Development is hopping in New Hope, with three housing proposals and a Hy-Vee supermarket that would be the first grocery in the city in years.

Besides the estimated $15 million undertaking that Hy-Vee proposed near City Hall, city officials said three housing projects are moving forward:

• Compass Pointe, a 68- unit, upscale apartment building with state-subsidized affordable rents. The $13 million project has City Council approval and work is to start in June at W. Broadway and 62nd Avenue, the city’s northern boundary with Brooklyn Park.

• Centra Homes will build 61 homes on the site of the former Winnetka Learning Center on 55th Avenue, now being demolished by the city. Centra plans 34 single-family homes and 27 detached townhouses on a 17-acre site. The city hopes to close on the $1 million land sale to Centra by July 1.

• Gates of New Hope, a 32-unit apartment building on Medicine Lake Road, about a block east of Hwy. 169. It could reach the City Council for review by late April.

“We have all kinds of development going on,” said Mayor Kathi Hemken. “We are just rolling along.”

City Manager Kirk McDonald said the city of 22,500 began buying and clearing dilapidated townhouses on the Compass Pointe site in the mid-1990s. He expects Compass to be an attractive landmark for people entering the city on W. Broadway from Brooklyn Park. The project was delayed last year when developer Ron Clark failed to win affordable-housing tax credits from the Minnesota Housing Finance Agency. Clark said he won the credits this year, which allow him to offer state-set affordable rents.

Single-family home project

It’s been more than 20 years since a sizable single-family home project, like Centra’s, was built in New Hope, a six-square-mile city that is almost completely developed, said Curtis Jacobsen, community development director. He said that assuming the land sale is finalized by July, street and sewer work should start this summer and a model home or two could go up this fall.

“It will be exciting for New Hope to have an opportunity for some new housing,” McDonald said. He said most city housing is smaller starter homes. Centra will offer large, customized homes on relatively small lots, feeding a demand for less yard work but lots of living space, Hemken said.

Centra home prices will start at about $275,000, and townhouses, about $225,000, McDonald said.

Compass draws flak

The only project to draw much objection so far has been Compass Pointe.

“We think it is way too big a scale for our neighborhood,” said Mike Bailey, 55, sitting outside his modest home behind the Compass site. Bailey, a carpenter, said he fears that if the apartment building doesn’t fill up, it could wind up with cheap rents under Section 8 subsidized housing.

“I’m all for affordable housing” for lower-wage people, he said. “I just don’t want it to turn into a disaster with lots of problems and police coming all the time.”

Developer Clark said he responded to local concerns by redesigning the fourth floor with gable windows to soften the look for neighbors. He also increased the privacy fence height from six to eight feet along the neighbors’ property line, and will plant evergreen and deciduous trees and shrubs around the fence.

Clark noted that Compass will have many amenities, including a fitness room, washers and dryers in each unit, and 68 underground parking spots. He said Compass will have insulated glass windows, extra sound insulation in the walls and energy efficient heating and cooling equipment.

Bailey said the design changes help somewhat. He said if Clark delivers all he promised the city “it should be no problem.” However, many of his neighbors along 61st Avenue are mistrustful and “We are not sure it [Compass] is what we want in our gateway to New Hope.”

The city will use tax increment financing to recover some of its costs for buying, clearing, and removing contamination from the sites for Compass, Centra and the Hy-Vee grocery, Jacobsen said. He estimated the Compass project financing will include about $700,000 in tax increment money that the city will recover over the years in higher taxes on the improved site. He said Gateways owns its site and hasn’t asked for city assistance.

Jacobsen said the city paid about $300,000 for four lots in the Compass site, $1,750,000 for the Learning Center property, and $4.5 million for the 13-acre former Kmart site, where Hy-Vee hopes to build. The three sites produce no taxes while owned by the city.

Jacobsen said residents have been “somewhat clamoring” for a grocery so they won’t have to drive to supermarkets in surrounding cities. The 90,000-square-foot Hy-Vee store is planned to include a pharmacy, bakery, full restaurant with a patio, a deli and a convenience store/gas station. The Iowa-based company expects to hire about 400 full- and part-time workers for the grocery.

Jacobsen said the city has signed an agreement to negotiate only with Hy-Vee until October.