Arden Hills leaders say they've reached a deal with TCAAP developer

Nearly a year after an acrimonious legal battle seemed to indefinitely stall the development of the former Twin Cities Army Ammunition Plant site, Arden Hills leaders announced a breakthrough in negotiations.

The Arden Hills City Council approved a series of terms around financing and affordable housing with master developer Alatus for development of the 427-acre site rebranded Rice Creek Commons.

Now they need landowner Ramsey County to come back to the negotiating table, said Arden Hills Mayor David Grant.

"Rice Creek Commons can be a fantastic amenity to the northeast metro," Grant said. "It's a community that can be planned. It's literally a blank slate. We are hopeful that vision can be realized."

Ramsey County leaders, who unsuccessfully sued the city of Arden Hills to end its legal partnership to develop Rice Creek Commons, said they are waiting to take a look at the agreement. They learned about the deal Tuesday morning.

"While it would be premature to provide comment at this point, as the landowner we will be happy to do so once we have our questions about the agreement satisfied," county spokesman John Siqveland said in a statement.

According to a news release issued by Arden Hills, the city and Alatus agree to build 1,460 housing units on the site along with businesses, including office and retail. The city agrees that 326 units will be affordable. Twenty percent of the affordable units will be owner-occupied and 180 of the affordable units will be at 50 and 60% of the area median income (AMI) for Ramsey County.

The city agreed to $17 million in tax-increment financing for the developer.

In return, Alatus has agreed to privately finance the construction of a water tower as well as water and sewer utilities totaling $8.5 million. Alatus has also agreed to reimburse the city $1 million for planning costs and to build three new city parks valued at $14.5 million.

"This financing structure alleviates the city and its residents of a debt burden should the project stall due to unforeseen circumstances," according to the release. "Alatus has also agreed to fund city deficits on the project during the first five years should revenues not be sufficient to cover expenses."

Rice Creek Commons is the largest shovel-ready tract of land in the county and is equivalent in size to downtown St. Paul. What started out as an ambitious partnership between Arden Hills and Ramsey County to develop the property in 2012, codified by a power-sharing agreement, devolved into a yearslong battle.

The city of 10,000, where the property is located, wants no more than 1,460 homes. The county, which owns the property, wants as many as 2,500 homes with at least 20% of them affordable.

After years of negotiations ended in gridlock, Ramsey County leaders sued in 2019 asking the court to invalidate the joint powers agreement, arguing that the city had failed to negotiate in good faith.

Arden Hills, which fought to keep the power-sharing agreement intact, countersued arguing county leaders had also breached their duties and were intentionally skipping meetings.

Last June, Hennepin County District Judge Edward Wahl ruled that the power-sharing agreement signed in 2012 remains valid through its original end date of Dec. 31, 2038, unless both parties agree to terminate it early.

"When fully developed the project will also create an estimated 4,000 additional jobs and new commercial, retail and industrial development," according to the release. "The City hopes that Ramsey County will soon reach an agreement and sell the property to the developer to move this almost $1 billion development forward."