In a vote that highlights the city’s struggle between growth and neighborhood preservation, a key Minneapolis committee on Thursday rejected a proposal to build a six-story apartment and retail building in the Dinkytown neighborhood next to the University of Minnesota.

The project has spurred an aggressive campaign called “Save Dinkytown” to resist what some neighbors view as a threat to the small-business fabric of the neighborhood. Activists pushed their message at political conventions across the city this spring and packed the City Council’s zoning and planning committee on Thursday. The full City Council will vote on it next week.

Council members expressed concerns about the potential high price of retail space in the new development and long-term implications that denser zoning would have in the area.

“If this gets rezoned, Al’s could be next,” said Council Member Lisa Goodman, referring to the revered hole-in-the-wall breakfast establishment Al’s Breakfast, which is separated from the project by one property.

The committee rejected rezoning for the Opus Development Company’s proposal 3-2, even though city staff had recommended it by pointing out that the 140-apartment building aligns with city policies to build dense projects in busy urban centers. It would also develop a plot of land, along SE. 5th Street between 13th and 14th Avenues, that is now 70 percent surface parking lots.

The vote put several property owners who were planning to sell to Opus in a bind. The Book House and the Podium, a music shop, have already moved out of Laurel Bauer’s properties on 14th Avenue SE.

Bauer was scheduled to close her 81-year-old family business, House of Hanson, next Wednesday. The owners of Duffy’s Pizza said they were planning to close Friday.

“It’s very frustrating. … We were all led to believe that the city was behind us and behind this project,” Bauer said, alluding to staff recommendations and unanimous support of the city planning commission, an influential citizen advisory board.

The decision and the preceding campaign to stop the project illustrate the fine line that city leaders must walk as they pursue more density outside of downtown, a key facet of City Hall’s quest to grow Minneapolis’ population.

It is also reminiscent of an effort last year to stop a mixed-use development in Linden Hills, where neighbors staged a similar campaign against an apartment-retail project.

Goodman, Cam Gordon and Meg Tuthill voted against the proposal. Gary Schiff, the chairman of the committee, and Kevin Reich voted for it.

Council Member Diane Hofstede, who represents the Dinkytown area, does not sit on the committee but spoke against the rezoning. She noted that the community should first complete a small-area plan guiding development for the neighborhood.

The Marcy-Holmes Neighborhood Association submitted a letter of support for the Dinkytown project.

Gordon said that while he was “impressed” with the development, questions remain about future implications for the neighborhood.

“I think people are looking at that four-block area [comprising Dinkytown] and they’re saying, ‘Well, if it’s all going to get upzoned like this, and it’s all going to get redeveloped like that, we’re going to lose everything,’ ” Gordon said.

Schiff said he agreed with staff that the city wants high-density housing in “activity centers,” defined as areas with bustling street life that support a range of commercial, office and residential uses. “That is what this proposal is,” he said.

Too much, too soon

Resistance to the project was amplified by the sheer number of housing projects that have sprung up around Dinkytown in recent years, spurred by student housing demand.

Just across the street from the Opus proposal, more than 300 apartments are being built on the site that was once home to Marshall High School.

“Uncontrolled growth in the human body is called cancer,” Gordon Kepner, a longtime resident of the area, told the committee. “I think the political body needs to think about uncontrolled growth in a very serious way. Because once it starts, there’s no drug to stop it.”

Developer ‘disappointed’

Matt Rauenhorst, Opus senior director, said company officials are “very disappointed” in the committee decision but that they “remain hopeful” the full council will move the project forward.

“We designed the project to complement the unique character of Dinkytown,” he said in a statement, “and we believe that it would put to better use the property, currently occupied primarily by surface parking lots.”


Twitter: @StribRoper