Administration - Rebecca Haug, Water Resources Manager
Title
Title
Wetland Credit Sale for Troy Industrial
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Executive Summary
A development proposal for the Troy Industrial project in the city of Dayton has impacts to wetlands. The applicant has requested to purchase 277,843.104 square feet (6.3784 acres) of wetland credits from the Site 7 Wetland Bank that are necessary for the proposed project to meet permit requirements.
Background
The Troy Industrial Project would like to purchase 277,843.104 square feet (6.3784 acres) of wetland credit from the City of Blaine (Site 7) Wetland Bank.
Prices for wetland credits are based on market demand. The city has been selling credits for $2.50/square feet for purchases generally around or below one acre in size. Staff researches market demand by contacting other wetland banks, consultants working on projects, and the state (who collect only voluntary information) to determine what current pricing is. We have seen slightly lower prices in 2021 at $2.25/sf to $2.40/sf. Prices do vary and fluctuate frequently.
The applicant initially offered a price of $2.25/sf and staff countered at our more recent sale prices of $2.50/sf. We eventually negotiated to a price of $2.40/sf. that is advantageous to both parties because it is a large purchase of credits. The cost of the wetland credit purchase is $666,823.45 based on 277,843.104 square feet. The applicant is also willing to pay all transaction fees. The differences in price is shown below:
• 6.3784 acres * $2.50/sq.ft. = $694,607.76
• 6.3784 acres * $2.40/sq.ft. = $666,823.45
o Difference $27,784.31
One of the benefits to selling the 6.3748 acres at $2.40/sq. ft. is it provides a large amount of funding with one sale.
Since wetland credits are market driven, it is in the city’s best interest to sell credits when there is a demand for the credits. With this sale and two other proposed sales, the city would have approximately one acre of credits remaining in inventory to sell.
Additional credits will be ready and available for sale once they are inspected and released by the regulatory agencies. With the warming weather and plants starting to grow, the regulatory agencies have the ability to inspect the site and see how it is performing. This will allow the agencies to make a decision to release approximately 15 additional acres of wetland credits.
Staff has observed a number of other banks in this same positon with additional acreage ready to be released. That will increase competition in the market and could generally lower prices in the near future.
Strategic Plan Relationship
The sale of wetland credits provides funding for the city to maintain its open spaces and trails meeting the well maintained infrastructure goal of the strategic plan.
Board/Commission Review
The Natural Resource Conservation Board was made aware of the sale of the wetland credits on Friday, April 30, 2021. Board members did not have any concerns with the sale.
Financial Impact
If approved, the city will add $666,823.45 to the Open Space Development Fund, pursuant to the City’s Capital Improvement Plan.
Public Outreach/Input
N/A
Staff Recommendation
Adopt the resolution.
Attachment List
Proposed agreement
Body
BE IT RESOLVED by the Blaine City Council (the “Council”), as follows:
WHEREAS, it is one of the goals and purposes of the Council to sell credits to generate revenue to offset costs to maintain the city’s open spaces and trails; and
WHEREAS, the Troy Industrial project in Dayton proposes to impact wetlands through development; and
WHEREAS, the Troy Industrial project in Dayton has identified the need to acquire 277,843.104 square feet (6.3784 acres) of wetland credits and has indicated an interest in purchasing the City wetland credits that are necessary for their project.
NOW, THEREFORE, BE IT RESOLVED, by the Blaine City Council, City of Blaine, Minnesota, that the Mayor and City Manager are here by authorized to execute any and all agreements and documents required for the sale and transfer of 277,843.104 square feet (6.3784 acres) of City wetland credits to the Troy Industrial project in Dayton at a cost of $2.40 per square foot plus the City’s out of pocket cost for withdrawing credits from the wetland bank.
PASSED by the Blaine City Council this 17th day of May, 2021.