An artist’s rendering of the proposed exterior of a five-story apartment complex planned by Gaughan Companies for the old city hall site in Forest Lake.
After engaging in a preliminary development agreement with the city last summer, local developer Gaughan Companies presented earlier this month a proposal for a five-story, upper-scale, 101-unit apartment complex, along with a restaurant, to be built on the site of the old city hall at 220 Lake St. N. A split Forest Lake City Council approved a final development agreement with Gaughan on Jan. 23.
Gaughan’s proposal takes advantage of the city’s offer to sell the property for a dollar to the right developer but would also request that the city establish a 14-year tax increment financing district to help pay for the infrastructure improvements that would need to occur in the area before the apartments could be built. If, for some reason, Gaughan does not build the proposed apartments, the land would revert back to the city.
The council had mixed feelings about the project when members discussed it during their Jan. 17 work session. They universally praised the building design and were excited by the prospect of getting the property back onto the tax rolls, but some of the council members were concerned about the amount of parking, which at 1.6 stalls per unit is significantly below city recommendations, and by the absence of retail space and quality job creation in general, which some members indicated they would like to see before considering a TIF district.
“It’s more about the type of jobs,” Councilman Michael Freer told The Times after the work session. While he said the restaurant would likely bring in jobs, he didn’t believe they would be long-term, high paying jobs, and he added that details on the restaurant have been scarce.
During the Jan. 23 meeting, Freer reiterated that he was against listing the land for a dollar to begin with and said that coupling the cheap sale with a TIF district seemed like too much for the city to give away. Under a TIF district, the property’s unimproved tax value would still be taxed to the various municipalities that collect property taxes, but the majority of revenue from taxes due to the improved property’s increased value are captured separately in order to fund infrastructure improvements. Under the development agreement, Freer said Jan. 23, the city would essentially be giving the land away and then paying Gaughan to do the demolition of the old city buildings there.
“This is way too much TIF money for a project like this,” he said.
Councilman Ed Eigner joined Freer in their minority vote against the development agreement. He pointed out that when the Economic Development Authority originally discussed the cheap listing, it hoped that the site would become mixed-use, not purely or primarily residential. Some EDA members were also against using TIF funds at the site if the land sale was already essentially free.
“The conditions when the EDA put it up for a dollar would that there would be some … retail, and there is not,” he said, adding that if the city was going to establish a TIF district, he would prefer that it did so on the east side of Lake Street, where some of the downtown buildings are in a more obvious state of disrepair.
Councilman Ben Winnick said he shared the men’s concerns, as well as concerns about parking. Though the current Gaughan plan only includes 165 parking stalls, the developer also hopes to utilize 56 stalls on city-owned land that would be created by the vacation of Third Avenue Northwest, along with 17 stalls that would be created along Second Avenue during site improvements. However, some of those parking spaces would likely be used for restaurant parking, not as residential units.
Despite his concerns, Winnick said he felt that the council had impressed on Gaughan its interest in installing more commercial space on the land, perhaps along Second Avenue, as well as its concerns about parking. He, along with Council Members Mara Bain and Sam Husnik, stated that they believe the influx of good, high-amenity housing (the project will include a rooftop deck, a fitness center and other modern features) in a walkable downtown could jump-start commercial interest in the area, which is often neglected by developers in favor of land closer to the Broadway corridor.
“If we have 100 upper-scale apartments and spending power there, I think that is going to help … downtown to grow,” he said.
Husnik stressed the importance of starting the process of ultimately generating more tax base for the city.
“One of the reasons we considered the TIF project here is the project has been sitting here for quite some time and really hasn’t been in the tax base for years,” he said.
During the meeting, Dan Hebert, Gaughan sales and leasing associate, estimated that the project would likely be an investment of $13 million to $15 million for Gaughan. The company hopes to get final building plan approvals in March, start demolition in April and begin construction in May, targeting May 2018 for an opening date.
After the meeting, Hebert told The Times that the company was comfortable with its parking levels but said the company was willing to add more commercial space to the site, probably closer to the restaurant than on Second Avenue, allowing the apartment complex to retain its first floor walkout access. Though the 96,000-square-foot building will be five stories tall, it will be comparable in height to the four-story Cherrywood Pointe, because the apartment complex will not have a vaulted roof. Most of the apartment units will be one- or two-bedroom units.
PetSmart
In other development news, The Forest Lake Times has learned that a PetSmart is coming to Forest Lake, next to Aldi.
The pet supply retailer will be located at 299 12th St. SW, in part of the Westlake Center that used to house Rainbow Foods, city staff confirmed last week. Aldi has occupied the other part of old Rainbow site since the summer of 2014.
The property where PetSmart will be located is owned by Glenborough LLC, which last fall began working with Tim Horton’s to bring the restaurant to the old Crown Auto building. Glenborough representatives did not return a call before press time.