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Erik Burgess, Published September 24 2012

Moorhead City Council OKs study for First Avenue North complex

MOORHEAD – First Avenue North here could see construction on a new commercial and residential unit aimed at attracting college students beginning next fall if all goes as planned following City Council actions Monday night.

The council here approved an interim agreement with an organization called Real Estate Recycling, which specializes in buying up polluted and dilapidated sites and flipping them for redevelopment.

The group will now be studying a 5-acre city-owned parcel of land along First Avenue North – the former site of Aggregate Industries – with the intent to build an $8 million to $10 million mixed-use complex, including apartments and retail geared toward college students.

“We’re going to spend a bunch of money and a bunch of time on this, and we wouldn’t do it if we didn’t think this was really an exciting project,” Paul Hyde, principal of Real Estate Recycling, told the council Monday.

Construction on the multi-level building could begin by fall 2013. Hyde said the area’s 30,000 college students are particularly “underserved,” hence the focus on that population.

The council voted unanimously to accept the agreement between the city and the developers, and many council members took time to thank Hyde for putting time into an area of Moorhead that has been working toward redevelopment for some time.

Council documents show that redevelopment of this corridor dates back to at least 2004, with millions of dollars being spent in the process.

“This site has been of particular interest to citizens of Moorhead for literally decades,” Councilwoman Nancy Otto said.

In early June, a request for redevelopment proposals was sent out to 35 area developers, architects and real estate professionals for submission by July 13, according to council documents, and zero responses were received.

The city was familiar with Real Estate Recycling through another project on Main Avenue and discussed the First Avenue project with them in late August.

Despite zero response from other developers, Hyde told the council Monday that this site has potential, and council members agreed.

“We knew that something would come along because the traffic pattern is there, and I do believe our citizens will be just very, very excited and appreciative to know that we will be doing something very, very good with this site,” Otto said.

In a letter to the Moorhead Economic Development Authority, Hyde said the group recognizes they are “pioneering with this type of mixed-use project in this part of town.” Construction of new residential properties along First Avenue North has been met with some resistance in the past from business owners along the corridor who believe the area is better suited for commercial growth.

The site was originally home to Aggregate Industries, a construction material producer, and included various open aggregate storage bins with concrete walls, silos, conveyor and conveyor house, and a warehouse building.

Hyde said they recognize the site’s issues, in the same letter to the EDA, stating that “this project is not a layup by any means.” The city’s environmental consultant estimated that the cleanup of the site would cost $1.6 million, which would include the removal of contaminated soil. Federal contamination cleanup grants would be considered for the site.

As a part of the agreement, the developers will need to gather preliminary information about the site, including initial market research, preparation of a site plan and building design, by Feb. 1.

At that date, based on preliminary information gathered at the expense of the developers, either the developers or the city can decide to sever the agreement. If they both agree to move forward, the developers will have until May 1 to continue to gather more data, such as an environmental site review.

“This will be a several-phase project just because it’s so big, but I would hope that the cleanup would be starting in the fall (of 2013) and we’d be working on the first phase of the project just after that,” Hyde said.

Regardless of the outcome, information such as market analyses and environmental reports gathered by the developer belongs to the city at no cost.

Real Estate Recyclers have won numerous awards for their work in redevelopment, according to council documents. Hyde said they have developed over 1.5 million square feet of new commercial buildings on polluted sites in the past 17 years and added $67 million in new property tax base to local communities.

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Readers can reach Forum reporter Erik Burgess at (701) 241-5518