Seven years after the University of Minnesota Board of Regents adopted a plan to turn school-owned land into a sustainable community, it decided against being the area’s major developer.
Regents on Friday approved a plan to sell the 5,000-acre UMore Park on recommendations to sell the land and have local governments and private buyers develop it. This modified approach also ensures the University is still able to access the land, which is near the southeastern suburbs, for agricultural research.
UMore Park, approved by the board in 2008, called for the University to develop a sustainable community for 20,000 to 30,000 people over 25 to 30 years. At the end of fiscal year 2014, the University had spent a total of $12.4 million related to planning activities at UMore.
Questions about how best to use the property have lingered since its inception. In October, President Eric Kaler assembled a seven-person group to address the use of the land.
School officials have voiced concern with the University’s involvement in the development of the land, and some have said it’s too financially risky.
At Friday’s meeting, Regent John Frobenius said the University shouldn’t be spending money in the private development business.
Since the early stages of UMore Park, it was unclear whether the school would pay to develop the land, said Richard Pfutzenreuter, the University’s chief financial officer.
Although the University won’t be involved with the property’s development, it still wants the original plan for the land to follow through, said Board Chair Richard Beeson.
“We’re going to let the market more heavily drive what that project looks like,” he said. “Obviously we’d like to have it be as energy-efficient and sustainable as possible, but our fiduciary responsibility is to maximize the return to the University’s fund on this.”
Eventually, the land will be sold, with an undetermined amount saved for future research, Beeson said.
But before that happens, the University will focus on maximizing its profit through gravel mining and research on the property.
The school signed an agreement in 2011 with Dakota Aggregates, which mines the western portion of the land, allowing the company to continue gravel mining until the 40-year lease agreement expires.
While mining is expected to bring in $90 million over 40 years, about $71.4 million is expected to be lost in agricultural research due to mining in the area. Last year, 518 acres were used for University research.
“Are we closing the door on the future as we move forward with the development agreement, which in part moves forward to sell the land off?” Regent Thomas Devine asked at Friday’s meeting.
School leaders recommended the University restructure its agreement with Dakota Aggregates to lengthen the time the mining company is required to give the University before it plans to start mining a parcel of land.
Currently, Dakota Aggregates is required to give only three years’ notice to the University when it will start mining a parcel of land.
Administrators said they want to extend the notice to 15 years or more in some areas of the land to allow the school to complete ongoing research.
Going forward, Beeson said the board still has the right to review any purchase and proposed development before a sale is finalized.