Minneapolis needs a new space for sewer and water distribution. Community members yearn for an urban farm.

But both proposals for the former Roof Depot site are in limbo after a key City Council committee failed to make a decision either way, leaving the city with a potential $12.3 million budget gap and a vacant building atop an arsenic plume.

"We're all just shocked and dismayed by it," said Karen Clark, a board member of the East Phillips Neighborhood Institute, which created the urban farm proposal.

An environmental review of the site was scheduled for discussion at Wednesday's meeting of the council's Policy and Government Oversight Committee. But the discussion soon mutated into a tug-of-war between council members who favored staying the course for a new city water yard, those who wanted to turn the site over to community members for their urban farm, and their dueling compromise proposals.

Council Member Alondra Cano, whose ward includes East Phillips, introduced a proposal to suspend all work on the new water yard, find a different location for it and enter into a two-year exclusive development rights agreement with urban farm advocates. In that time, the Neighborhood Institute would have to raise $12.3 million to reimburse the city's water fund in order to ultimately buy and redevelop the land.

"This is a legacy project," Cano said. "This is going to significantly improve the lives of working-class people, American Indian people, African American people … many who have been paying the price of probably 20 years of white supremacist urban planning by the city of Minneapolis."

Cano's proposal, which Council Vice President Andrea Jenkins and Council Members Cam Gordon and Andrew Johnson co-authored, passed 7-6. But in an unexpected twist, Council Member Jeremiah Ellison partly abstained on the single point of entering into an exclusive rights agreement with urban farm advocates. That item failed as a tie, leaving intact only the suspension of work on the water yard and the plan to find a new site for it.

A visibly rattled Cano said that the city would now not be able to offload any of its financial burden onto the community developer and would be left with the vacant Roof Depot building, shorn of a plan, until additional action is taken.

The committee went on to approve city staff's environmental review of the water yard project without additional debate.

Staff must complete a report on the costs of maintaining the site, to be presented at the next Policy and Government Oversight Committee on Sept. 9. If they are able to also complete a fiscal note and racial equity impact analysis in advance of that meeting, the full council may determine the future of Roof Depot the next day.

Ellison did not discuss the reasoning behind his vote during Wednesday's meeting and did not respond to a request for comment.

"It really cripples it. He took out the exclusive development rights, and that's so necessary for [the Neighborhood Institute] to have site control status, to be able to raise the money to pay back the water fund, to actually go ahead with development," Clark said. "But hopefully there's a chance to repair it."

Council members unanimously agreed to build a water facility at the former Roof Depot site years ago, though pressure from the neighborhood has recently persuaded some to change course. Local activists in the low-income area, already home to an outsized share of heavy industries, have pushed for community-led development of an urban farm with aquaponics, solar gardens, small shops and affordable housing.

"We have never, on any issue that I can remember, received more contacts than on this issue, and it's pretty unanimous among the contacts that we received that we should be working with community … and allow for their vision to proceed," Johnson said at Wednesday's meeting.

But other council members defended the need for a new water yard to replace the crumbling building at 935 Fifth Ave. SE., where essential water division staff now work. They argued for better guardianship of the city budget given the toll that the COVID-19 pandemic has taken on revenue and pushed back on activists' claims that leaving the Roof Depot warehouse intact would be more environmentally conscious than tearing it down and cleaning up the arsenic, asbestos and other contaminants found beneath the site.

"If we need to raise the [property tax] levy this year to help build this budget gap, if we need to cut other infrastructure projects to fill this budget gap, if we need to leave staff positions vacant, the council and the mayor really need to take seriously our responsibility to adopt balanced budgets, and not doing so should really be disqualifying to be in leadership," said Council President Lisa Bender.

Council Member Lisa Goodman pointed out that the proposal to turn Roof Depot over to the neighborhood had not yet undergone a fiscal or racial equity analysis.

"I strongly will push back against the notion that voting for the water yard is a vote for institutionalized racism," added Council Member Phillipe Cunningham, in response to public comments characterizing the Public Works water yard as a "toxic" project for the neighborhood. "That is such an oversimplification of what institutionalized racism looks like, how it manifests. Clean water is an environmental justice issue."

Bender and Council Member Kevin Reich proposed that the Public Works department and urban farm advocates share the 7.5-acre Roof Depot site, though Cano pushed back, calling their arguments a "militaristic, one-dimensional way to analyze dollars and cents." That motion failed on a 5-8 vote.

Susan Du • 612-673-4028