Gone is the surface parking lot, replaced by several full-story arched windows lining the street corner that will become the fresh face of the familiar St. Paul landmark, Cossetta Italian Market and Pizzeria.

Owner Dave Cossetta's $10 million makeover of the 100-year-old business is chugging hard toward completion as evidenced by the view at the corner of West Seventh and Chestnut Streets.

Long a pre-show or pre-game destination for visitors to the Xcel Energy Center, the business will explode in size, adding a pastry shop and table-service restaurant while expanding the grocery market and the cafeteria-style eatery.

Like many massive projects, this one has not progressed without tension at City Hall. But with a target opening date of late next month for the eatery, Cossetta appears to have weathered the trials.

Last week, Mayor Chris Coleman's office announced an agreement on what had been the latest issue - Cossetta's request for an exemption from city storm water management regulations. Also last week, data provided by general contractor McGough indicated the project has satisfied city standards for minority, women and small business participation.

Cossetta, however, wouldn't comment on the storm water issue except to say his project "would have been a lot cheaper if I hadn't had to do sustainability." He initially balked at talking at all about the project. "I'm taking a huge risk trying to do something good here," Cossetta said.

Cossetta had earlier convinced City Hall to exempt him from the city's living-wage ordinance in a vote that left unions unhappy with all City Council members except Russ Stark, the lone vote against the waiver. The council also gave Cossetta a $2 million subsidy for his project.

But recently he surprised City Hall with a request to deviate from the city storm water management standards adopted in 1981 -- a waiver that environmental advocates say would have been the first of its kind in St. Paul if granted.

Initially, Cossetta planned to build an underground holding tank to control water flow in heavy downpours, but then wanted to switch to catch basins. He and city engineers reached a compromise to put the tank under a surface parking area behind the building rather than under the building.

The storm water rate is the volume at which water flows off of hard surfaces into the sewer system. The regulations are designed to protect residents, roads and buildings from flooding as well as to preserve the Mississippi River.

An area where the project appears to be on track is in meeting the goals for inclusion of minorities, women and small businesses in subcontracts with general contractor McGough.

The overall goal is 25 percent for the three categories, but McGough reported awarding 33 percent of eligible contracts across the categories. In two subcategories, however, the general contractor came up short.

The goal for smaller businesses is 10 percent; McGough reached 22 percent. The goal for women-owned businesses is 10 percent; McGough reached 9 percent. The goal for minority-owned businesses is 5 percent; McGough hit 1.6 percent.

But interim city Human Rights Director Readus Fletcher said McGough is in compliance because his agency's review indicated the company had made "good faith efforts" to hire contractors from the three groups.

Fletcher said the McGough numbers weren't what the city expected but that all projects are different and compliance can depend on what sorts of skills are needed on a project. To reach the "good faith" threshold, the contractor must follow city directives for outreach to targeted groups and must provide documentation of the efforts.

"We went ahead and verified they did those kinds of activities," Fletcher said.

"There's good news," Cossetta said when told of the thumbs up McGough got from the city.

Tom Hannasch, one of the Cossetta project managers at McGough, said the construction downturn of the past couple of years has made outreach and hiring of underrepresented groups more difficult because smaller, younger companies left the business.

Bernie Hesse, director at the United Food and Commercial Workers 789, wasn't thrilled. "I don't think it was as aggressive as it could have been," Hesse said, averring that his role is to push the city. "They need more people like us to say, 'Hey, are we doing the best we can do?' "

Cossetta is focused on the late August shift for his eatery to the new space. The remainder of the project is to be open next year.

The owner recently traveled to Italy to sign off on the new pastry store that will be shipped this fall. "You won't see anything like that in the Midwest, even Chicago," Cossetta said. "It's pretty amazing."

Rochelle Olson • 651-925-5035 Twitter: @rochelleolson