Construction could begin next year on the last of Hennepin County's six regional human service centers, because of a $54.5 million land-construction deal approved by the County Board.
On a split vote, the board agreed this week to buy a 6.5-acre parcel in Minneapolis, about 40 percent of which will be developed by the county. The county hopes to sell much of the property to developers for housing and businesses such as retail and restaurants. Because of the speculative portion of the deal, board Chairman Mike Opat and Commissioner Jeff Johnson voiced concerns and voted against it.
Commissioner Peter McLaughlin called the site, on the southwest corner of Hiawatha Avenue and Lake Street, "almost indisputably the best site for the hub." It sits alongside the Metro Transit Blue Line light rail.
The site is part of the county's long-standing plan for regional dispersal of services provided by its Human Services and Public Health Department. The plan moves those services out in all directions, away from the soon-to-be-closed Century Plaza in downtown Minneapolis. The goal is to put services where residents live rather than require them to travel downtown.
The county already has opened four service hubs: in Brooklyn Center, north Minneapolis, Bloomington and Hopkins. A center in northeast Minneapolis is under construction.
Initially, the county wanted to buy only the land needed for the Hiawatha-Lake service center, but the Minneapolis school district insisted on a deal for additional parcels, including the building the district owns at 2225 E. Lake St. That building is now home to the district's immigrant-focused adult education center, but once housed Brown Institute and later the Anishinabe Academy. The county will charge the district an escalating rate as an incentive to move out earlier than the seven-year deadline.
The plan includes a county agreement with L&H Station Development to build 125 housing units on another parcel of the site in the project's first phase and to share the cost of the underground parking ramp. L&H is expected to pay the county $1 million in early 2015 when the deal closes.
J. Michael Noonan, manager of the county's real estate division, said he expects the county to recoup through land sales the $9 million cost of acquiring the parcels. The remainder will be used to build a $30 million service center and $16 million in mostly underground parking.
While no one criticized the county's vision for dispersing human services, Johnson and Opat expressed misgivings about the potential costs.
"We're essentially getting into the land development business," Johnson said. "I don't think these are risks we should be taking."
Opat said that wanting a new service center doesn't mean "accepting any deal that's put in front of us." Saying that "Minneapolis neighborhood politics" drove up the cost of the land and the project, Opat said he anticipates that developers will return in coming years wanting additional subsidies. "At that point it won't be possible for this body to stand up and say 'We've gone far enough.' "
The county next must get approvals from the city for the permits and land use.