Paragon Outlets will pay $14.7 million for 29 acres at the long-dormant Cedar Grove redevelopment site, with plans to open an upscale outlet mall in 2014.
Stick a "SOLD" sign on Cedar Grove.
Paragon Outlets is buying 29 acres at the Eagan redevelopment site near Hwy. 13 and Cedar Avenue for $14.73 million, with plans to open an outlet mall with 90 to 100 high-end stores in 2014.
The city's Economic Development Authority, made up of the City Council members, approved the sale last week as part of a $29 million package that includes city construction of a two-story parking garage next to the mall.
The sale is contingent on the outlet mall plan receiving city approval throughout the development process.
"We're excited about it, but we're also not going to start cutting any red ribbons just yet," Mayor Mike Maguire said. "It's one step in the process."
The purchase agreement calls for Paragon Outlets to pay $200,000 per acre for the land, cover the costs of relocating a gas pipeline and Cedar Grove Boulevard, and contribute $4.23 million toward construction of the parking garage to the south of the mall development.
The city will use tax increment financing generated by the development to pay the additional $14.77 million needed to construct the parking garage. The city will also apply for grants to help cover some of that cost.
The garage would initially be two levels but would be engineered to support a third level, if it's eventually needed.
City officials said building the garage allows for plenty of parking to support the mall while also preserving more space at Cedar Grove for additional development.
The mall and parking garage together will take up about 35 acres of the 65-acre redevelopment area that straddles Hwy. 13.
"It's like putting together the pieces of a puzzle," said Council Member Gary Hansen.
The Cedar Grove redevelopment has been more than a decade in the works, dragged through legal battles over eminent domain and stymied by the down economy.
The city's vision for the area, once the site of a strip mall, has evolved over the years but generally called for a mix of uses, including retail, office, hotel and residential areas connected by walkable, nicely manicured streets and public gathering spaces.
Paragon's purchase agreement also calls for the outlet company to buy 3.5 acres south of the mall development to be donated to the city as parkland.
The park, which will likely remain as open space with picnic areas, is meant to serve as a neighborhood destination for residents who live in nearby townhouses, said Jon Hohenstein, the city's community development director.
The city doesn't yet have firm proposals for remaining land in the area.
But Len Pratt, the developer the city contracted to help transform Cedar Grove, said the sale of land for the outlet mall could be a magnet for hospitality-oriented businesses, maybe a hotel or restaurants.
"This announcement makes a big difference," he said.
Paragon's preliminary plan approved by the city calls for a 420,000-square-foot, open-air mall with surface parking lots on two sides and the parking garage on the southern edge.
The company has said its outlets are more upscale than those in other places around the metro, such as the Albertville Premium Outlets or the Preferred Outlets at Medford.
The stores listed as partners on Paragon's website include luxury brands Barneys New York, Brooks Brothers, Dooney & Bourke and Neiman Marcus Last Call. The list also includes some stores already found in Minnesota outlet malls, including Gap, Nike and Coach.
If all goes according to Paragon's plans, construction could begin in spring 2013, with a goal of opening the Eagan outlet mall in 2014.
Katie Humphrey • 952-746-3286