MAC Analysis of the Impacts of Preservation of a Site Dec 19950
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IF THE COMMISSION WERE TO DEPEND ON �AND USE REGU�ATION TO PRESERVE THE SITE ---
� • the Metropolitan Land Use Planning Act as amended by the Minnesota �egislature in 1995 i�
our potential tool. The legality and the constitutionality of its use is under investigation; its
-� availability as a substitute for acquisition cannot be assumed at this time. Alternatively, and
perhaps preferably, if this site preservation technique is selected, the Legislature could identifY
a regulation program specific to the site.
• the costs to the MAC of land acquisition and associated costs would be eliminated.
• impacts relating to economic and social dislocation and environmental impacts would be minor.
The ultimete disruption of the farming community would be associated with the actual construction
of the new airport rather than with the site preservation phase; but, under either site preservation
scenario, the farming industry and the lifestyle of the existing farming community would be
significantly disrupted following the decision of the Legislature to acquire property for a potential
new airport.
Two other factors create uncertainty regarding the feasibility of construction of a new airport on a
deferred basis. The availability of funding for this very large project is problematical. Existing
sources are subject to major constraints and limitations; if funds are available for purchase of the
land, there remain questions of the financing of actual construction many years in the future.
Secondly, environmental clearances that are obtained in the short term would require re-evaluation
prior to actual development of the facility at some point in the future, with no guarantee that the
project would be found environmentally acceptable at that time.
TABLE OF CONTENTS
SECTION1 - INTRODUCTION ...............................................................................................1
_I 1 .1 (NTRODUCTION ................................................................................................................. 1
1.2 SITE PRES E RVATION SCENARIOS ............................................................................................ 1
1.3 SCOPE OF THE SITE PRESERVATION ANALYSIS ........................................................................... 1
1.4 TH E I.AND ACQUISITION APPROACH ....................................................................................... 2
..1 1.5 TH E LAND REG U LATION APPROACH ........................................................................................ 2
I 1.6 THE ENVIRONMENTAL PROCESS ............................................................................................ 2
1 .7 FUNDING FACTORS ........:................................................................................................... 3
� 1.8 IM PACTS TO BE ANA�YZED .................................................................................................. 3
SECTION 2- EXISTING CONDITIONS IN THE SITE PRESERVATION AREA .................................. 5
2.1 SITE PR ESERVATIO N AREA ................................................................................................... 5
2.2 GENERAL CHARACTERISTICS OF THE SITE PRESERVATION AREA ...................................................... 5
2.3 GOM PREH ENSIVE PLANS ...................................................................................................... 6
2.4 LAND USE ...................................................................................................................... 6
2.5 PUBLIC IMPROVEM ENTS ...................................................................................................... 7
SECTION 3- FINANCIAL IMPACTS ON THE METROPOLITAN AIRPORTS COMMISSION ................8
. l 3.1 INTRO D UCTION ................................................................................................................. 8
4 3.2 ACQUISITION COST OF THE PROPERTIES ................................................................................... 8
3.3 ADMINISTRATIVE AND RE�OGATION COSTS RE�ATED TO THE ACQUISITION PROCESS ............................. 9
3.4 COSTS OF OWNING AND MANAGING THE PROPERTIES ................................................................ 1 O
� 3.5 L EASE OF PROPERTIES ...................................................................................................... 1 2
3.6 INGOME FROM LEASING OF PROPERTIES ................................................................................. 1 2
3.7 LAND REGULATIO N APPROACH ............................................................................................ 1 3
' 3.8 REGULATION OF PROPERTIES OUTSIDE THE AIRPORT BOUNDARY .................................................... 14
3.9 SUMMARY OF FINANCIA� IMPACTS ON THE MAC ..................................................................... 16
SECTION 4- FINANCIAL IMPACTS ON EXISTING PROPERTY OWNERS .................................... 17
4.1 INTRODU CTION ............................................................................................................... 1 7
4.2 (NCOME FROM SALE OF PROPERTIES ..................................................................................... 1 7
4.3 COST OF LEASING PRO PERTIES ............................................................................................ 1 8
4.4 TAX COSTS ASSOCIATED WITH CONTINUED OWNERSHIP AND OPERATION BY EXISTING OWNERS ............ 1 8
4.5 SUMMARY OF FINANCIAL IMPACTS ON PROPERTY OWNERS .......................................................... 20
SECTION 5- FINANCIAL IMPACTS ON LOCAL JURISDICTIONS .............................................. 21
5.1 INTROD UCTIO N ............................................................................................................... 2 1
5.2 TAXES PAID TO LOCAL .1URISDICTIONS .................................................................................. 21
5.3 SUMMARY OF FINANCIA� IMPACTS ON LOCA� JURISDICTIONS ....................................................... 23
SECTION6- ECONOMIC IMPACTS ...................................................................................... 24
6.1 (NTRODUCTION ............................................................................................................... 24
6.2 EXISTING ECONOMIC ACTIVITY ........................................................................................... 24
6.3 ECONOMIC ACTIVITY DURING THE SITE PRESERVATION PERIOD ..................................................... 24
6.4 COMPARISON OF LEVELS OF ECONOMIC ACTIVITY ..................................................................... 27
SECTION7 - SOCIAL IMPACTS ........................................................................................... �9
7.1 INTRODUCTIO N ............................................................................................................... 2 9
7.2 GUIDELINES FOR DETERMINING SOCIAL IMPACTS OF SITE PRESERVATION ......................................... 29
7.3 SOCIAL IM PACTS ............................................................................................................ 2 9
SECTION 8- ENVIRONMENTAL IMPACTS ............................................................................ 31
_ _1 8 .1 INTRODUCTION ............................................................................................................... 3 1
,( 8.2 POTENTIAL LOSS OF PRODUCTIVE FARMLAND AND REDUCTION IN INCENTIVES .................................. 31
8.3 HOG AND DAIRY CATT�E FEEDLOTS ..................................................................................... 31
8.4 WILDLIFE HABITAT .......................................................................................................... 32
�IST OF TABIES
i TABLE 1: ACQUISITION COST OF THE PROPERTIES ............................................................................ 9
ITABLE 2: ANNUAL TAXES PAID ............................................................................................... 11
TABLE 3: ANNUAL (NCOME FROM LEASING THE PROPERTIES ............................................................. 13
TABLE 4: SUMMARY OF FINANCIA� IMPACTS FOR THE MAC ............................................................. 1 6
� TABLE 5: (NCOME FROM SALE OF PROPERTIES .............................................................................. 17
TABLE 6: ANNUAL COST OF LEASING PROPERTIES ......................................................................... 1 8
TABLE 7: ANNUAL COST OF PROPERTY TAXES WITN CONTINUING OWNERSHIP ....................................... 1 9
"� TABLE 8: SUMMARY OF CUMULATIVE FINANCIAL IMPACTS FOR PROPERTY OWNERS ................................ 20
TABLE 9: ANNUAL NET FINANCIAL IMPACTS FOR LOGAL JURISDICTIONS .............................................. 22
TABLE 1 O: SUMMARY OF NET CUMULATIVE FINANCIAL IMPACTS FOR �OCAL ,1URISDICTIONS ..................... 23
TAB�E 11 : BASE YEAR EMPLOYMENT AND PAYROLL ...................................................................... 26
I TABLE 12: EMPLOYMENT AND PAYROLL DURING SITE PRESERVATION ................................................. 27
TABLE 13: COMPARISON OF ANNUAL ECONOMIC ACTIVITY .............................................................. 28
LIST OF FIGURES
Figure 1- The Site Preservation Area Foliows pg. 5
Figure 2- Prime Farmland Follows Pg. 5
Figure 3- Farmland of Statewide Importance Follows Pg. 5
Figure 4- Agricultural Preserve Farmland Follows Pg. 6
SECTION 1 - INTRODUCTION
1.1 Introduction
This report describes the findings of an analysis of the potential impacts of a decision by the
Minnesota Legislature to preserve a 14,100-acre site in Dakota County for future development of a
new airport.
The analysis addresses the social and economic impacts of site preservation on the residents of this
Dakota County area who would be directly affected, as well as the financial implications for
property owners within the airport site, for local government and for the Metropolitan Airports
Commission (MAC) of extended holding of the land prior to construction of a new airport. The
analysis does not address the impacts of purchasing the property for development of a new airport
if construction were to begin immediately following the purchase of the land. That is discussed in
the Environmental Impact Statement (EIS) prepared for the Dual-Track Airport Planning Process,
initiated by the Minnesota Legislature in 1989.
I The site preservation analysis addresses concems that were voiced by elected and agency officials
and citizens groups from Dakota County. The workscope was developed with input from these
groups, as well as from representatives of the Metropolitan Council, to insure that their concerns
� are properly addressed.
1.2 Site Preservation Scenarios
The following scenarios for preserving an airport site in Dakota County are assessed:
• The site is preserved for 10 years, at which time growth of air traffic at Minneapolis-St. Paul
International Airport (MSP) justifies proceeding with construction of the new airport. The site
would be "preserved" for 10 years under this scenario.
• Growth in air traffic occurs at a slower rate and it is determined that construction of the new
airport should proceed after 20 years. The site would be "preserved" for 20 years under this
scenario.
As a contingency, one other site preservation scenario is assessed. If, after preserving the site for
20 years, growth in air traffic at MSP is significantly slower than originally anticipated and it is
determined MSP can handle air traffic in the foreseeable future, it could be determined that a new
airport is not necessary. At that time, land originally purchased for the airport would be sold.
1.3 Scope of the Site Preservation Analysis
Preserving a site for a new airport, in theory, could be accomplished by using two techniques,
either singly or in combination. These techniques are:
• Purchasing property in 1998, the base year for the purpose of this analysis (or immediately
following a decision by the Minnesota Legislature), and leasing it back (or leasing it out) until
airport construction is begun; and,
• Limiting development through land use regulation until construction is due to begin, when the
property would be acquired.
Both techniques are analyzed in this report. The format of the report addresses site preservation by
category of impact; the pertinence of the analysis to an acquisition approach and to a regulatory
Iapproach are identified in each chapter.
7.4 The Land Acquisition Approach
The land acquisition approach assumes that acquisition of all properties will be initiated in the first
year of the site preservation program, 1998. Outright ownership would p�ovide the MAC with the
best overall level of control of the airport site.
1.5 The Land Regulation Approach
The second approach is to establish land use controls over the area required for airport construction
such that additional incompatible development does not occur on the site.
One potential tool for implementing this approach is the Metropolitan Land Use Planning Act which
I' was recently strengthened with 1995 amendments. The Act includes provisions giving the
Metropolitan Council the authority to ensure that only land uses compatible with the airport
development be permitted in affected townships. Included in the legislation is the authority to
� require a local government to modify any comprehensive plan "which may have substantial impact
on or contain a substantial departure from metropolitan systems plans" (which include airports),
and the authority to require local communities to bring zoning and other local controls into
j conformance with the plans.
The Metropolitan Land Use Planning Act, as amended in 1995, is a potential mechanism for
protecting the airport site in Dakota County from development in land uses that are incompatible
with the development of a major airport; however, the availability of any land use regulatory
mechanism is subject to questions of legality and constitutionality that are currently under
investigation. The availability of the approach cannot be assumed et this time and will remain
somewhat in doubt until legal and constitutional questions are resolved.
In the event that the Legislature decides to preserve a site for a potential new airport, the scale and
significance of the project may call for specific action by the Legislature to protect the site, above
and beyond that available to Metropolitan Council under existing laws.
1.6 The Environmental Process
The timing of airport development 10-20 years after acquisition of the properties could affect the
requirement for environmental documentation.
The analysis of site preservation impacts is included in the Dual Track EIS as an issue relating to
construction of a new airport in Dakota County. Site acquisition is considered to be an integral part
of the New Airport Alternative in the Dual Track EIS. Site preservation represents a delay between
land acquisition and actual construction of the airport, and no separate formal environmental
documentation of site preservation is required.
The Dual Track EIS, once its adequacy is determined and a record of decision is issued by the FAA,
would be considered valid for a period of three years. If, in that time period, site preservation
actions are the only actions taken to implement the New Airport Alternative, it is likely that both
federal and state rules would require a re-evaluation of the EIS to determine whether any changes
which have occurred have the potential to affect the adequacy of the EIS. A supplemental
document would be required in the event the changes have been significant. This creates a level of
uncertainty regarding the environmental clearances for the construction phase of the airport.
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1.7 Funding Factors
The purchase price of the properties is estimated at $106 million. Potential sources for funding of
the land acquisition program are:
• Airport revenues
• t'assenger facility charges (PFC)
• Airport Improvement Program (AIP) entitlement grants
• AIP discretionary grants
• State funds, either Minnesota Department of Transportation (MN/DOT) funds or a special
appropriation
I Certain airport expenditures are governed by Majority-In-Interest (MII) clauses, making them subject
to airline approval. The airlines have consistently opposed new airport development and are unlikely
to approve expenditures for site preservation from funds subject to MII approvals. Some airport
revenue is not subject to airline approval, but its use for airport site acquisition would be subject to
priority judgments similar to those for other funds, described below.
AIP entitlement funds (about $4.5 million for MSP each year, assuming full Congressional
apprapriation) are inadequate to meet the costs involved in land acquisition; additionally use of the
funds for this purpose would be in competition with projects designed to meet on-going airport
improvement needs.
tt must be considered unlikely that the FAA wauld allocate limited AIP discretionary funds to site
preservation unless a certain and near-term safety or capacity benefit could be demonstrated. Site
preservation would have to compete with other projects, and allocation of limited funds for this
purpose is not likely.
' 1 Passenger facility charges (PFC) are another potential source of funding, but it must be noted that
� funds are currently earmarked for other projects for the next four years. Also, it is unclear whether
the FAA would approve PFC funds for land purchases without a firm commitment to devote those
' j properties to aviation use.
Annual MN/DOT appropriations would likely be insufficient to cover land acquisition costs without
impacting other commitments througho�t the state.
Private funding is considered as unlikely, given lack of a potential predictable near-term return on
investment.
1.8 Impacts to be Analyzed
The analysis addresses the following areas of impact:
a. Financial impacts on the Metropolitan Airports Commission (MAC). These include:
• acquisition costs
• administrative and relocation costs
• costs of owning and managing the properties
• income from leasing the properties
b. Financial impacts on existing owners of properties to be acquired. These include:
o sale of praperties
• costs of leasing back their existing property
3
c. Financiai impacts for local jurisdictions. These include:
• changes in tax revenues for the affected townships and Independent School District
200
d. Economic impacts. These include:
� • attrition of employment and payroll at farms and businesses in the site preservation area
' � o the cumulative level of economic activity during site preservation, as measured in farm
� and business employment, compared to the level of economic activity without
implementation of a site preservation program
e. Social impacts. These include:
• public infrastructure that would not be built
• private investment that would not be made
• social costs to residents, including impacts on local institutions and organizations as a
result of families choosing to relocate during the site preservation period
f. Environmental impacts. These include:
• potential loss of productive farmland and reductions in incentives to invest in farming
e impacts on groundwater from abandoned feedlots
• changes in wildlife habitat
Impacts are calculated for the land acquisition approach, since this option would generate the
impacts that are most identifiable. The summary paragraphs of Sections 3-6 identify the impacts of
a site preservation program utilizing a possible land use regulation approach under the provisions of
the Metropolitan Land Use Planning Act. For most factors, the impacts associated with the land use
regulation approach are relatively minor.
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SECTION 2- EXISTING CONDITIONS IN THE SITE PRESERVATION AREA
2.1 Site Preservation Area
The site preservation area includes properties designated as the airport site by the Metropolitan
Airports Commission on April 17, 1995. It is located within Marshan and Vermillion townships in
Dakota County.
In addition, the analysis addresses site preservation issues for the properties in the DNL 65 noise
contours and State Safety Zone A. These properties, including 4,000 acres in the DNL 65 noise
contours and 620 acres in State Safety Zone A, are in Marshan, Vermillion, Nininger, Hampton and
Douglas townships, in Dakota County.
Figure 1 depicts the site preservation area.
� The site preservation area does not include properties which would be needed for construction of
highway access to the new airport, or for powerlines and a pipeline to serve airport operations.
Until there is a legislative decision to develop a new airport in Dakota County, the rights-of-way for
- highway access, powerlines and pipeline are conceptusl. With a decision to construct a new
airport, appropriate studies for these projects would be undertaken.
2.2 General Characteristics of the Site Preservation Area
The site preservation area is a rural community generally southwest of the city of Hastings and east
of the town of Vermillion. The Vermillion River runs through the area from the southwest to the
northeast, flowing into the Mississippi River near Hastings.
The predominant land use in the site preservation area is farmland. Most existing farming operations
are owned by lacal families; farms have frequently been in the ownership of a family for more than
one generation and some have been in existence for more than 100 years.
The principal crops are corn and soybeans, although other grains and a variety of vegetables are
cultivated in the area. Commercial nursery operations and a vineyard are also located within the
area. There are feedlots for both dairy cattle and hog production.
Farmland is classified by the federal Soil Conse�vation Service according to characteristics such as
soil quality and moisture supply. Most of the farmland in Dakota County is classified as either Prime
Farmland or Farmland of Statewide Importance. Prime Farmland has .the best combination of
physical and chemical characteristics necessary to produce high crop yields over time. Farmland of
Statewide Importance, while similar to prime farmland, has soil limitations that require more intense
management to produce high crop yields. There is a comparatively small amount of "other
farmland," or land characterized by severe limitations, such as excessive moisture and steep slopes,
that make it virtually unusable for farming. The location of Prime Farmland is shown in Figure 2,
with Farmland of Statewide Importance shown in Figure 3.
It is estimated that more than 90 percent of the farmland in central Dakota County is enrolled in the
U. S. Department of Agriculture (USDA) subsidy, or "corn base," program. Farmland in the "corn
base" program historically commands a higher price per acre when it is sold and when it is leased
to a farm operator. Participants in the "corn base" program are eligible for benefits, including
federal subsidies and interest rates on loans to fund farming operations that potentially could be 3-4
percent lower than that typically charged by most lending institutions. The collateral for such loans
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is the corn crop stored in silos until it is sold, usually when commodity prices reach a level at which
farmers decide they can get a return on the investment they made when crops were first planted.
Farmers are eligible to enroll in the program at a levei calculated on the average acreage planted in
corn for the previous five years; therefore, farmers are not eligible for subsidies and lower interest
rates during the five years while they are working to qualify for the program. Under federal
regulations, the "corn base" runs with the land, so that a farm operator, rather than the owner,
could have the "corn base." Also under federal regulations, the "corn base" is transferred when the
land is sold, although there is no provision in the regulations which would prevent the MAC from
stipulating in lease agreements that farm operators would retain the "corn base."
With the goal of protecting farmland near the metropolitan area from potential redevelopment with
urban and suburban uses, the Metropolitan Agricultural Preserves Act was approved in 1980. Under
the legislation, a farm owner can agree to continue agricultural use of the land for a specified period
of time, thus excluding urban and suburban uses such as higher density housing and
commercial/industrial businesses. This agreement, or covenant, establishes the farmland as an
"agricultural preserve" in perpetuity. If, however, the farm owner decides to leave the agricultural
preserve program, a notice of expiration is filed; the notice of expiration becomes valid eight years
after it is filed. In exchange for agreeing to retain agricultural uses, the farm owner receives such
benefits as a lower assessed valuation of the land and lower property taxes. Figure 4 depicts
agricultural preserve farmland within the site preservation area.
Businesses within the site preservation area generally are dependent upon local farming operations.
Other farm-dependent and general retail businesses are located in nearby towns, including
Vermillion, Hampton, New Trier, Miesville, as well as the city of Hastings.
Within the airport boundary, there are 92 larger farmsteads, 169 single-family residences and hobby
farms, as well as approximately two dozen businesses, both standalone and those operated
alongside a large farm operation. An analysis of 1990 U. S. Census figures indicates that, generally,
there is a higher proportion of residents near or at retirement age living in census tracts where
many farmsteads are located, while there is a higher proportion of residents with younger school-
age children living in census tracts where many single-family residences are located.
2.3 Comprehensive Plans
The adopted comprehensive plans of most Dakota County townships, including Vermillion
Township, date from the late 1970's and the early 1980's. One exception is Marshan Township,
which adopted an amended comprehensive plan and zoning ordinance in April 1993.
The camprehensive plans and the current zoning of the townships reflect their history and current
land use in farming. Most of the 14,100 acres within the site preservation area is designated for
agricultural use in the comprehensive plans. Other comprehensive plan designations include
floodplain/wetland areas and conservation or open space/park uses. A comparatively small amount
of rural residential and commercial is designated on the comprehensive plans. Located throughout
the area are small residential neighborhoods or single residential homes unconnected with a farming
operation. Many of these homes, particularly in Marshan Township near the city of Hastings, were
constructed several years ago and are non-conforming uses under the current comprehensive plans
and zoning ordinances. In both townships, zoning permits one dwelling unit for every 40 (forty)
acres of land.
2.4 Land Use
If the decision is not to build an airport in Dakota County, agriculture will continue as the
predominant land use in the site preservation area. Residential development at densities exceeding
0
one dwelling unit/40 acres, commercial and industrial development are not anticipated under the
provisions of existing comprehensive plans and zoning ordinances.
If there is a decision to build an airport in Dakota County end a site preservation program is
approved and implemented, previously adopted plan designations and zoning for the airport site
would be expected to remain unchanged. This would be the case under either a 10-year or 20-year
site preservation program. Exceptions would be land use designations that wauld be changed to
preserve the airport site.
Immediately outside the site preservation area, to the northeast, is the city of Hastings. Its city
boundary is coincident with the Metropolitan Urban Service Area (MUSA) line. The Hastings
Comprehensive Plan was last amended in 1993; it is expected to accommodate growth until the
year 2000. Along the city's southwestern boundary, the comprehensive plan generally depicts
residential development, with some land set aside for rural and commercial development. Much of
the land adjacent to the MUSA line, on either side, is undeveloped and is expected to remain so
until additional sanitary sewer capacity is constructed. It is unlikely this will occur during the
timeframes for site preservation, given the current rate of population growth in Hastings, which is
about two percent each year.
2.5 Public Improvements
Preservation of the site could affect programs to construct public improvements in the airport area.
Existing public improvements include roads and highways, which are under the
jurisdiction of the Minnesota Department of Transportation (MN/DOT) and Dakota County.
Principal state roads include Trunk Highway (TH) 52 (west of the site preservation area), TH 55
(north of the area), TH 61 (the eastern boundary of the area) and TH 316 (Red Wing Boulevard,
running southeast of Hastings). Principal county roads within the site preservation study area
include Highway 47 (Northfield Boulevardl, Lewiston Boulevard, Highway 48, and some paved
roads, such as 190th Street East and Goodwin Avenue.
Existing wastewater treatment plants are located in Empire, Rosemount and Hastings, outside the
site preservation area. There are no wastewater treatment plants within the airport area; septic
tanks and water wells serve these properties. The proposed five-year Capital Improvement Program
(CIP} of the Metropolitan Council Wastewater Services Division includes expansion of the Empire
plant to accommodate projected population growth in the surrounding area to the year 2009; it is
growth that would be anticipated without a decision to build an airport in Dakota County. Work at
the Rosemount plant could include either phase out, or expansion, of the fecility; this would be
unconnected to development of a new airport in Dakota County. Service to properties in the site
preservation area is not included in proposed expansion of the Rosemount or Empire plants.
The only highway improvement presently contempleted, either by MN/DOT or Dakota County, is an
upgrade of Highway 47 (Northfield Boulevardl, which runs between Hastings and Northfield. This
project, however, is not included in Dakota County's five-year Capital Improvement Program. Other
highway work, such as adding shoulders to existing paved roads, is considered routine maintenance
and is not addressed in this study.
Information about land use, public impravements and potential development in, and adjacent to, the
site preservation area was obtained from officials representing Dakota County, the affected
townships, the city of Hastings and the Metropolitan Council.
SECTION 3- FINANCIAL IMPACTS ON THE METROPOLITAN AIRPORTS COMMISSION
3.1 Introduction
This section addresses the financial impacts for the MAC of acquiring the site, with a 10-20 year
delay in constructing a new airport. Financial impacts for property owners and for government
agencies, including townships in Dakota County and the school dist�ict, will be described in
subsequent sections of this report.
The impacts of site preservation differ from those associated with purchase of the properties for
development of a new airport and construction beginning immediately tollowing the purchase of the
land. The latter case is discussed in the Environmental Impact Statement (EIS) prepared for the Dual
Track Airport Planning Process. The analysis in Section 3 covers both the costs of acquiring the
properties, which would be common to both situations, and costs of holding the land for the period
between purchase and construction.
The financial analysis of the net costs to purchase property for site preservation includes the
following items:
• The acquisition cost of the properties;
• Administrative and relocation costs related to the acquisition process;
• Costs of managing the properties, including leasing costs, once they have been acquired by the
MAC, prior to construction; and,
• Revenue derived from the lease-back or the leasing out of the properties.
3.2 Acquisition Cost of the Properties
The majority of properties within the airport boundary are farms, with the balance being residences
and businesses. The impacts of site preservation on commercial enterprises, apart from the
acquisition cost of the properties and relocation costs, will be discussed in 5ection 6.
The following assumptions were used to estimate the acquisition costs:
1. The properties would be acquired in 1998, the base year.
The estimates of acquisition costs are based on an acquisition value concept that was
adopted for planning purposes. They are not based on appraisals of individual properties
within the airport boundary. As such, the estimates are not directly transferable to
individual property owners.
2. The acquisition cost includes both land and buildings.
3. The acquisition cost of the properties remains constant for the 10-year and 20-year
development scenarios and for the contingency scenario.
The estimated cost to acquire the properties within the airport boundary in the base year is
$106,000,000.
E-�
Properties within the airport boundary consist of 92 larger farmsteads, 169 single-family residences
and hobby farms, as well as approximately two dozen businesses, both standalone and those
operated alongside a large farm operation.
Table 1: Acquisition Cost of the Properties
Propert�es �'� ; �st�mated Acquisition'Cost "
...... ......�.� ..:: ......... ......... ............ ... . .. . ......... ......... .... . .... .........
Farms ; 574,200,000
.................... .. ;.......................................................................
Residences �z} ..............................................� 520,600,000
........... � ...........�..........� ..............................................
Businessesr� .................................................. $11 200 000
................................................................................ :.......................................................................
Total estimated acquisition : 5106,000,000
cost in base year
(1) "Properties" may include more than one legal lot.
(2) "Farms" consist of larger farmsteads, including the residences on those farmsteads,
as well as residences and hobby farms greater than five acres. "Residences" include those
on parcels of five acres or less.
(3) "Businesses" also include the Marshan Township Town Hall, a church and a union
hall.
Sources: Dakota County Assessor; Minnesota Department of Revenue
3.3 Administrative and Relocation Costs Related to the Acquisition Process
The federal Uniform Relocation Assistance and Real Property Acquisition Policies Act (Uniform Act),
approved by Congress in 1970 and subsequently amended, establishes guidelines for the
acquisition of properties for federally-funded transportation projects and for relocating property
owners, businesses and residents displaced by those projects. Relocation assistance includes,
besides actual moving expenses, finding comparable housing and re-establishing a business.
Residents who have owned and occupied their homes for at least 180 days prior to the start of
relocation negotiations are eligible far assistance necessary to buy and relocate to a comparable
dwelling elsewhe�e within a year from the date of displacement. The payment may not exceed
$22,500. Residents who are tenants or who have owned and occupied their homes for at least 90
days prior to the start of relocation negotiations ere eligible for assistance to purchase or rent, and
to relocate to, comparable housing within a year from the date of displacement. The payment may
not exceed $5,250.
Businesses which meet the criteria of contributing materially to the livelihood of its owners are
eligible for assistance to move the business and to re-establish it elsewhere. These criteria, each
applied to the two taxable years prior to the taxable year during which the displacement of the
business occurs, include: (1) having average annual gross receipts of at least $5,000; or, (2) having
average annual net earnings of at least $1,000; or, (3) contributing at least 33 1/3 percent of the
owner's or operator's average annual gross income from all sources. The site preservation analysis.
assumes that some home-based businesses or "hobby farms" would not meet these criteria.
Once the business has been moved, owners are eligible to receive up to $10,000 to re-establish the
business in a new location. This includes, for example, business stationery, advertising and signage.
The Uniform Act aiso provides for moving expenses. Residents and larger businesses would receive
assistance to pay for actual moving costs; smailer businesses would receive actuai moving
expenses, not to exceed $20,OQ0.
All relocation assistance and actual moving expenses are in addition to the costs of acquisition of
the property.
The following assumptions were used to estimate the costs associated with the acquisition
process:
1. The MAC will retain staff, both professional and support staff, on a contract basis to
represent the Commission during the acquisition process.
2. Administrative and relocation costs of acquisition of properties are calculated on each
ownership, regardless of its size (a farmstead or a single-family residential home).
3. The provisions of the Uniform Act are the basis for the calculations.
4. All buildings, including residences and businesses, will remain either to be leased back or
leased out until airport construction is begun. No buildings will be demolished at the time
the properties are acquired.
The estimated administrative costs to purchase properties within the airport boundary and
to relocate residents and businesses, including farm operations, under provisions of the Uniform
Act, would be 530,000,000. The estimated relocation payments to existing owners would be
$11,000,000. Therefore, the total cost of administration of the acquisition and relocation process
and of relocation payments to existing owners would be $41,000,000.
3.4 Costs of Owning and Managing the Properties
To own and manage these properties will involve expenditures for the MAC, including
administrative costs connected with leasing the properties and taxes paid to the townships and the
school district.
During the first two years, considerable time and effort will be expended to establish a management
system for leasing the properties to former owners or to new tenants. Beyond this initial period, the
form and provisions of the leases will be largely standardized. Only the amount of the annual lease
payments are expected to be renegotiated each year.
The following assumptions were used to estimate the costs to the MAC of owning and managing
the properties:
1. The MAC will retain on a contract basis professional and support staff during the first
two years of ownership to establish a management system for leasing the properties and
negotiating the initial leases.
2. Beyond the first two years, one professional and one support staff person would be
needed to manage the properties and renegotiate the lease amounts.
3. The MAC will pay property taxes. It must be noted that other options are available;
namely, negotiated payments by the MAC to local governments and the granting of tax-free
status on the properties by legislative action.
The calculations are based on Dakota County's 1994 assessed valuations and 1995 tax
rates that are applied to the 1994 assessed valuations and the class percentage rates in
force on January 1, 1995.
The calculation of taxes owed to local jurisdictions is based on the assumption that
i properties will be acquired on July 1 of the base year, or later. Notwithstanding other
! statutes, taxes due are calculated on the assessed valuations of properties owned on or
after July 1 of the previous year. Taxes would not be paid in a particular year for properties
�, acquired during the first six months of that year.
4. The MAC will not have homestead status on the properties it acquires and will pay non-
homestead taxes on those properties.
5. The MAC will not benefit from the provisions of the Metropolitan Agricultural Preserves
Act, which provides for lower assessed veluations on farmland enrolled in the program and,
therefore, lower property taxes. The law defines an "owner" of agricultural preserve land as
an individual, legal guardian or family farm corporation, none of which are assumed to apply
to the MAC.
6. The MAC will perform maintenance at these properties.
The annual cost of retaining staff to manage the properties during the site preservation period, on
average, is estimated at 5365,000.
The MAG would perform maintenance on these properties during the site preservation period. The
annual cost is estimated at 5912,500.
The MAC would pay estimated property taxes of $705,098 annually to the local jurisdictions; the
taxes paid to each township are detailed in Table 2. The estimated total property taxes paid
annually, calculated in the base year, are 5604,103. The difference is attributed to the loss of
homestead status once properties are acquired by the MAC. In addition, the MAC would pay taxes
on farmland now enrolled in the agricultural preserve program and receiving tax benefits under
provisions of the Metropolitan Agricultural Preserves Act.
Table 2: Annual Taxes Paid
; Marshan .'�/erm. illion
;:'s Township ; Townsh►p
;:. , Pcopert�es '< Properties iotal
.......:.............p.....p ......y.............::...............,............... �..........................,...........................
.,....... ........ .
Annual ro ert taxes to : 5483 925 ;$221,173 ; 5705,098
be paid by MAC
Sources: Dakota County Assessor; Dakota County Treasurer-Auditor
11
3.5 Lease of Properties
Properties that will be leased out during the site preservation period include farmiand and farm
buildings, homes and businesses.
iFarmland:
The Dakota County Extension Service has surveyed farmland rental rates annuaily since 19$2. The
most recent survey, conducted in Uctober 1994, indicates that virtually all of the annual rental
rates within Marshan and Vermillion Townships range from 545-$76 an acre for non-irrigated land,
� with an average rental rate of $66 an acre. Although no formal survey has been conducted, it is
estimated that irrigated land in the area leases for $120-S140 an acre annually. These figures apply
only to farmland, not to farm buildings. It is the custom in Dakota County to renegotiate farmland
j leases each year.
The trend in agricultural economics is for ever larger farms, with a decrease in the number of farm
ownerships, according to figures from the U. S. Census of Agriculture, Minnesota (1992). This
applies both to crop production and raising livestock. Farming, to be a viable operation, requires
that production costs, including machinery, equipment, production items such as seed, fertilizer and
gasoline, and labor, be spread over an increasing amount of acreage. The Dakota County Extension
Service estimates that a farm operation of 600-800 acres is the most attractive, in terms of
economy of scale. Consequently, farmers seeking to work more acres are interested in leasing
farmland, primarily for the production of grain crops.
A number of assumptions are made regarding leases. Firstly, if farmland in the site preservation
area is leased to farm operators other than the former owners, only the cropland would be leased.
Secondly, animal feedlots would be not leased, unless by former owners who decide to continue
their current farm operations.
Businesses:
There are approximately two dozen businesses within the site preservation area. Most, including
small machine repair shops and a grain elevator near the town of Vermillion, serve the farming
community. Others include trucking companies and construction shops, as well as businesses along
TH 61 that serve Hastings and east central Dakota County. There are also several "home based"
businesses.
It is believed that most businesses, particularly those serving the farm community, will choose to
remain during the site preservation period.
Residential:
Scattered throughout the site preservation area are suburban residential homes that are not part of
either a farming operation or a business. Residences are also found on farmsteads and on business
properties. It is assumed that these homes will be leased at current market rental rates.
3.6 Income from Leasing of Properties
The following assumptions were used to estimate the revenue the MAC would collect from the
lease of properties in the site preservation area:
1. All farmland will be leased each year, whether to its former owners or to farm operators.
The calculations are based on a rental rate of $66 an acre for non-irrigated land and S 130
an ecre for irrigated land.
�
2. Initially, approximately 50 percent of the farmland will not be leased back to their former
owners but will be leased out to other farm operators. It is assumed that residents at, or
near, retirement age would choose to relocate rather than to lease back their properties;
approximately half of those living on farmsteads within the site preservation area, according
to 1990 U. S. Census figures, are at, or near, retirement age.
3. Farm buildings and feedlots located on farmsteads worked by farm operators, other than
the former owners, will not be leased out.
4. Most business operators will lease back their businesses, since most businesses in the
site preservation area are connected to the local farming community. It is assumed the
decision to lease back a business, rather than close it, would be made for such reasons as
family obligations and not for business reasons. The estimated lease rates, averaging 5900
a month, include not only the buildings housing the business, but also the residence that is
typically located on the property. The estimates are based on 1990 U. S. Census figures.
5. Residences which are not part of a farmstead will be leased. It is assumed that all
available houses will be leased though it is recognized that houses leased to new occupants
may be more difficult to rent, given that daily commuting distance to Twin Cities
metropolitan workplaces may be greater than most people are willing to drive.
6. Lease rates on suburban homes, as well as for homes located on farmsteads, are
calculated at 5600 a month, based on 1990 U. S. Census figures.
The annual income the MAC will receive from leasing the properties within the airport boundary,
detailed in Table 3, is estimated at 54,052,800.
Table 3: Annual Income from Leasing the Properties
Annual Lease: Inconie
.....::.: ...:::::: .....:::. - .:...:.. ....::.:. ......:. _ .....:...... . ... :: ...::;.:. .. .:::
Farmland only (no residences) ; 51,190,800
....................................................................................... :..............................................................
Residences (suburban and ; 51,879,200
farmstead homes)
........... � ...............�.............................................
Businesses�rTt ......................................................: $982 000
....................................................................................... s..............................................................
Total ; $4,052,800
"� Includes residences located on non-farm business property.
Sources: Dakota County Extension Service; Uniform Act; 1990 U. S. Census; 1992 Census
of Agriculture; Dakota County Assessor and Treasurer-Auditor; Minnesota Department of
Revenue; Metropolitan Agricultural Preserves Act
3.7 Land Regulation Approach
If it is determined that the Metropolitan Land Use Planning Act can provide adequate and legal
mechanisms for preserving the airport site and that purchase of the properties is not required, the
following actions would pertain to site preservation:
13
e After August 1, 1995, no zoning ordinance or other land use regulations may be adopted by a
local government if those regulations conflict with its comprehensive plan or the metropolitan
systems plans approved by the Metropolitan Council.
• Local governments, such as Marshan and Vermillion Townships, would be required to amend
their comprehensive plans and their land use regulations every ten years, beginning in 1998.
• Amendments to local comprehensive plans must reflect the land use designations in the
metropolitan systems plans in effect on December 31, 1996.
• For amendments to the metropolitan systems plan designating an airport site in Dakota County
that are adopted after December 31, 1996, local governments must amend their comprehensive
plans accordingly within nine months following approval of those amendments.
These actions would involve minor coordination costs to the MAC.
3.$ Regulation of Properties Outside the Airport Boundary
The airport property includes 14,100 acres in Marshan and Vermillion Townships for airport airside
and landside facilities and the federally-mandated Runway Protection Zones. Properties inside this
boundary will either be acquired or regulated.
It is anticipated that properties outside the boundary, in the DNL 65 noise contours and State
Safety Zone A, will be regulated, rather than acquired, to maintain compatible uses in lands
adjacent to the airport. These areas include 4,620 acres in Douglas, Hampton, Nininger, Marshan
and Vermillion Townships.
Potential actions to maintain compatible land uses in areas adjacent to the airport include:
Amendment of state regulations caoverning airports:
Existing regulations govern what is permitted in the state safety zones adjacent to airports. In State
Safety Zone A, which partially overlaps with the federally-mandated Runway Protection Zone,
buildings and uses where people congregate are prohibited. Permitted uses may include, but are not
limited to, agriculture, including crop and livestock production, wildlife habitat, non-spectator
outdoor recreation, auto parking and cemeteries. Existing, non-conforming uses are not affected by
establishment of the zone.
Agricultural preserves legislation:
The Metropolitan Agricultural Preserves Act was enacted in 1980 with the goal of protecting
farmland near the metropolitan area from potential redevelopment with urban and suburban uses.
Under the legislation, a farm owner can agree to continue agricultural use of the land for a specified
period of time, thus excluding such urban and suburban uses as higher density housing and
commercial/industrial businesses. This agreement, or covenant, establishes the farmland as an
"agricultural preserve" in perpetuity. If, however, the farm owner decides to leave the agricultural
preserve program, a notice of expiration is filed; the notice of expiration be.comes valid eight years
after it is filed. In exchange for agreeing to retain agricultural uses, the farm owner receives such
benefits as a lower assessed valuation of the land and lower property taxes.
Several provisions of the agricultural preserves legislation provide a framework for assuring that
! land uses which are incompatible with airport operations are not developed. Specifically, (a) land in
the program must be designated for agricultural use in the local comprehensive plan; (b) public
sanitary sewers and public water systems, both associated with urban and suburban development,
are prohibited in an area where the agricultural preserves program is in place; (c) local jurisdictions
are prohibited from enacting ordinances which unreasonably restrict farming activities within an
' agricultural preserve; and (d) enrollment in the program is recorded on the title of the property.
14
;i
;�
Amendments to the legislation could assure continued long-term agricultural use in areas adjacent ,
to the airport boundary and compatible uses on surrounding properties that are not in the '
agricuitural preserve program. ,
I
Possible amendments include increasing the maximum tax credit, beyond the $1.50 an acre now �
(permitted under the legislation, for agricultural preserve farmland within the DNL 65 noise contours �
� or State Safety Zone A and purchasing an option on farmland in the program which is triggered if '
the farm owner decides to file a notice of expiration.
�Qreement wifih local iurisdictions:
The MAC could enter into an agreement with the affected jurisdictions to confer on planning and
zoning issues as they arise during the site preservation period, with the purpose of maintaining land
uses that are compatible with the new airport.
The comprehensive plans of the affected townships designate most land for agricultural use. Other
land use designations include floodplain/wetland areas and conservation or open space/park uses.
i There are very small areas in the affected townships designated for residential and commercial
uses.
With the exception of some commercial uses and all residential uses, these land uses are
compatible with airport operations. An agreement between the MAC and local jurisdictions to
confer on land use and planning issues as they arise would go far toward assuring that compatible
land uses will be maintained during the site preservation period and that airport construction, when
it occurs, is less disruptive to the community.
Conclusions:
The approaches discussed above for restricting development in the DNL 65 noise contours and
State Safety Zone A would limit the potential for new development which is not compatible with
the airport. In addition, with development restricted during the potential 20-year period of site
preservation, there would be fewer disruptions in the community when airport construction actually
begins.
15
,i
;�
3.9 Summary of Financial Impacts on the MAC
The following table summarizes the estimates of acquisition costs and revenues that would be
incurred by the MAC for the airport development scenarios described in Section 1.2:
Table 4: Summary of Financial Impacts for the MAC
��� Figures in parentheses are negative numbers.
Sources: Dakota County Extension Service; Uniform Act; 1990 U. S. Census; 1992 Census
of Agriculture; Dakota County Assessor and Treasurer-Auditor; Minnesota Department of
Revenue; Metropolitan Agricultural Preserves Act
16
SECTION 4- FINANCIA! IMPACTS ON EXISTING PROPERTY OWNERS
4.1 Introduction
This section addresses the financial impacts on property owners of preserving the site prior to
construction of a new airport.
The analysis does not specifically address the impacts of purchasing the properties for immediate
development of a new airport, although the item labeled "income from the sale of properties" would
be similar for both the immediate construction and the delayed construction situations.
4.2 Income from Sale of Properties
The calculations in this section address the financial implications for existing owners as a result of
selling their properties to the MAC and then leasing them 6ack during the site preservation period,
compared to the costs of existing owners continuing to own and operate their properties during the
site preservation period.
The estimates of income that existing owners would receive from the sale of their properties are
based on the assumptions in Section 3.2. It is stressed that estimated costs to purchase properties
within the airport boundary are based on an acquisition value concept that was adopted for
planning purposes. They are not based on appraisals of individual properties within the airport
boundary. As such, the estimates are not directly applicable to individual property owners.
The estimated income existing owners within the airport boundary would receive from the sale of
their properties to the MAC, detailed in Table 5, is $106,000,000.
Properties within the airport boundary consist of 92 larger farmsteads, 169 single-family �esidences
and hobby farms, as well as approximately two dozen businesses, both standalone and those
operated alongside a large farm operation.
�;
Table 5: Income from Sale of Properties
"Properties" may include more than one legal lot.
�Z� "Farms" consist of larger farmsteads, including the residences on those farmsteads,
as well as residences and hobby farms greater than five acres. "Residences" include those
on parcels of five acres or less.
13� "Businesses" also include the Marshan Township Town Hall, a church and a union
hall.
Sources: Dakota County Assessor; Minnesota Department of Revenue
�i1
4.3 Cost of Leasing Properties
Properties that would be leased include farmland, homes and businesses. Farm buildings would be
leased back to their original owners who decide not to relocate immediately; it is assumed that farm
operators will lease farmland but will not rent farm buildings.
� The estimation of costs of leasing properties from MAC did not take account of the personal taxes
of existing residents; it assumed that farmland now in the USDA subsidy program will retain its
-. "corn base," with the benefits accruing to farm operators, and it assumed that the costs of
� agricultural production and the market value of agricultural products would not change as a result
I
of site preservation.
The estimated annual cost of leasing properties, presented in Table 6, is 54,052,800.
Table 6: Annual Cost of Leasing Properties
, ;. _
'; ' . <Annual Lease Payments
:< :........:...::..............:.:..............:.:..........:: : .......:.......: ....::.... . . ........ . .............. ..............
...
Farmland only (no residences) ; $1,190,800
................................................................................ :.................................................................................
Residences (suburban and : 51,879,200
farmstead homes)
............................ i.................................................................................
Businesses�t'1� ...............................................: 5982,000
................................................................................ :.................................................................................
Total ; $4,052,800
"� Also includes the residence on the non-farm business property.
Sources: Dakota County Extension Service; Uniform Act; 1990 U. S. Census, 1992 U. S.
� Census of Agriculture; Minnesota Department of Revenue; Metropolitan Agricultural
Preserves Act; U. S. Department of Agricultu�e
4.4 Tax Costs Associated with Continued Ownership and Operation by Existing Owners
The following assumptions were used to estimate the tax costs that property owners would incur if
` they continue to own their properties, so as to provide a comparison between the impacts of
continued ownership and site preservation:
1. Market values of the properties will remain unchanged from the base year.
2. Property owners will continue mortgage payments and other financial obligations,
including property maintenance.
�3
''i
3. Property owners will continue to pay property taxes to the townships and to
Independent School District 200, based on 1994 assessed valuations, 1995 tax rates and
class percentage rates in force on January 1, 1995.
The calculations reflect existing homestead/non-homestead status and tax benefits under
the agricultural preserve program.
4. Excluded from the calculations are the costs of farm production and the income from
� the sale of agricultural products. These figures would be essentially identical, whether
farmland is worked by existing owners or is acquired by the MAC and leased out. •
As presented in Table 7, property taxes paid by existing owners if they were to continue to own
; their properties would be 5604,103. Property taxes were calculated for 92 larger farmsteads, 169
�� single-family residences and hobby farms, as well as approximately two dozen businesses, both
standalone and those operated alongside a large farm operation.
Table 7: Annual Cost of Property Taxes with Continuing Ownership
Annual Property Taxes
......... ......... ......... ........ � ...... ... ....... .. .......
......:. : ......:..... ...... ..
Farms : 5283,315
......................................................................... :.......................................................................
Residences : 5288,476
......................................................:.................. :.......................................................................
Businesses : 532,312
......................................................................... :............... � ......................................................
Total ; $604 103
Sources: Dakota County Assessor and Treasurer-Auditor
19
4.5 Summary of Financial Impacts on Property Owners
Tabie 8 summarizes the estimates of financial impacts existing owners will incur when they sell
; their properties to the MAC and lease them during the site preservation period:
Table 8: Summary of Cumulative Financial Impacts For Property Owners �'�
�'� The financial impacts for property owners will be offset by net income derived from farm
operations. It is assumed the figures for cost of farm production and sale of agricultural
products will be essentially identical as prior to the site preservation period.
�2j Figures in parentheses are costs to property owners.
Sources: Tables 6 and 7; HNTB analysis.
Assuming that the legality and constitutionality of the Metropolitan �and Use Planning Act are
confirmed and site preservation is achieved through the regulatory approach, there would be no
financial impacts on the existing property owners beyond market-induced changes in land values
that reflect the designated long-term use of the properties.
20
SECTION 5- FINANCIAL IMPACTS ON LOCAL JURISDICTIONS
5.1 Introduction
This section addresses the financial impacts for the affected townships, and Independent School
District 200, of preserving the site prior to construction of a new airport.
The analysis addresses only the impacts of freezing the uses of the property for an interim period
between purchase (or regulation) and actual construction of an airport on the site. The impacts of
purchase and immediate construction are discussed in the Environmental Impact Statement (EIS)
prepared for the Dual-Track Airport Planning Process.
5.2 Taxes Paid to Local Jurisdictions
The calculations of taxes due are based on the 1994 tax capacity figures for properties in the site
preservation area, the 1995 tax rates applied to those tax capacity figures and the class percentage
rates in force on January 1, 1995.
The following assumptions were used to estimate financial impacts on the townships and the
school district if the MAC were to acquire properties for future development of a new airport:
1. The MAC would acquire properties in 1998, the base year.
The calculation of taxes owed to local jurisdictions is based on the assumption that
properties would be acquired on July 1 of the base year, or later. Notwithstanding other
statutes, taxes due are calculated on the assessed valuations of properties owned on or
after July 1 of the previous year. Taxes would not be paid in a particular year for properties
acquired during the first six months of that year.
2. The MAC would pay real estate taxes to Dakota County, to the townships and to
Independent School District 200. In lieu of this, other options are available, including
negotiated payments by MAC to the local jurisdictions and the granting, by legislative
action, of a tax-free status to the MAC.
3. The MAC would not have homestead status on the properties it acquires and would pay
non-homestead taxes on those properties.
Under Minnesota law, it is possible that once the MAC acquires these properties the former
owners would be eligible for homestead status if they lease back their former homes (MN
Statute 273.19). Whether this statute would apply to the site preservation program
depends on the provisions of the acquisition agreements between MAC and the affected
property owners; therefore, it cannot be estimated with certainty at this time how many
current owners would be affected.
4. The MAC would not benefit from the provisions of the Metropolitan Agricultural
Preserves Act, which provides for lower assessed valuations on farmland enrolled in the
program and, therefore, lower property taxes. The law defines an "owner" of agricultural
preserve land as an individual, legal guardian or family farm corporation, none of which
apply to the MAC.
It is assumed that total tax revenues yielded from agricultural preserve farmland would not
change.
21
5. Approximately 60 percent of total tax revenues are allocated to Independent School
District 200.
In addition, the school district receives state funding. In the 1994-95 school year, the
school district received an average of S3,150 from the state for each student.
While it cannot be determined with certainty how many families with school-age children
would decide to move from the area during the site preservation period, or when they
would relocate, it is estimated that approximately half of the families living in single-family
homes or on farmsteads will choose to relocate out of the school district. On average, there
is one school-age child living in each residence. Families with children who choose to
relocate would result in a loss of state funding for the school district.
6. One capital improvement project now contemplated, but not yet programmed on Dakota
County's five-year Capital Improvement Program, would be deferred. This project is an
upgrade of Highway 47 (Northfield Boulevard), which runs between Hastings and
Northfield. Other highway work, such as adding shoulders to existing paved roads, are
considered routine maintenance and would still be done.
The Metropolitan Agricultural Preserves legislation prohibits the construction of some public
works projects, such as sanitary sewers and water mains, that would be connected to land
enrolled in the program. Since more than half of the farmland in the site preservation area is
enrolled in the agricultural preserve program, it is unlikely that public infrastructure projects,
other than roads, would be constructed while this legislation remains in effect.
The estimated tatal property taxes paid annually, calculated in the base year, would be 5604,103.
The MAC would pay estimated total property taxes annually of S705,098. The breakdown of
property taxes paid by the MAC to Marshan and Vermillion Townships is detailed in Table 2
(Section 3.4). The difference is attributed to the loss of homestead "status once properties are
acquired by the MAC. Although farmland would lose its agricultural preserve status once acquired
by the MAC, there would be no difference in revenue collected by the local jurisdictions, as the tax
benefits accruing to the farm owners are offset, under the legislation, by payments from the state.
The school district would experience a net loss in revenue; like the townships, it would receive
increased tax revenues because the MAC would be paying non-homestead taxes but it would lose
state school funding because of a drop in enrollment. The net financial impacts for local
jurisdictions are detailed in Table 9. (Figures in parentheses are negative numbers.)
Table 9: Annual Net Financial Impacts for Local Jurisdictions
Sources: Dakota County Assessor and Treasurer-Auditor; Independent School District 200;
Minnesota Department of Revenue; Metropolitan Agricultural Preserves Act
�
5.3 Summary of Financial Impacts on Local Jurisdictions
' Table 10 summarizes the estimates of net increases in tax revenues collected by Marshan and
Vermillion Townships and Independent School District 200, as well as state school funding lost by
� the school district as a result of site preservation:
Table 10: Summary of Net Cumulative Financial Impacts For Local Jurisdictions
rIIJ.UfCCi 111 �.1GlIGIlUIC5G5 L11C IIClJ.C1UVC IIUIIIUGIA.
Sources: Dakota County Assessor and Treasurer-Auditor; Independent School District 200;
Minnesota Department of Revenue; Metropolitan Agricultural Preserves Act
If the site is preserved by land use regulation utilizing the provisions of the Metropolitan �and Use
Planning Act, the assessment and tax collection process would continue undisturbed during the
interim period between designation of the site for an airport together with the imposition of the
required land use controls, and the actual construction of the airport. There would be no fiscal
impacts for local jurisdictions associated with the regulatory approach.
SECTION 6 - ECONOMIC IMPACTS
6.1 Introduction
This section addresses the impacts on business employment of preserving the site prior to delayed
construction of a new airport.
The analysis addresses only the economic impacts of freezing development of the airport site for an
interim period between purchase (or regulation) of the properties and actual construction of a new
airport. The impacts of purchase of the land and immediate construction of the airport are
discussed in the Environmental Impact Statement (EIS) prepared for the Dual-Track Airport Planning
P�ocess.
6.2 Existing Economic Activity
Farming is the predominant economic activity in the site preservation area. Approximately 13,000
acres of the total airport property of 14,100 acres are in 92 larger farm operations. The U. S.
Census of Agriculture, Minnesota (1992) estimates the value of agricultural products sold from
Dakota County farms, including crops and livestock, at more than 592,000 annually for each farm
and the cost to operate each farm annually at more than $73,p00. The remaining acreage in is
"hobby farms," suburban �esidences and businesses.
Business activity in the site preservation area includes both agriculture service businesses, general
businesses serving the farming community and businesses unrelated to agriculture or the farming
community. Businesses directly serving agriculture include the grain elevator east of the town of
Vermillion, and businesses serving the farming community include machine repair shops and
construction firms. Other businesses in the area include, for example, trucking firms, light
manufacturing and recreation.
Emplayment involved in this economic activity includes both full-time employees, as well as part-
time and seasonal employees. Also included are hired farm workers.
6.3 Economic Activity During the Site Preservation Period
It is assumed most economic activities would remain during the site preservation period. The key to
this retention is the probability that all farmland within the airport property would be leased for
farming, particularly grain production. Farmland in the area is prized for its high crop yields and for
the benefits it receives. (See Section 2.2)
Because of the commanding influence of the farm economy, businesses serving agriculfiure and
those serving the farming community likely would remain during the site preservation period.
The following assumptions were used to estimate economic impacts from site preservation:
1. Farmland leased back by former owners would be operated essentially as it was prior to
the site preservation period. Farm activities would include grain production, particularly corn
and soybeans, as well as raising hogs and dairy cattle.
2. Approximately 50 percent of the farmsteads would not be leased back by former owners
but will be leased out to farm operators. Farmland on these farmsteads would be used
solely for the production of grain crops. It will increase the size of farming operations for
these individuals.
24
3. With all existing farmland under production, and such factors as weather conditions and
farm economics remaining equal, crop yields and other farm production levels will be
essentially the same as prior to the site preservation period.
4. Hired farm labor would be used during the site preservation period, although the numbers
of hired farm hands would likely change as individual farm operations become larger. Fewer
full-time hands would be needed to work on larger farms because operators would likely use
larger, more efficient, machinery. Seasonal farm hands would be required only during peak
seasons, such as spring planting and the fall harvest.
5. Agriculture-related businesses and those serving the farming community would remain
until the start of airport construction.
6. Other businesses, including non-agricultural businesses and those based in the home and
having no paid employees, would not relocate unless their owners decide to relocate for
reasons unrelated to the business. It is assumed approximately 90 percent would decide to
remain during the site preservation period.
7. If, after 20 years, the project is abandoned and properties previously acquired for site
preservation are sold by the MAC, businesses operating at that time would include farming
and businesses serving the farmers and the farming community. Other economic activities,
such as non-agricultural businesses and those located on smaller farm properties, would
continue to operate at a level similar to that which would have developed if airport site
preservation had not been implemented.
25
In the base year, the estimated employment is 327 and the estimeted payroii is $5,152,220, as
detailed in Table 11.
Table 11: Base Year Employment and Payroll
�'� The analysis covered businesses and farming operations which would potentially qualify
for relocation assistance under the Uniform Act.
�2� Hired farm labor work on farming operations.
�3� "Other" includes government and private, non-profit organizations.
Sources: U. S. Census of Agriculture, Minnesata (1992); U. S. Census County Business
Patterns, Minnesota (1992); 1992 Minnesota Salary Survey, Minnesota Department of Jobs
and Training; Minnesota Employment and Wages, 1992 and 3rd Quarter 1993, Minnesota
Department of Economic Security; and HNTB survey.
During the site preservation period, it is estimated there would be a loss of farm employment,
including 18 full-time farm hands and 85 part-time farm hands, with a parallel loss of payroll of
51,672,240 annually. There would be virtually no full-time farm hands during the site preservation
period. Part-time farm hands would be needed the peak seasons of spring planting and fall
harvesting. Loss of employment in other businesses would be expected to be minor. These impacts
are detailed in Table 12.
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Table 12: Employment and Payroll During Site Preservation
; -< , ;
: Full time; �'art;#irne
;; ; ;
> ;; : Empinyment Emplo,yrne�t;, Payroll Qunng `
During Siie During Site : 5ite Preser�at�on. !:
;; ': ;' i : Preservation ,. Prese�vatiorr >
..Farming Izj :.........................�..,....... ..............:2..................�..................1:9................. ...�.....$200,�160........
......g ...............................g......................:........................................;............................................:....... ....
............................... ..
A riculture servin 45 73 51,904,300
businesses and those
serving farm community
...............g................................................c........................................:............................................:............................................
Non-a riculture businesses 47 12 $1,360,520
............. . i........................................:........................••-.................i............................................
Other �ar .............................................: 0 ; 1 ; $15,000
..................................................................:........................................:••••........................................:............................ ••-•
......... ..
Total 94 105 53,479 980
"� The analysis was of businesses and farming operations which would potentially qualify
for relocation assistance under the Uniform Act.
j2� Hired farm labor work on farming operations.
13� "Other" includes government and private, non-profit organizations.
Source: Table 11 and HNTB analysis.
6.4 Comparison of Levels of Economic Activity
It is essumed that most businesses would remain active during the site preservation period.
Annual payroll figures have been used to estimate the difference between the level of economic
activity during the site preservation period and the level that would have occurred if a site
preservation program were not implemented. The estimates are based on the assumptions
delineated in Section 6.3. It is assumed that employment at these businesses would remain
essentially even throughout the site preservation period.
27
The estimated annual payroll during the base year, compared with the estimated annuai payroll
during the site preservation period, is presented in Table 13.
Table 7 3: Comparison of Annual Economic Activity
, ; , ;;
;: Annual. Payroll ,.,: Annua] Payroll
Without Srte During Site Lnss of .Payroll ':
Preservatron Presarvatio.n ' Durmg S�fie ;:
......:. ........: ........:........ ' Presecvation ' :
: ..... .,: .....:::. ...... .. . .....�:........ . . ........: .. . � :...
.... ......
Farming (includes hired farm 51,258,560 5200,160 ;(51,058,400)
labor)
.................................................................... :.............................................. :............................................:.....................................
Agriculture serving business 52,256,340 51,904,300 (5352,040)
and those serving farm
community
.................................................................... :.............................................. :...............••.......................... ;.....................................
Non-agriculture businesses $1,589,320 $1,360,520 (5228,800)
.................................................................... :.............................................. :........................................... :.....................................
Other S48,000 515,000 ($33,000)
..................................................•••••............. :.............................................. :.........$ 3, 47 9................ . .
.. :.......... ........................
Total $5,152,220 ,980 ; ($1 672,240)
Sources: U. S. Census of Agriculture, Minnesota (1992); U. S. Census County Business
Patterns, Minnesota (1992); 1992 Minnesota Salary Survey, Minnesota Department of Jobs
and Training; Minnesota Employment and Wages, 1992 and 3rd Quarter 1993, Minnesota
Department of Economic Security; and HNTB survey.
The total loss of payroll would be $1,672,240 annually.
The impacts discussed above were estimated for the land purchase option. The impacts, which are
based on probably responses to the threat of eventual elimination of the businesses, would be
identical if the land use regulation approach were to be used.
2$
SECTION 7 - SOCIAL IMPACTS
7.1 Introduction
This section addresses only the social impacts of freezing development for an interim period
between purchase (or regulation) of the properties and actual construction. The impacts of
purchase of the land and construction of a new airport on the site are discussed in the
Environmental Impact Statement (EIS) prepared for the Dual-Track Airport Planning Process.
7.2 Guidelines for Determining Social Impacts of Site Preservation
The Federal Aviation Administration has established guidelines for analyzing social impacts, or
community disruption, associated with airport projects. Using these guidelines as a framework,
social impacts resulting from site preservation actions would include relocation of residents and
businesses, disruption of established institutions in the community, disruptions in the planned
development of public infrastructure and in investment in private property.
The evaluation of social impacts addresses:
• Disruption of the way of life of the community; and
o Social costs to residents, such as chenges in programs et local institutions and organizations
triggered when families choose to relocate during the site preservation period and there is a
change in participation in these activities.
• Public infrastructure projects that would not be built during the site preservation period; and
• Private investment that would not be made during the site preservation period; and
Social impacts would be temporary in the sense that they would apply only to the period between
designation of the site and actual construction of the airport. For example, investments in
infrastructure and private property during the site preservation period would be sufficient to meet
short-term needs. If, after 20 years, it is determined a new airport is not necessary because growth
in air traffic is slower than anticipated, then investments would be made.
7.3 Sociallmpacts
Disruption of the way of life of the community:
Construction of a new airport would remove from the area farm families, some of whom have
owned and worked their farms for several generations and who have strong commitments to the
land, to the community and to the lifestyle.
A site preservation program would create a period of disruption for these families, short of their
ultimate removal from their properties. It would be a period during which they would be leasing
rather than owning their land. Any negative social impacts would be offset by the additional time
that residents would have during this interim period to decide to relocate.
Social Costs:
It is assumed that residents choosing to relocate during the site preservation period would initially
include families with younger children and thase of retirement age. Older residents may view
implementation of the site preservation program as an opportunity to retire, to sell their farms and
to relocate out of the area. Families, particulerly those with younger schoolage children, may
choose to relocate out of the school district so as to provide their children with a continuous
education in one school district. Most of these families, according to 1990 U. S. Census figures,
reside predominately in single-family homes and hobby farrris in the site preservation area.
29
An analysis of 1990 U. S. Census figures indicates that, generally, there is a higher proportion of
residents near or at retirement age living in census tracts where many farmsteads are located, while
there is a higher proportion of residents with younger school-age children living in census tracts
where many single-family residences are located.
Given the assumptions regarding those who may choose to relocate and the analysis of census
figures, it is assumed that those living on 47 of the 92 larger farmsteads would move from the area
during the site preservation period. It is also assumed that 29 families who, according to 1990 U.
S. Census figures, are living in single-family residences and hobby farms and have younger school-
age children would choose to relocate.
These decisions will impact institutions in the area. School district officials have indicated there is
one school-age child, on average, living in each residence; the reduction in enrollment, therefore,
would be 76 students. As a result, there would be fewer children participating in activities serving
these youngsters; these groups include, for example, scouting troops, church groups, athletic
teams (baseball, soccer and football). In addition, organizations that their parents frequent, such as
church groups and social service organizations, would lose participants. The numbers of people
using services for senior citizens would decrease.
Public Infrastructure:
The only infrastructure project presently contemplated is an upgrade of Highway 47 (Northfield
Boulevard), which runs diagonally through the site preservation area, between Northfield and
Hastings. As yet, the project is not included on the Dakota County five-year Capital Improvement
Program.
It is unlikely that public infrastructure projects, other than roads, would be constructed while the
Metropolitan Agricultural Preserves legislation remains in effect. The legislation prohibits the
construction of some public works projects, such as sanitary sewers and water mains, that would
be connected to land enrolled in the program. More than half of the farmland in the site
preservation area is enrolled in the program.
Private Property:
It is anticipated that investments in private property other than those that are essential to the short-
term well-being of the properties, would be deferred during the site preservation period. The extent
of deferred investments is not quantifiable.
Routine maintenance to existing buildings, would be done when necessary. Residences will be
maintained to provide habitable dwellings for families.
Crop production, particularly that on larger operations worked by former owners or other farm
operators, would continue. Buildings used for crop production, as well as drainage systems and
grain storage, would be maintained so as to assure a functioning farm operation and high crop
yields. Other investment, such as construction of new buildings and major improvements to existing
buildings, would be delayed or not done during the site preservation period.
Livestock production would continue on farmsteads leased back by previous owners. However,
feedlots on farms worked by farm operators would be abandoned when livestock production
ceases.
Freezing development of the site through acquisition or regulation for an interim period between the
site preservation actions and construction of an airport would have modest impacts on the social
structure of the area above and beyond those associated with immediate construction of an airport
on the site. The impacts would be similar in the situations where the land is acquired and where the
fand use regulation approech is used.
30
SECTION 8 - ENVIRONMENTAL IMPACTS
8.1 introduction
The analysis addresses only the erivironmental impacts of freezing development for an interim
period between purchase (or regulation} of the properties and actual construction. The impacts of
purchase and immediate construction of a new airport are discussed in the Environmental Impact
Statement (EIS) prepared far the Dual-Track Airport Planning Process.
The environmental impacts of preserving a site for a new airport are directly connected to the
nature and extent of change in existing activities within the site preservation area. These impacts
are minor and would apply similarly to the situations where the land is purchased and where use of
the land is regulated.
The evaluation of environmental impacts addresses the following issues:
0 The potential loss of productive farmland and reduction in incentives to invest in a farming
operation;
• Hog and dairy cattle feedlots; and
• Wildlife habitat.
8.2 Potential Loss of Productive Farmland
Farming is the predominate activity in the site preservation area. Approximately 13,000 acres of the
airport property is in 92 larger farming operations. Farming would be expected to continue at its
current levels during the site preservation period, as farmland in central Dakota County is prized for
its crop yields and many farming operations receive financial benefits, such as USDA subsidies and
agricultural preserve tax benefits.
Farm operators, leasing farmland from the MAC, would be expected to continue the investment as
needed to maintain crop yields. This will include, for example, routine maintenance and repair of
drainage and irrigation systems, and use of fertifizers and crop rotation.
8.3 Hog and Dairy Cattle Feedlots
It is assumed that farmland leased by farm operators, not leased back to former farm owners,
would be used solely for crop production and any livestock production be discontinued. Abandoned
hog and dairy cattle feedlots would represent a potential environmental problem unless appropriate
mitigation measures are taken.
Approximately 10 of the 92 larger farm ownerships currently produce livestock, including hogs and
dairy cattle. Livestock generally are kept in feedlots, defined as an enclosure where manure can
accumulate and vegetation cannot grow.
When the number of feedlot animals reaches a threshold (6 or 7 dairy cattle or 25 hogs) end when
a new or expanded feedlot is proposed, a feedlot permit from the Minnesota Pollution Control
Agency (MPCA1 is required. The aim of the feedlot program, initiated in 1971, is to manage manure
to prevent water pollution, particularly of the ground water.
MPCA records indicate that, since the program began, eight feedlot permits have been granted to
farm operations within the airport area. Most of these feedlots are not operating and MPCA
regulations do not require that the agency be notified when a feedlot is abancloned. Other feedlots,
31
presumably with fewer animals than the numbers which trigger an MPCA permit, were observed in
a survey of the site preservation area.
Research reviewed by the Minnesota Department of Agriculture and MPCA in a December 1991
report for the Legislative Water Commission, entitled "Nitrogen in Minnesota Gr.ound Water,"
indicates that abandoned feedlots pose potential hazards for the ground water supply and suggests
methods to mitigate those hazards.
In feedlots that are used continuously, the manure pack covering the ground provides a"soil seal,"
preventing most pollutants and, specifically nitrogen, from seeping into the soil below and, then,
into the ground water supply.
However, when feedlots are no longer operated, this "soil seal" dries and cracks, or freezes and
thaws, permitting pollutants to go below the surface of the soil and into the ground water supply.
One study cited in the 1991 report indicates that nitrate in the soil under abandoned feedlots was
more than five times higher than that below active feedlots.
These hazards would be an environmental impact if, as assumed in the site preservation analysis,
farm operators choose to abandon existing feedlots on farmland they lease from the MAC. Any
potential negative impacts on groundwater quality could be mitigated through actions to remove
the manure pack and would be accomplished as part of the acquisition process.
8.4 Wildlife Habitat
Existing wildlife in the site preservation area are species typically found in farml�nd areas.
Because the land is intensively farmed, with approximately 13,000 acres in larger farm ownerships,
there is little upland forest, grassland or wetland remaining for wildlife to inhabit. Most of the
upland forest is found in small farmstead woodlots, windbreaks and pine plantations. Wetlands are
in a portion of the Vermillion River floodplain east af Goodwin Avenue. These wetlands have been
altered, with trees removed from the floodplain and adjacent wetlands drained for farming.
It is assumed there will be no loss of productive farmland during the site preservation period and
that farm production, particularly of grain crops, would remain at current levels throughout that
time. Thus, it is assumed that a site preservation program would not result in a change in wildlife
habitat, compared to existing conditions.
32