Monday, October 28, 2013

The UMore Park Fiasco


"It's hard to make predictions, 

especially about the future."





UMore Park draws concern


Plans for the University of Minnesota’s UMore Park are in full swing, but some University officials aren’t convinced it’ll generate revenue in the future.
The Rosemount City Council approved the Alternative Urban Area-wide Review on Oct. 15, which allows UMore Park to move forward and hire a master developer. But the University’s Board of Regents is divided on whether the project is right for the University.
Development plans for UMore Park include a self-sustaining community for 20,000 to 30,000 people, a sand and gravel mine, and industrial areas. Regents approved the initial plans in 2008.
Although a concrete timeline hasn’t been set, the board next has to approve the area’s developer once one is chosen from a nationwide search.
The University has owned the 5,000 acres of land, located 25 miles southeast of the Twin Cities metro area, for more than six decades. In that time, faculty, staff and students have used the land for research.
The University plans to implement the development over the next 25 to 30 years. In a 2005 report on the project, an executive committee to then-University President Bob Bruininks insisted the money gained from the land would help the University become one of the top three public research institutions in the world by 2015.
But during an update on UMore at this month’s regents meeting, some voiced concerns about the project’s progression.
Regent Laura Brod said the decision to develop the land predated her time on the board, and that she wasn’t sure if the University should be in the business of development.
“I worry a little bit about being in development and about competing with the private sector,” she said at the meeting.
Brod said the board and the University need to examine how they will spend their money and time when considering future projects.
Regent John Frobenius, who was on the board when it approved the preliminary plans, said real estate was booming in the early 2000s when the project started, but it has since slowed. 
“There were some pretty ambitious development plans that probably were more extravagant than they should have been,” he said. “It probably doesn’t produce as much resources as some of us might have thought it could initially, but that’s what you learn as you get into a project.”
Other regents questioned whether the project has made any money for the University at this point.
University Chief Financial Officer Richard Pfutzenreuter said the project hasn’t paid for itself yet, but mining sections of the land is generating revenue.
In 2011, the University signed a 40-year agreement for a sand and gravel mine on the site. Officials estimated the University would make $3 to $5 million per year off the mine, according to a previous Minnesota Daily article.
From when the project began until the end of June 2014, Pfutzenreuter said, its estimated cost to the University will be $10.2 million, and it will have made a total of nearly $8.3 million.
But Pfutzenreuter assured the board that the land has increased in value over time.
The regents created a legacy fund for the project in 2008, which assures that all revenue earned from UMore Park will go toward academic research, education and public engagement.
“All of these efforts … between the mining and the development will make this venture a positive cash flow and allow funds to flow into the legacy fund as the board adopted that plan,” Pfutzenreuter said at the meeting. “But so far, we’re just a tad short.”
Carla Carlson, executive director of UMore Development LLC, said the University is using the land to its “best and highest use.”
“We are generating income,” she said.
Carlson said in a July Minnesota Daily article that she estimated the annual budget for upkeep and planning of the development to be about
$1 million.
Regent David Larson said he was concerned with the cost of maintaining the land and asked whether the University could sell the land in the future if necessary.
“We should always be looking at the alternatives,” he said at the meeting. “In other words, is it much more valuable for someone else’s use at some point in time?”
University President Eric Kaler said for now, the University will continue to use part of the land for agricultural research.
“I think it’s a valuable resource for the University and we should use it to its highest and best use,” he said.
Carlson said she couldn’t comment on Larson’s concerns.
When asked how much money the project could potentially make for the University, Carlson said it’s too soon to estimate.
“It’s hard to predict what will happen 30 years in advance,” she said.






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