Ramsey County Board aims wrecking ball at St. Paul riverfront buildings

First, the bad news: The cost of razing a line of county-owned buildings strung along the bluffs overlooking the Mississippi River in downtown St. Paul will cost nearly $3 million more than first thought.

The good news: Ramsey County has hit on a strategy to pay for the $15 million project that will cover most of that increase.

The County Board on Tuesday unanimously approved a financing plan for the project, aimed at clearing the site in the heart of downtown to boost development interest.

The job of razing seven buildings, which include the former county jail and former headquarters of West Publishing Co., will begin this month with removal of hazardous materials. The wrecking balls probably won't swing until late July or early August and continue through the winter, said Bruce Thompson, the county's property management director.

Thompson used the term "deconstruction" rather than demolition to describe the work. That's because 85 percent of the building material, much of it brick and concrete, will be crushed and recycled, he said.

County officials have shopped the vacant 6-acre site to developers since 2002. The closest they came to a sale was in 2007, when Opus Northwest struck a deal to build a $200 million office/hotel/condo complex, but it backed out when the recession hit and an anchor tenant couldn't be found.

Since then, developers have balked in part because of the unknown cost of removing contaminants and building on the tricky bluff site.

However, the lowest of five bids was $13.1 million, from Rachel Contracting of St. Michael, Minn., which the county accepted.

The cost went up because of the improving economy and the need to build a retaining wall to stabilize Kellogg Boulevard, county finance director Lee Mehrkens said.

"This is a very novel sort of project," he said.

The board had planned to issue bonds to pay for the project. Instead, the county will use $14.6 million from its robust capital projects fund to pay for most of it, supplemented with a $429,000 loan from the general fund.

The plan will save about $2.7 million, because the county won't have to pay interest on the bonds, Mehr­kens said.

Commissioner Janice Rettman amended the resolution to express the board's intent to recover the county's outlay with proceeds from the property's sale. The board agreed.

"I don't like the fact that [the cost] went up, but that's life. … I am confident we are going to get our money back," Commissioner Victoria Reinhardt said.

• Also Tuesday, commissioners voted 5 to 2 to increase their 2016 salaries by 2 percent, reflecting the general wage increase granted county workers this year. That means the County Board chair will be paid $90,632 and the other six board members will receive $87,884. Rettman and Commissioner Blake Huffman voted against the salary hike.