A settlement that's aimed at ending the pumping of groundwater into the Chain of Lakes from a luxury apartment building in Uptown won City Council approval Friday.

The consent agreement sets a March 31 deadline for Lake and Knox LLC to end discharge from 1800 W. Lake St., a 57-unit building. It is required to fill the lower of its two basement parking levels by then so that pumps can be shut off. The owners plan to offer valet parking for tenants until that lost parking can be replaced on an adjacent lot.

Area Council Member Lisa Goodman said the settlement's chief environmental contribution is ending the flow of an estimated 75 pounds annually of algae-feeding phosphorus borne by pumped groundwater into the lake. But she said it sends a signal to developers that ignoring city orders to halt such pumping won't be tolerated.

“I don’t think anyone else would be stupid enough to take this route,” Goodman said. The deal is expected to win Hennepin County District Court approval.

The city and Minnesota Department of Natural Resources already have issued permits that allow the pumping to continue legally during the basement work. Lake and Knox also is required to apply to the U.S. Department of Housing and Urban Development and its mortgage holder for permission to proceed.

If that approval doesn't come by Monday, when construction is scheduled to start, the owners get up to a two-week extension, but the March 31 deadline doesn't change.

If Lake and Knox misses that deadline, it faces a $5,000 daily penalty while it keeps pumping. But that penalty is cut to $1,000 daily if it's because HUD and its lender didn't act in time.

The agreement levies a total of $205,710 in penalties against Lake and Knox, with another estimated $78,000 to come. That represents city costs for extending piping onto Lake Calhoun to minimize unsafe ice in the lagoon between Calhoun and Lake of the Isles, the extra cost of cleaning a sewer grit-collecting chamber, and a fee for using city sewers. The Park Board separately is claiming about $32,000 for its costs.

Lake and Knox LLC consists of developers Nick Walton and Daniel Oberpriller, along with other unnamed investors. It still has financial claims pending against engineering firms that provided soil and engineering studies for the project.

The issue began when the city and state approved temporary permits for pumping away groundwater during construction, and grew into a public controversy when that continued after the project was finished to keep the lower garage from flooding. That led the city to take the rare step of filing its lawsuit in December, 2013..

(Above: A pipe, later extended farther, carried pumped groundwater from the apartment building onto the lagoon.)