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Continued: Penfield project scaled back; Opus drops Hopkins site

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Four years after it was proposed as a signature development for downtown St. Paul, the Penfield is getting a makeover that will substantially downsize the project.

City planners still have not received revised plans, but they said last week they have been told by developers that the project proposed for 100 E. 11th St. will be an 11-story building with up to 230 market-rate apartments.

That's a far cry from the 33-story tower with 313 upscale condominium units proposed in 2005 by Minneapolis-based Alatus Management. Alatus partner Bob Lux declined to comment on the latest changes in the project.

The Penfield scrapped plans for condos in favor of apartments last July because of the weak condo market. Only about 80 of the units were presold.

At the time, the project's price tag was about $88 million. City planners said the development cost now is $45.8 million.

Part of the reason for the decrease is that a hotel included in the initial plans has been put on the back burner. The 170-room Hyatt Place Select Service hotel would have been the first full-service hotel to be built in downtown St. Paul in about 30 years.

The project's lower price tag will result in a reduction in the $9.6 million in tax- increment financing approved by the city in 2005, according to Natalie Fedie, a spokesman for the planning and economic development department. In March, the Penfield was awarded a $550,000 redevelopment grant from the Minnesota Department of Employment and Economic Development.

The Penfield got a boost last December, when Lund Food Holdings announced it would open a supermarket in the ground level. Lunds is still part of the plans.

Getting a downtown grocery store is a major coup, according to Cecile Bedor, director of the city's Planning and Economic Development Department. Even in its downsized state, she said city officials are happy with the Penfield, which they believe could help spur other downtown housing development when the economy recovers.

Opus drops Hopkins plans

Opus Northwest said last week it will not develop a 9-acre parcel in Hopkins near Excelsior Crossings, the corporate campus it is developing for Cargill Inc.

Opus recently let a contract with an option to buy the site expire, according to John Meyers, vice president for retail development. Meyers said Opus never had any formal plans but had considered a hotel and some retail for the site.

"It's difficult to find tenants in the current market," said Dick Friedrichs, a broker at Welsh Companies who is now marketing the parcel near the intersection of Hwy. 169 and Excelsior Boulevard. Meyers said Opus had no interest in developing it as a speculative project.

Opus' decision not to develop the Hopkins site marks the second time in less than a year that it has dropped plans for a project in the Twin Cities.

In November, it canceled a $10 million deal with Ramsey County for a 6-acre site on St. Paul's riverfront where the developer had hoped to build a $200 million office, hotel and housing project. Opus was unable to find an anchor for the office portion of the project.

Susan Feyder • 612-673-1723

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