The Heights — the East Side development area formerly known as the home of the Hillcrest Golf Course in St. Paul — will soon have its first industrial occupant. Xcel Energy announced it has signed a $6 million agreement with the St. Paul Port Authority to purchase 20 acres of land for its new east metro operations and job training center.
Plans call for a commercial-industrial building spanning at least 150,000 square feet off McKnight Road and Arlington Avenue, as well as a training facility spanning 30,000 square feet, and storage and service areas. Modern amenities will include electric vehicle charging stations — Xcel Energy plans to convert its entire automotive fleet to electric vehicles by 2030.
The new location, which will be primarily office space, will replace Xcel’s outdated Rice Street Service Center, which has served St. Paul for roughly 100 years but isn’t well suited to do so into the future, according to company officials. The Rice Street Service Center has about 375 employees who support natural gas, distribution operations and other functions.
John Marshall, a regional vice president of Xcel Energy, said vintage photos of the Rice Street space feature old train cars rolling by the operations center. The new location will be twice as large.
At the Heights, he predicted more commercial interest to come.
“We’re the first ones coming in,” said Marshall, who is also a commissioner on the Port Authority. “The Heights is zoned for light industrial and residential, and there’s tremendous interest for both.”
More development expected
Nicolle Goodman, the city’s director of Planning and Economic Development, told members of a community lunch gathering in downtown St. Paul on Friday that they could expect more news to follow about future development at the Heights. The Port Authority, which acquired the 112-acre site nearly four years ago, has called for 1,000 units of residential housing and 1,000 light industrial jobs, which they’ve called a boon for the historically working class corners of the East Side.
The Port Authority’s credit committee will review the 20-acre land purchase agreement on Tuesday, and then the Port Authority’s full board will vote immediately after. The land is being sold at market price — $8.00 per square foot of land — without a business subsidy, according to a staff report to the committee.
The purchase price is technically $6.5 million, but Xcel Energy has agreed to design the site in accordance with the Port Authority’s “carbon-free community” goals and strategies, according to the staff report. Under the escrow agreement, that would make Xcel Energy eligible for a $500,000 refund.
The Minnesota Department of Employment and Economic Development last year awarded the Port Authority $701,000 in redevelopment grant funds for demolition and public infrastructure improvements on the site. Xcel Energy, as part of its land buyer obligations, must commit to maintaining at least 350 full-time employees at the location for 10 years.
Land sale to be finalized this summer
The land sale likely will be finalized this summer. A groundbreaking could take place in early 2024, with some broader site preparation likely moving forward this year. The new facility could open in late 2025.
Todd Hurley, president of the St. Paul Port Authority, said in a written statement that Xcel Energy’s mission and commitment to job training “aligns perfectly with the St. Paul Port Authority’s mission. This a big win for the city of St. Paul and its Greater Eastside community.”
Also Tuesday, the Port Authority is likely to approve a $25 million contract bid for demolition, soil remediation, site grading and other clean-up throughout the former country club and golf course property.
The lowest apparent responsive bidder among six bidders is Carl Bolander and Sons Co., though staff are still reviewing the initial bid details.
