Apple Valley still waiting for 'village' project to be finished

With $2.3 million in public grant money on the line, a key developer in Apple Valley's partly built, much-touted walkable downtown is once again asking city leaders to give the OK for changes to plans for a mix of new housing and retail space.

Pedersen Ventures is expected to ask the City Council tonight for the go-ahead to downsize plans for the Village at Founders Circle, a previously approved project at Galaxie Avenue and 153rd Street that hit rough water when the condominium market tanked.

The project drew ire from city leaders two years ago when Pedersen asked for -- and got -- permission to lease many of its planned condos instead of selling them.

Now the developer wants to reduce the square footage of retail space and cut the number of housing units from 197 to 129, said Bruce Nordquist, the city's community development director.

City leaders have expressed frustration with lack of progress on the project, which was planned to wrap up this spring. More delays would be "my worst nightmare in the city of Apple Valley right now," said Council Member John Bergman, adding that he sometimes wonders whether the city should have chosen a "big-name" company over local developers to make its downtown vision a reality.

In Apple Valley, where commerce has long centered around strip malls and stores along busy Cedar Avenue, city leaders have worked for years to create a pedestrian-friendly, urban-feeling downtown a few blocks away with condos and townhouses, stores and green space.

Enjoy! Restaurant, the GrandStay Residential Suites hotel and about 100 townhouses have all been finished, but -- like many suburbs struggling to complete similar projects in the tough housing market -- the city has seen setbacks. The city is considering revised plans this spring for a Hartford Group mixed-use project near Pedersen's that include renting out some housing that the city had expected to be owner-occupied.

At the Village at Founders Circle, plans also include an underground parking garage that the Metropolitan Council agreed to help build with public money awarded to Apple Valley through the Livable Communities Grant program in 2005. The city had two years to spend the $2.3 million grant, but got a one-year extension when plans didn't get off the ground in time. Now that deadline is approaching, and city leaders are crossing their fingers that they'll be able to keep the money and spend it in the next year.

"You can't tie the money up forever. It has to go back into the pool for other projects," said Ruth Grendahl, a City Council member who also chairs the Met Council Livable Communities Advisory Committee. (Grendahl said she recused herself from Met Council discussions about the Apple Valley grant.)

Sights now set on 2010

The developer now hopes to begin construction this fall and wrap up by early 2010, said Randall Pedersen, the company's chief manager.

"We are not like the other urban designs that are having problems," he said. "We don't have a weak development team. We don't have financing issues other than normal. We've very capable of ... moving forward."