A trial court judge has thrown out a lawsuit brought by two developers who argued that Minneapolis was improperly keeping them from building apartments near the east end of the Stone Arch Bridge.

Hennepin County District Judge Regina Chu dismissed the lawsuit by Steve Minn and John Wall last week after concluding that they had not shown the city had denied all economically viable uses for their property.

The developers' attorney, Brian Flakne, said her ruling would hamper development in Minneapolis. Assistant city attorney Jim Moore, who argued the city's case, said the city was pleased by the ruling.

Minn and Wall have made two development proposals for the triangular parcel they own between the bridge and a 221-unit apartment block that Minn built. They first sought to rezone the property to allow 98 units, which the city rejected, and then pared the project to 79 units.

After that too was rejected, area Council Member Diane Hofstede proposed allowing 56 units, which was permissible under the zoning, but the council voted that down. The developers sued, arguing that the city was depriving them of all economically viable uses of their land. But Chu found that because Minn and Wall had never applied for 56 units, they hadn't exhausted their opportunities to make money, nor had they shown that such a proposal wasn't viable.

Although the development company wasn't able to realize the profit it sought, the government wasn't taking their land without compensation simply because they couldn't maximize their profit, Chu found.

Flakne said the developers are watching another unfolding Minneapolis development challenge for guidance on whether to appeal.

That's the lawsuit brought by developer Brad Hoyt over the city's blocking of his proposals for a Loring Hill residential project. The Minnesota Supreme Court declined last month to review an appeals court decision favoring the city.

"If this ruling is allowed to stand, it will certainly send a chill through the development community already burdened by too much red tape and delay," Flakne said. "Development will become even more risky and less attractive in the city of Minneapolis."

Steve Brandt • 612-673-4438