pro Tern Sanger asked what would happen if another contaminant is identified after the closing that is not one of the contaminants identified up to now in the process. Mr. Thompson stated that there is no reason to believe that anyone will be looking for additional contaminants and if there are other contaminants identified that are due to someone else's operation, e.g., across the street, then those contaminants would be someone else's responsibility. Ms. Sonsalla advised that if additional contaminants are found on the site, there could be clean- up costs attributable to the City. She indicated that there could also be natural resource damage if it is found that the property was causing damage to other sites, resulting in liability. She explained that by going through the VIC program, under the statute the City would not be responsible in the future for any natural resource damage to other sites. Councilmember Santa requested confirmation that there would be no liability on the part of the City even if contaminants were not found until after the purchase of the property. Ms. Sonsalla confirmed that this was correct. Mr. Thompson stated that from a legal standpoint, the most important component is meeting the "all appropriate inquiry" standard and ensuring that the City conducted all due diligence for the site, including history, ownership, title to the property, and whether there are environmental needs on the site. He added that this all appropriate inquiry was conducted during Phase I and provides the City with protection as an innocent landowner. Ms. Sonsalla added that even if the City did not enter the VIC program, the City still qualifies as an innocent landowner under the statute. Councilmember Mavity asked if this transaction represents standard procedure for the City. Mr. Hunt replied in the affirmative, adding that the City underwent a similar procedure for the American Inn and Dworsky properties. Mayor Pro Tern Sanger expressed concern that in the past, the City thought it had conducted all appropriate inquiries for a property and identified all contaminants, and it turned out that additional contaminants were identified and a lawsuit followed. She asked what kind of protection the City has for avoiding this occurrence. Ms. Sonsalla replied that the City's protection lies in entering the VIC program and in obtaining the No Association determination. She added that a lawsuit would determine who is responsible for clean-up of a site. Councilmember Finkelstein requested that the closing be contingent on the City enrolling in the VIC program and that the closing be contingent on the City's receipt of the No Association letter. He also requested that the City obtain an opinion letter from outside counsel stating that all due diligence has been conducted for this transaction and that the City can proceed with the purchase of the property. Ms. Sonsalla was amenable to preparing an opinion letter for the City stating that under the statute, if the City obtains the No Association determination, the City is protected from liability; Special Study Session Minutes -3- November 1, 2010 the opinion letter would also state that if the City is unable to obtain the No Association determination, the City would still qualify as an innocent landowner pursuant to the statute. Mr. Thompson stated that staff would have to clarify whether the City must first obtain ownership of the property before receiving the No Association letter. He added that as a voluntary purchaser of the property and assuming the City did not operate on it at any time prior to purchase,the City will get the No Association letter. Mayor Pro Tem Sanger asked who would be responsible for the cost of any clean-up. Mr. Thompson explained that the No Association letter means that the City is not liable for the cost of any clean-up, but the City is still responsible for dealing with impacts on the site; in other words, the No Association letter breaks the chain of liability from past owners to the City under the Land Recycling Act. Mr. Locke stated that by the City purchasing this property, the City does not take on any liability for the contamination; if something is a real threat, the MPCA would look to the former owner for remediation. He indicated that the City will have to deal with it at some point and that is laid out in the VIC program; in this case, at the point that the property is reused, clean-up of any contamination on the site would occur and there are a number of ways to get that done, including environmental grant programs and tax increment dollars. He added that the City takes responsibility for the site, but is not on the hook for the costs of clean-up. Councilmember Finkelstein noted that though the City does not want to get into the business of purchasing private property, the proposed purchase makes sense; particularly in light of the work at Highway 7 and Louisiana Avenue in addition to the storm retention pond. This was a tired area and it certainly met the criteria. Mayor Pro Tern Sanger questioned the economic benefit to the City of purchasing the property. Mr. Hunt stated that the purchase price for the site is $260,000 and short term costs identified to demolish the building are approximately $65,000. He stated that the clean-up costs are estimated at $262,000 and the City would seek grant assistance for the long-term clean-up costs. He added that the County could likely fund these costs. He noted that it is proposed that the site be acquired for blight removal purposes and stormwater retention related to the developments north of the site. Mr. Locke explained that by purchasing this property, the City would remove the old building without having to deal with the environmental issues, thus improving the appearance of the site by removing the blight. He added that the City has an opportunity to purchase the property at a reasonable price and could resell it at a later date. Councilmember Santa stated her belief that it makes sense for the City to take control of this property because the entire area is tired and is challenged with poor soils and questionable groundwater. She stated it makes sense for the City to step forward no matter what happens in this area in the future. Councilmember Mavity agreed with Councilmember Santa and stated she did not want to see the suggested conditions to closing become an obstacle to the City's purchase. She added that in the Special Study Session Minutes -4- November 1, 2010 past, the City has done a good job as it relates to environmental concerns and the City should proceed with the purchase of this site. Councilmember Omodt agreed with Councilmembers Mavity and Santa. He added that if the City can take control of the property and clean it up to City standards, the City should clean it up sooner rather than later. It was the consensus of the majority of the City Council to direct staff to proceed with the acquisition of 7015 Walker Street. The meeting adjourned at 7:16 p.m. Written Reports provided and documented for recording purposes only: 2. Hwy 7/Wooddale Project Update NancyStro�y Clerk Jef' 4 ars, ayor