The Ramsey Town Center was supposed to feel like a traditional downtown, with parks and fountains interspersed among small shops, restaurants and hundreds of homes.

But the bank that holds the mortgage for 150 foreclosed acres in the Town Center is saying that the city of Ramsey needs to set aside its dreams for the project, according to court documents filed Friday in Anoka County District Court.

Last June the City of Ramsey filed a lawsuit against Minnwest Bank Central arguing that the city's original plan, or master development agreement, for the Town Center project should continue to be followed, even though the project's original developer, Bruce Nedegaard, went into bankruptcy and died in 2006.

For months, the lawsuit has lingered, but now Minnwest has filed a counterclaim that says the land should be "free and clear of the terms, covenants and restrictions" in the development agreement.

Ramsey City Administrator Kurt Ulrich said the City Council will discuss the counterclaim at its meeting tonight.

"We remain open to trying to get this development open in any way possible, including negotiation with the bank," Ulrich said Monday.

The original plan called for the developer to pay for about $30 million in improvements to parkland and infrastructure. Minnwest's counterclaim says that the original agreement is not tied to the land, so the bank or any future developer should not be obligated to abide by it.

In previous interviews, Russ Bushman, Minnwest's chief credit officer, has said that the plan is not economically feasible. Neither Minnwest's attorney nor Bushman returned calls for comment Monday.

The city is considering a study that would look at real estate options for the Ramsey Town Center, Ulrich said.

During a City Council work session on April 1, council members discussed changing the wording for the vision of the Town Center in the city's 2008 comprehensive plan.

Council Member Sarah Strommen said she still wants the project to include gathering spaces and be transit-oriented, but that the details could change.

"The vision is not necessarily the master plan," she said Monday. "The vision is having a Town Center where walkability is key and it's a gathering place."

Neighborhood Development Partners LLC had previously made an offer on the foreclosed land and discussed the project with the city.

Chris Enger, a co-principal of the company, said Monday that Neighborhood Development Partners has not made any offers to the bank in the last 60 days. He couldn't say whether the company would make any other offers.

Ulrich said the city has not had any discussions with Neighborhood Development Partners lately.

The sheriff's auction for the 150 foreclosed acres, scheduled for May 2, was postponed.

Lora Pabst • 612-673-4628