Plan for eventual New Hope city center hits snags

New Hope City Council members are hesitating on a redevelopment project that would include a SuperTarget, but they're allowing up to a year to sort things out.

By LORA PABST, Star Tribune

Last update: July 2, 2008 - 12:51 AM

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The City Center project in New Hope was revived last fall by the magic word in suburban redevelopment: SuperTarget.

Now the project is slowing, but not stalling, because of the dreaded word: taxes.

After hearing about Ryan Companies' plan to redevelop the busy intersection of 42nd and Winnetka Avenues into a downtown district, the city established an interim agreement in January to work with the developer on the feasibility of the project. Last week, the city agreed to give Ryan Companies a one-year extension on the agreement, until August 2009.

The project is divided into three phases, starting with adding the SuperTarget and upgrading strip malls at the intersection. The developer is also hoping to bring a medical facility and offices in the future.

Ryan Companies told council members last fall that the project could hinge on securing a Robbinsdale school district building that sits on the southeast corner of the intersection where the SuperTarget would be located. But the developer's request for financial help from the city through a tax increment financing district (TIF) is raising concerns for council members.

"It's one of those things people want to see, but when you're on the council, part of your job is to look at all the ramifications," said Council Member Dan Stauner. "Not just dive in because it looks like the shiny, attractive bauble they're dangling in front of your face."

The developer and the city will meet again this month to discuss the costs and projected revenue for the project. Council members were particularly interested in how the movement of the school district site to another location in New Hope would affect the city's cash flow.

"There are developments [around the metro] that have a lot of city dollars in them and they're standing vacant," said Mayor Martin Opem. "This council is concerned about overextending the city."

Not only would the relocation site for the school district building have to be taken off the city's tax rolls, but taxes generated when the current school district site returns to the tax rolls would not go toward the city's general fund if the area was approved for a TIF district.

"If you're going to use TIF financing, you should be accomplishing some public purpose and to me, a Target in New Hope is not, in and of itself, a sufficient public purpose," Stauner said.

Interest still alive

Because the project is only at a preliminary stage, council members are not giving up hope. At last week's council meeting, a representative from Target Corp. was present.

"The city has heard for a long time that Target was interested in the site, but we've never seen a face that stood up and said they were definitely interested," said City Manager Kirk McDonald. "That was important for the council to hear."

Mark Schoening, vice president of development for Ryan Companies, said the focus of the project has been on the school district site because of the logistics of relocating the building, but the developers haven't forgotten about the idea of the City Center.

"The city has its eye on a fairly large area and the odds of developing that area increase if we can put in an attractive Phase I," said Schoening, of the phase that would include the SuperTarget.

John Elder, who was selected this spring to replace former Council Member Steve Sommer, said he was glad the developer had thought about revamping the strip malls at the intersection. He hopes that the redevelopment will help fill empty storefronts.

"As a police officer, I used to have to deal with [empty storefronts]. As a citizen, it's bothersome to see and as a council member, it's a waste of space," Elder said. "I can't just blindly say we'll do it at any cost, but I believe this council wants to move forward."

Lora Pabst • 612-673-4628

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