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Corridor questions: City reviews report on future of Rail Corridor development near downtown

The city of Bemidji is contracting with St. Paul Port Authority to research developing the Rail Corridor area in downtown Bemidji. (Jillian Gandsey | Bemidji Pioneer)1 / 4
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BEMIDJI—An area south of Bemidji's downtown—the Rail Corridor—holds opportunity for new development according to a consultant's research.

However, more steps are needed before any ground can break.

The research, compiled by the Saint Paul Port Authority, was the subject of review at a special Bemidji City Council work session Tuesday. The agency, which was contracted by the city in August, compiled the report, including a market study, environmental factors and development feasibility.

The area in question spans 14 acres and is bordered by existing rail lines, the Mississippi River and Irvine Avenue just off the existing downtown. The area has previously been a utility corridor and an industrial site. At times, the land was the site of gas stations, a bulk oil plant and a coal gasification plant. The city purchased the property in 2003 to install a sewer system, and some developers have expressed interest in the area for future housing and commercial uses.

According to the research, the largest obstacle to overcome in the development of the site is soil management and correction. The findings from Port Consulting showed there are concentrations of petroleum and metal in the soil on the site, with much of it on the eastern half.

The total cost of removing and hauling all of the contaminated soils, amounting to 95,000 tons, would roughly cost $5.7 million. When including backfilling and more soil management, the cost would be pushed to $8.2 million.

However, Monte Hilleman, senior vice president of real estate development for Port Consulting, who gave the report, said the city could greatly reduce the soil management costs by minimizing off-site hauling, and utilizing land treatment and berms on poor and contaminated soil. By doing so, and factoring in costs related to infrastructure, cleanup of the site is estimated between $2 million and $4 million.

Another environmental aspect raised was the sensitivity of the soil and proximity of the Mississippi River. As a result, Port Consulting noted that water runoff will be important in the development. One of the possible options is to identify potential treatment ponds because of their lower costs and amenity value.

Housing a good fit

If the city were to complete a soil management project, Port Consulting said the area would likely be best served by residential spaces and presented several conceptual drawings of what the area may look like once developed. For example, one of the scenarios showed the space could hold 50 townhomes, as well as two apartment buildings, one with 30 units and another with 40. Those townhomes, Hilleman said, could be built at a pace with about 10 to 12 per year.

"I think our goal here is to complement the downtown and complement the retail, not compete. There is a lot of capacity downtown now, there are a lot of store fronts available," Bemidji Mayor Rita Albrecht said. "So, I think it's wise to focus on the housing side on this, that's a strategy I think we should focus on."

"The conventional wisdom is retail follows rooftops," Hilleman said. "It is those residential units that retail drills into. We definitely think that having more housing would support the resurgence on this edge of downtown."

The report presented Tuesday is the first phase of research for the development concept. The second phase, Hilleman said, would include consulting with the Minnesota Pollution Control Agency, as well as tribal leaders, to get more background on soil management. Additionally, the second phase would review more development costs, infrastructure, utilities, funding sources and regulatory needs.

During the meeting, members of the council also requested that Port Consulting explore potential property tax possibilities from new housing developments and opportunities for grants to help in cleaning up the site.

The amount for the first phase of services from Port Consulting came to $49,000 and the cost for phase two is $13,500. That cost has been included in the city's 2018 budget.

Moving forward with the second phase was approved in a 6-1 vote. In favor was Albrecht and council members Nancy Erickson, Ron Johnson, Dave Larson, Richard Lehmann and Michael Meehlhause, while Roger Hellquist voted against.

"We don't have any buyers, we don't have anything else beyond that. We end up back being sellers of land, which we are not good at. We've proven that and we're still proving that," Hellquist said. "This is as far as I'm concerned, another money pit. I just don't think this project is where we should sink our future money. We've got too many big costs coming up, we've got issues coming with wells. I don't think we're in a situation to do this"

"I feel if you just pose the general question to the community, 'Would you like to see this development?' I'm guessing the answer is yes. One of the things that's always held us back is the question of cost for cleanup and infrastructure," Meehlhause said. "So far, we've gotten a lot of answers. In fact the market study surprised me in how much it leaned toward residential, but that's why we do a study. Whether we push forward on this or not, we can't make a sound decision unless we know what is the total cost, that's why I think we should continue with this next phase."

Phase II is expected to take three to four months.

Matthew Liedke

Matthew Liedke is the city, county and state government reporter for the Bemidji Pioneer. He also covers business, politics and financial news.

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