Posted: 3/27/02

New twists for downtown

Cliff Buchan
News Editor

Two downtown redevelopment plans took steps forward Monday, but a third effort found itself facing a deadline that may make or break the plan.

At its regular meeting, the Forest Lake Economic Development Authority board heard a positive status report on E. Broadway public improvements and agreed with a plan to have the city go out for bids on the work.

That should pave the way for construction to begin this spring on The Plaza, a 22,000 square foot office/retail complex planned by Gaughan Properties, Forest Lake.

The EDA also voted to execute a development agreement for the Happe, VerBout, Finnemann housing/commercial project on the south end of N. Lake St. The agreement is subject to review by city and EDA staff, but puts in place the plan that could lead to construction later this year.

But all is not so orderly for a third downtown proposal.

A local business group that includes Peter Paidar, Mike Muske and Ron Vannelli has been working since the fall of 2000 to construct a restaurant/banquet hall facility on what is municipal parking lot land near the north boundary of Lakeside Memorial Park. The developers were given 18 months to put the plan together following Paidarís sale of the mini-golf site to the city.

No agreement

It was clear from Mondayís EDA discussion that the EDA and the Paidar group donít see eye to eye on the project and what has been accomplished and the roles of the EDA and the developer.

Paidar aired his grievances with the board with an appearance sparked by a letter from the EDA questioning the status of the progress to date.

Paidar challenged the board, saying numerous meetings have taken place and the developers have moved forward. He said the group has purchased the former Klein Johnson building which now houses an American Family Insurance office.

Paidar said his group has had meetings with other property owners in the downtown and has been waiting since October for concept approval by the EDA of the restaurant project.

ìWe need a little direction,î Paidar said. He said the group was serious about proceeding with the project and was anxious to complete the final development agreement.

Paidar said he was ìput outî by the tone of the EDA and said the EDA and city staff have been lax in supplying information to the developers.

Issues to debate

Under the proposed plan, Paidarís Forest Lake business, the insurance office and the Forest Theatre building would be removed to provide parking in the downtown to replace the parking lost by construction of the restaurant.

Paidar said his progress has been slowed by the lack of a city plan showing the new parking and the disposition of the public boat landing at Lakeside Park. A disagreement over who is to acquire the property also is in the mix.

City officials disagree with Paidarís views.

Chip Robinson, EDA executive director, said it has been the EDAís position to provide parking that will accommodate the restaurant and other businesses downtown. But it has not been the EDAís intention to negotiate land sales for the group, he said.

Tom Lynch, acting president on Monday, said unless he suffered from a ìbrain cramp,î there has been no EDA intention to get involved in such negotiations.

EDA staff confirmed they have received some details from the developers, but not enough, to prepare a formal development agreement for the project.

Of key concern is the Paidar groupís failure to provide a financial feasibility plan to show that the project will work. The EDA has also asked the developers to show a tenant list if the local group is not to be involved in the operation of the business.

While Paidar said the group was ready for the final development agreement which would include the feasibility study, Robinson questioned the order.

ìIím really confused,î Robinson said. ìHow can you proceed to a final development agreement without knowing if the project would work? Why would you do that?î

Time in question

How long the developers have in their 18-month window to complete the project was also debated on Monday.

The initial agreement for developerís rights was approved in the fall of 2000, with the deal signed in October and extended to November.

EDA officials said Paidar should work to have the final details together in 30 to 60 days. A period of 45 days was suggested as a guide for the developers in pulling together details.

Lynch, speaking on behalf of the board, urged the Paidar group to ìfill in the blanksî regarding project details or consider this as the time to ìthrow in the towel.î

Paidar left the meeting committed to seeing the project through to completion.

Preliminary estimates prepared by the group show a $1.5 million investment for real estate and construction to get the project finished.

Other projects

The EDAís approval Monday of the Happe development agreement with contingencies sets the bar for possible EDA financial involvement.

The group has acquired property from My Place to the Van Wirt building, but is yet to strike final deals to buy the Van Wirt property and the three store fronts owned by Perry and Lou Shellner. If the developer cannot negotiate a sale, the EDA will step in with its power of eminent domain to assist the project.

The agreement OKíd Monday sets the acquisition price of the two parcels at $400,000 for the developers. The agreement calls for the EDA and city to pick up the balance over and above the $400,000. The city will assist with the negotiations.

With several purchase agreements due on April 1, the EDA agreed to move forward with the framework of the agreement. City and EDA Attorney David Hebert said a computer problem prevented submission of the agreement for review.

City engineers and planners shared details Monday on sewer, water, storm sewer, streets, lighting and landscaping planned for E. Broadway and the new municipal parking area south of E. Broadway.

The EDA is using its power of condemnation to acquire property owned by Howard and Anne Ruggles needed for the parking and drive area. Hebert said title should be acquired this spring thus freeing the Gaughan project to break ground.

Court-appointed commissioners will determine the fair market value price for the land.

Infrastructure costs are expected to be near $900,000 for construction alone, plus fees for professional services.

City Engineer Paul Hornby said bid advertisement would take place in early April with a contract award in early May.

The project would be bonded by the city. Bonds would be paid by tax-increment financing dollars generated by the city from the new development. No assessments to property owners are anticipated.

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