Burnsville is ready to fill in the last gap in the city's heralded Heart of the City development, but it won't be with the full-service hotel that officials long have hoped for.
City Council members are prepared to vote Monday to sell five acres in the city's downtown to Anderson Builders of St. Louis Park, whose bid to build the Travelers Park Corporate Center -- an office complex with a hotel and parking -- they approved two months ago.
Since then, though, Anderson has done its homework and concluded that financing was too iffy right now to proceed with its plans for a hotel, company Vice President Dave Anderson said Thursday.
One hotel group did make a proposal, he said, but it sought free land and tax-increment financing (TIF) and declined to share in the cost of the parking decks.
"The market for a hotel in this location apparently has not matured to the point where it's ready for it. That's not us talking, that's the marketplace," Anderson said.
The City Council last week decided to go ahead with Anderson's bid anyway, reasoning that it was better to proceed with a project that promises 400 professional office jobs and also will provide parking for the performing arts center being built next door.
The company proposes to build two low-rise office buildings along with parking decks and a two-story restaurant that can double as an event center. Anderson said his company is talking to prospective tenants for the office space and a local caterer to run the restaurant.
The project, which would amount to more than $20 million, essentially would be built in two phases, Anderson said. If designs are approved, ground could be broken in May.
City Council Member Dan Gustafson said an office building would pay more property taxes and offer more living-wage jobs than a hotel, while also supplying the economic momentum needed to create the right conditions at some point for a hotel.
"Would I like to see a hotel in the Heart of the City? Yes. Will there be one? Yes," he said.
Not everyone is convinced, however, that Anderson did its best to include a hotel in the mix.
Council Member Charlie Crichton voted against the contract with Anderson because, he said, the company "got us all excited about a hotel and then did nothing about it." He said he wants to reopen the development process to other applicants.
Burnsville has "10 motels and the Holiday Inn," Crichton said. "If there's any reason for the Heart of the City, if it's going to be a pedestrian-friendly area, then it ought to have a hotel."
The council on Monday is expected to approve the sale of the land to Anderson for about $1.4 million. The council has already agreed to $2 million in TIF financing for the first-phase of parking construction, $1.5 million for the second parking phase and up to $850,000 in tax rebates for the proposed restaurant.
Burnsville Mayor Elizabeth Kautz said she was disappointed that a hotel won't be part of the Travelers Park center but predicted one eventually will be built either in Heart of the City or near Interstate 35W.
"I know that people continue to look at Burnsville and they see what we're doing, and they're interested in investing in Burnsville," she said.
Kevin Duchschere • 612-673-4455