By Lori Carlson, Editor 

With help from a developer, the Scott County Community Development Agency (CDA) is proposing to redevelop the corner of Main Avenue and County Road 21 currently occupied by a flower shop and two other businesses.

The area includes buildings currently housing Flowers Naturally, the Professional Building and Monnens Lumber Supply. City Council members sought proposals for downtown redevelopment this spring and summer but only got one proposal, a joint plan from Dunbar Development and the CDA, which also completed the Hamilton Building in downtown Savage and River City Centre in downtown Shakopee.

The CDA and Dunbar have proposed a four-story mixed-use development of independent senior housing and retail shops. The development would include 11,200 square feet of retail space on the street level with 54 senior apartment units above the shops. Residents of the apartments would park in a 54-stall underground ramp, but no public parking plan has been established.

Bill Jaffa, the CDA’s executive director, said the agency sought an independent analysis from Maxfield Research on the local market for senior housing.

“We wouldn’t have submitted a [proposal] if we didn’t get the nod that there’s a market,” Jaffa said during a City Council workshop Monday.

The retail aspect could be removed from the proposal if the council decides the market isn’t strong enough, he added.

But Councilman Chad LeMair said the mixed-use concept is important to the city’s redevelopment efforts.

“If we did all residential, that would help our downtown,” LeMair said.

Frank Dunbar, president of Dunbar Development, said in his experience, senior housing ultimately draws retail customers.

“These seniors attract people. They don’t go out to people; people come to them,” Dunbar said. “People come to visit, and they go out to lunch or shop. It’s a good magnet.”

Jaffa said money for the project most likely would come from tax-exempt bonds issued by the CDA as well as possible Livable Communities grants from the Metropolitan Council.

LeMair pointed out that though Burnsville’s Heart of the City redevelopment project has seen successes, it’s also seen developer pull-outs and foreclosures. The Burnsville council also recently decided to add more parking because of complaints from customers and business owners about a lack of parking close to retail stores.

Jaffa said Burnsville “went into it very ambitious” in a time when the current market slowdown wasn’t so obvious.

“They weren’t looking around the corner expecting a financial downturn,” he said.

To proceed with the development, the CDA would have to secure a “master tenant” or have a significant amount of the retail space pre-leased, Snook said. The CDA would work with the city to acquire the properties, and eminent domain is not out of the question.

Downtown Prior Lake business owners received a letter from the city this spring that stated the city’s intent to redevelop the area, including the possibility of property acquisition for redevelopment.

When the city posed a series of written questions to the CDA, the agency responded by writing, “We would like to have further discussion on this topic. In the past, the CDA has used eminent domain in other communities.”

Eminent domain was used to acquire property, and the city of Shakopee created a tax-increment financing district, for the River City Centre. No eminent domain was used in the Hamilton building project in Savage.

Jaffa said the River City project, which consists of “pure retail and office” space on the first level, has been a success.

“Occasionally you get your vacancies, but the master tenant [Suntide Realty] has been able to fill that space,” he said.

Parking

Prior Lake council members long have considered parking one of the greatest challenges in redeveloping downtown. A 2004 parking study showed the downtown area could be up to 1,000 parking stalls short once the area is redeveloped. The council has suggested the need for a parking ramp in the long term, but Dunbar said Monday that he has repeatedly found that suburban customers don’t like to use ramps for shopping.

“We’ve found that you really need surface parking,” he said. “In the suburban customer mindset, they wouldn’t park on the third floor of a ramp, walk down to a store, shop and then walk back to the ramp again.”

Tough market

City staff contacted other developers and asked why they did not submit proposals. They found the main reasons included the sluggish economy and the future plans for a right-in, right-out access at Main Avenue and County Road 21, which developers saw as a “major drawback,” according to a report from Paul Snook, the city’s economic development director.

Some developers said they would be interested in submitting proposals in the future, assuming housing and retail markets rebound, Snook said.

The CDA and city staff will work on an updated report based on council feedback at the workshop and prepare a plan to bring to an upcoming council meeting, City Manager Frank Boyles said.

 Lori Carlson can be reached at (952) 345-6378 or editor@plamerican.com.