EPA grant could prepare quarries, other parcels for redevelopment

Mark Fischenich
The Free Press, Mankato, MN
Date: January 21, 2017

MANKATO — From the former quarries along the Minnesota River, through downtown Mankato and along the Sibley Parkway, up to 10 potentially contaminated sites could find an easier path to redevelopment under a federal grant being sought by the city.

The application for an Environmental Protection Agency grant, if successful, would provide up to $300,000 to investigate for pollution on so-called brownfields — mostly in the oldest portion of Mankato. Without that sort of investigation, developers tend to shy away from purchasing and building on properties that have a history of industrial uses or possible chemical contaminants.

“We’ve found that having those answers upfront can really speed up the redevelopment process,” said Kristin Prososki, economic development specialist for the city of Mankato.

Residents don’t need to look far for examples. The Children’s Museum of Southern Minnesota, the Performing Arts Center attached to the civic center, the Tailwind office and commercial development on South Front Street, and the small commercial building that replaced an abandoned convenience store across from The Y — all happened after grant funds investigated the potential environmental pitfalls on the sites.

Developer Kyle Smith of the Tailwind Group was involved in projects on both ends of the scale. Tailwind remodeled and slightly expanded a long-vacant Super Shop convenience store into a small three-tenant commercial building when grant funds showed that the site wasn’t contaminated with leaking petroleum products. And Tailwind made one of the biggest private investments in downtown Mankato in decades with the three-building South Front Street project after clean-up funds subsidized the cost of removing tons of contaminated earth.

“Without some of those matching funds, the deals just don’t get done,” Smith said. “Because the economics just don’t work.”

Previous projects relied on state funding, mainly through the Department of Employment and Economic Development and the Minnesota Pollution Control Agency. The latest application is for federal funds through the EPA’s brownfields assessment grants program.

Mankato made an application a year ago for a piece of the $55 million in funding available nationwide but wasn’t one of the 131 communities selected. The agency provided feedback on Mankato’s unsuccessful application, including suggestions that the city provide more specifics about possible redevelopment sites, and Prososki is more optimistic about the city’s chances this year.

The new application specifically mentions the Coughlan quarries — one just east of Riverfront Park and another off of Third Avenue just south of Highway 14 — which have an assessed value of $1.1 million.

The Coughlan family last year announced it was interested in offering the depleted quarries for redevelopment, likely including public uses such as parkland. The potential of the 86 acres of quarry land — complete with rock cliffs up to 60 feet high and riverside landscapes in the heart of the city — sparked the imagination of area residents, who have suggested everything from a new county fairgrounds to a baseball park to a high-tech industrial park.

Dreaming can turn into planning more easily if it’s determined that the land is free of major contaminants. The EPA funds could finance soil borings and other testing, along with creation of a plan to address any pollutants found, Prososki said.

“There can still be surprises (during the redevelopment process), but it minimizes them,” she said of the assessments.

The Coughlans’ willingness to redevelop the land is a critical component for the brownfields assessment grants.

“It’s done on a voluntary basis when a property owner is on board,” Prososki said.

If the grant dollars are awarded, any other willing landowner could also participate. Prososki estimates the grant could fund Phase One assessments for as many as 10 properties, which would involve a thorough search of the historic uses of the land to identify past businesses that may have utilized toxic chemicals.

If the Phase One assessment suggests potential pollutants, the grant funds could finance roughly six Phase Two assessments involving soil borings and other testing. The funds can also be used for assessments on older buildings for items of concern such as lead-based paint and older light fixtures that could contain mercury or PCBs.

Even a full $300,000 grant won’t address all of the potential sites in the older parts of Mankato, but it would make a substantial dent in them — particularly considering the number of properties already tackled in the past five years.

“It takes years to get these sites fully redeveloped, decades even,” Prososki said. “But it would be a really great start.”

Solid information about the environmental problems — or lack thereof — can definitely make a difference in the pace of redevelopment. The tax-forfeited Super Shop convenience store sat vacant for years, even though buyers were interested in the parcel at the heavily traveled intersection of Riverfront Drive and Highway 169/60 across from The Y.

When it first went up for auction, no one bid.

“The three parties that were interested were concerned about the tanks,” Prososki said of the buried fuel tanks.

Then came the government-funded testing, a clean bill of environmental health and the purchase and redevelopment by Tailwind. The building is now home to real estate, financial advising and weight-loss businesses.

The Front Street development by the same firm resulted in more than $20 million in private investment downtown but only after the environmental problems with the site were identified and the subsidized clean-up occurred. The site provided almost a complete checklist of some of the worst possible previous uses — railroad siding, dry cleaners, foundry, underground storage tanks … .

And the investigation found significant pollutants in significant quantities. Immense amounts of soil were hauled from the site before construction could begin.

“That’s got to be one of the largest clean-ups Mankato has done,” Smith said.

The Tailwind Project, which brought hundreds of jobs downtown and contributed to the wider revitalization of South Front Street, wouldn’t have happened if the public assistance with the environmental costs hadn’t been available, Smith said.

Developers recognize that greenfield sites — farm land on the edge of town — offer a much less complicated place to construct a new building. But it’s good public policy for the city, state and federal governments to promote reuse of brownfields in the city core where streets, utilities and other services are already in place, Prososki said.

And the revitalization of the city core has brought momentum that makes the private sector even more interested in investing downtown.

“It’s really made it an attractive place where businesses want to locate,” she said.

Smith agrees: “Right now, it appears to be pretty trendy.”

So if the tenants want to be downtown, or in Old Town, or in a former quarry, or along the Sibley Parkway — which is undergoing a transformation from industrial to office/residential — developers are going to be more willing to tackle the complexities of brownfield redevelopment.

“As big as the challenges might be, there’s a bigger opportunity,” Smith said.

The fate of the EPA grant application is expected to be known sometime in May. One major brownfield redevelopment that won’t be benefiting from the grant is the former city public works department site just north of Cub Foods West along the Sibley Parkway.

The City Council is eager to redevelop that four-acre property and didn’t want to await the results of the EPA grant process. Instead, the city has agreed to finance the environmental assessment with hopes of seeking private redevelopment proposals later this year.