Savage’s efforts to rejuvenate its downtown took a detour during last summer’s construction of Hwy. 13, but they could be getting back on track.

The city has stepped up efforts to market vacant properties, including its historic depot, where a restaurant and coffee shop closed last summer, largely because of problems related to the highway project. City officials have set their sights on having a full-service restaurant in the building.

“That’s a definite priority,” said Dean Trongard, a Maple Plain commercial real estate broker hired by the city to lease the space. “There’s a feeling that a full-service restaurant could do well there and would draw more traffic to downtown and generate more activity for other businesses.”

The City Council recently approved allocating $35,000 from its community investment fund for improvements, such as an exhaust hood and fan needed for an establishment that would do extensive cooking.

The funds, part of a $150,000 gift received last year from the Shakopee Mdewakanton Sioux Community, would be spent only if there’s an agreement from a restaurant tenant, said City Administrator Barry Stock.

“It’s our building, and we should make the improvements that will enhance our ability to market it over the long term,” Stock said.

Trongard said he has heard from experienced restaurant operators interested in the depot and most recently has spoken with three potential tenants. Stock said he is optimistic and believes a deal for a new restaurant could come in about a month.

Trongard said he also has talked with potential tenants for space in the Hamilton Building formerly occupied by Savage Art Studios & Gallery, which closed at the end of last year. He said the 3,000 square feet could be used by up to three businesses, most likely retail or professional service firms.

Trongard said that in general, downtown Savage also could use more businesses that cater to older residents, like a health or nutrition-related shop or a drugstore. “Nothing as large as CVS, but a small pharmacy,” he said.

Stock said the timing could be right to attract new businesses — now that work on the segment of Hwy. 13 that fronts downtown is completed.

He believes people have adjusted to new access points from the highway into the central business district.

“When you drive by on a weekday at lunchtime, it certainly looks like a lot of the downtown business has come back,” Stock said. The city’s downtown liquor store, Dan Patch Liquor, has seen its business recover in recent months after a dropoff during the highway project, he said.

Other downtown merchants say their businesses also have rebounded.

“It seems like people have figured out the new ways into downtown,” said Dan Neisen, owner of Neisen’s Sports Bar & Grill. Business at the bar fell about 20 percent during the highway construction but has bounced back, he said.

Neisen said he would welcome the addition of a new restaurant in the depot building and believes it would contribute to the overall vitality of downtown. Another empty spot he’d like to see filled is the building vacated by Associated Bank when it moved to another location in the city. Representatives of Colliers International, which is listing the property for $700,000, did not respond to requests for an interview.

In addition to filling existing space, Stock said the city is looking for developers for the site of its old fire station, which it demolished after building the new station. “We aren’t actively marketing it now, but expect to later this year,” he said.

Stock said the city continues to acquire properties with a goal of redeveloping them, as it did with the Hamilton and depot buildings.

This week the council discussed the possible acquisition of a vacant warehouse near 123rd Street and Palmer Avenue.

“It could be a strategic parcel in our overall downtown redevelopment plan,” Stock said. The city would demolish the building with a goal of having another type of property, like a retail building, put on the site, he said.

Acquiring the warehouse also would offer an opportunity for the city to partner on a larger redevelopment on that block that would include the adjacent Motor Mart, Stock said. The current owner, Corey Townsend, could not be reached for comment, but Stock said Townsend has expressed an interest in selling the service station.

Last year Townsend claimed the station had been damaged as a result of road changes from the highway project and collected a $600,000 settlement from the city. Stock said a condition of that settlement was that Townsend use funds to improve his other downtown property, a service station near Lynn Avenue.

Stock said he has seen a preliminary plan that would add a convenience store to the station. But he said no formal plan has been submitted to the city.