Excelsior's much-awaited new hotel and grocery store are getting closer to reality.

The first hotel on Lake Minnetonka in decades is expected to get final approval by the end of the year — as soon as September. And last week, the city announced that Kowalski's will occupy a highly anticipated grocery store.

"It's a big win for the city of Excelsior," Mayor Mark Gaylord said last week. "We have two major projects that are poised to launch."

The projects bookend the one-square-mile city's downtown area and have been in the planning stages for years. The town of 2,400 hasn't had a grocery store since the mid-1980s, when Red Owl left. Now, Woodbury-based Kowalski's Markets — which started in 1983 in St. Paul with a single store, a former Red Owl — could open as soon as next March, with construction starting in late August or early September, City Manager Kristi Luger said.

"We are super excited because they run a really quality grocery store," Luger said of Kowalski's. "People have been clamoring for fresh food they can walk to."

The City Council plans to hold a special session in August to approve signage changes to the grocery store and design changes to an adjacent retail/office building. In May, the council approved a six-month extension for developer Oppidan Investment Co. to find a tenant after granting a one-year extension in spring 2013; Minnetonka-based Oppidan had long been in talks with Trader Joe's, but the company backed out.

"We've stuck to our commitment to the city [to put in a grocery store]," said Jay Moore of Oppidan. "We're excited for it."

Mike Oase, vice president of operations for Kowalski's, said the company had considered opening in the city several years ago and was still interested. The company will now purchase the building — its 10th store in the Twin Cities.

Iconic hotel coming soon

The long-awaited boutique hotel is also nearing construction, with a final vote expected by the end of the year.

For years, Charlie James has wanted to build a hotel on a lot he's owned since 1976 — the very first property he bought when he finished college and launched a real estate business. The lot, just yards from the lake shoreline and at the corner of Water and Lake streets, housed a car dealership, drugstore and Pizza Hut over the years. Now, it's a vacant, grassy plot that James has been planning for the hotel for the past five or six years.

"I'll be very gratified if we can bring this to fruition," said James, a Woodland resident.

He met his wife in Excelsior during high school in the 1960s and said he's passionate about creating a development that becomes a landmark not just for the small town, but across the lake community.

"It would be a beautiful use for the city and Lake Minnetonka," he said.

Over the years, the project has drawn some criticism, with some residents questioning whether it would succeed and the city's Heritage Preservation Commission voting to block the project for its size and scale. But the City Council overturned that decision last spring, saying the hotel will boost tourism and revenue for Excelsior.

'We want to do it right'

Since then, final plans have had to be reworked when bids came in over budget, James said. A spa and a rooftop pool have been added to boost its potential revenue and help the hotel become a destination.

"Could we build the hotel for less? Yes, most certainly, but then the whole concept changes," James told the City Council on June 16.

The city's final approval has also been delayed because of needed figures related to tax-increment financing that would go toward public improvements of the port and Commons, the city's park.

When asked by the council to provide a more concrete idea of when the project application will be complete, James said: "I wish I could, but there's a lot of moving parts in this. We want to do it right. … All I can say is we're getting closer."

He's working with Graves Hospitality, chosen for its expertise with both restaurants and hotels, to operate the building. If approved by the end of this year, James said construction could start next spring, with the hotel likely opening in 2016.

The hotel would be the first on Lake Minnetonka since 1964, reminiscent of the early 1880s, when dozens of hotels dotted the shoreline and drew tourists to the lake and legendary amusement parks.

"I think there's a need for something like this," James said. "The idea is to build something that's iconic and a destination."

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