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A county vs. city lawsuit over redevelopment of the former Twin Cities Army Ammunition Plant will resume, now that mediation talks between Ramsey County and Arden Hills have failed.

The judge in the case has ordered a hearing for March 19 in the suit, which was filed last spring by the county to end its power-sharing agreement with the city.

The two sides are battling over density and the amount of affordable housing to be built on the 427-acre site renamed Rice Creek Commons, the largest shovel-ready tract of land in the county and equivalent in size to downtown St. Paul.

Arden Hills leaders envision a spacious suburban community that mirrors the city's existing neighborhoods. County officials, concerned about a housing shortage, prefer a denser development more akin to urban tracts.

City and county leaders and a mediator have been meeting behind closed doors for six months, trying to hash out a deal for the site in the northern suburb. But in the end they were unable to reach an agreement to either proceed with redevelopment or end the power-sharing agreement meant to guide development.

"It has become abundantly clear that the redevelopment cannot advance under the framework established in the parties' Joint Powers Agreement," attorneys for Ramsey County said in the filing.

A preliminary plan approved by both the city and county called for a mix of offices, businesses and 1,460 housing units with 10% of them affordable. But county leaders now say that, given the housing crunch in the region, they need to build as many as 2,500 homes with at least 20% of them affordable.

Ramsey County bought the site from the federal government in 2012 with the city's blessing and has already spent more than $40 million on the project.

"As the land owner, Ramsey County is committed to moving forward with this transformative development to include a mix of housing, retail and commercial property," said Kari Collins, the county's Community and Economic Development director, in a statement.

Arden Hills released a statement saying its leaders went into mediation in good faith and were disappointed a solution could not be reached.

"The city places great importance on ensuring that the Rice Creek Commons development is properly funded and sustainable without putting the development, or the entire city, in financial jeopardy," according to the statement.

"The city consistently values a process for making decisions about Rice Creek Commons that is transparent for its residents and area taxpayers. Arden Hills will continue to pursue fair outcomes that are in the best interest of current and future residents, businesses and the city as a whole."

The Alliance for Metropolitan Stability, a coalition of nonprofits fighting for economic, environmental, health and racial equity, also wants a seat at the table to ensure that the development includes an adequate supply of affordable housing — particularly for families of color "with a disparate need for such housing," according to court filings.

The group has filed a motion to intervene, arguing that Arden Hills' "actions and policies have frustrated the Alliance's mission of advancing racial justice and housing opportunity." That motion will be heard at the March 19 court hearing.

"The worst, and not unlikely, potential outcome would be that the city prevails and the project proceeds with current plans for little or no affordable housing on the site," according to court documents filed by the Alliance.

John Cann, attorney for the Alliance, said Alliance members believe that Arden Hills officials are using their land-use power to block the construction of affordable housing, which would be a violation of the federal Fair Housing Act.

"The city has a history of resisting affordable housing and digging their heels in," Cann said.

Arden Hills has about 10,300 residents, according to U.S. Census Bureau records. It's listed as 87.4% white, 6.2% Asian and 4% Hispanic, and nearly 87% of its residents own their homes.

Shannon Prather • 651-925-5037