St. Paul Looks at Innovative Models to Rebuild Its Aging Infrastructure

St. Paul, Minnesota, like many industrial-era cities, faces aging stormwater infrastructure and seeks a sustainable financing mechanism to cover the high upfront costs of replacement.

Scarce funding for infrastructure is also slowing the redevelopment of three large brownfield sites the city’s juggling.

Having researched options on how to proceed, St. Paul wants to pioneer a new site-by-site approach, where the brownfield redevelopment parcels share stormwater treatment systems that double as site amenities and costs are divided equitably.

“It’s about connecting neighborhoods to the [Mississippi R]iver, where we often buried water,” Jonathan Sage-Martinson, the city’s planning and economic development director, told Route Fifty in an interview. “It’s also about reclaiming that brownfield, often in the backyards of some of the lowest-income populations.”

The infrastructure finance goals for Living Cities and the Citi Foundation's City Accelerator program aligned perfectly with St. Paul’s desire for a cross-departmental, potentially cross-sector funding structure. Starting in April, St. Paul and City Accelerator will partner for 18 months to look at the city’s infrastructure financing challenges, with Living Cities offering technical expertise and the chance to share best practices with three other municipalities.

The goal: Make Minnesota’s capital city a model for other cities grappling with how to finance critical infrastructure projects in an era of strained federal and state government support. And that starts with a new policy framework for developers allowing for shared use of stormwater.

“They want to make sure the policy will be equitable for all parties involved and any future impact on residents—especially those who may not have the capacity to pay rate increases for the infrastructure necessary—will not negatively change the makeup of the city,” Elizabeth Reynoso, Living Cities’ public sector innovation assistant director, said in an interview.

Historically, St. Paul’s large-scale developments have handled stormwater on site, often in underground tanks, and there’s been little sharing of infrastructure. Combined sewer overflows collecting both residential and commercial stormwater have a knack for failing where residents are most vulnerable.

Even advanced pumping systems watering green roofs in the city aren’t shared. That will change. In its redevelopment vision, St. Paul wants wetlands and other natural features to help treat stormwater on site.

With shared infrastructure comes new challenges: Who bears the initial capital costs for construction, who owns and operates the system and how will revenue be collected for maintenance?

From St. Paul’s City Accelerator application:

Budget pressures and debt capacity present challenges. Each year, we face a budget gap between revenue and expenses that must be closed through cost savings measures. In this context, it is difficult to justify risking our high bond ratings to increase our borrowing for innovative, but expensive, projects like above-standard stormwater infrastructure.

Stormwater drainage district assessments and the larger tax base that comes with denser development are long-term options. But if only 20 percent infrastructure capacity is being used by developers when the system’s built, there’s only 20 percent funding available.

Via the City Accelerator, St. Paul will explore all manner of working partnerships necessary to engage state and federal governments and attract economic development opportunities. Depending on the brownfield site, the city might consider publicly owned infrastructure.

The West Side Flats neighborhood is a 40-acre area along the Mississippi River across from downtown with multiple property owners. There could be some public ownership of stormwater infrastructure with multiple private users, Sage-Martinson said.

Other systems may serve only one landowner or could function with two or more private sector entities collaborating to publicly facilitate a private-private partnership, according to Kristin Guild, the city of St. Paul’s planning and economic development deputy director.

A racial equity analysis will be performed to evaluate the fairness of new financing tools, and amenities are meant to be central gathering places for recreation.

While the ground won’t be broken on the West Side Flats project until the fall, the Snelling-Midway superblock’s redevelopment starts this summer. The diverse, low-income area will be anchored by a Major League Soccer stadium.

Redevelopment of the largest site, a former Ford Motor Company assembly plant also along the Mississippi, is several years off, and St. Paul City Hall hopes to have plenty of takeaways from the City Accelerator by then, Sage-Martinson said.

The Mississippi cuts through St. Paul, dividing many of its neighborhoods. But by being respectful of how the city puts stormwater back into the waterway and equitably establishing new treatment systems, officials hope to use it to reunify its residents.

“We have some of the dark history of segregation of city places,” Sage-Martinson said.