Developer walks away from deal for Burnsville office complex

The Burnsville City Council on Friday agreed to let a developer cancel a deal to build a $20 million office complex and parking deck on nearly 5 acres in the Heart of the City redevelopment.

It also advised staff to investigate how the city itself could build the parking deck with 200 to 250 spaces to be used by downtown businesses, which are begging for more parking space, and the Performing Arts Center, which is under construction.

The parcel in question is part of a much-heralded $150 million, 54-acre redevelopment to create a downtown for Burnsville. Nine parcels are already developed or being planned to provide housing, restaurants, offices and retail space.

Anderson Builders of St. Louis Park had agreed to buy 4.75 acres near Pillsbury Avenue and 126th Street W. for $1.4 million. But Anderson has since raised 27 title-related demands, including requests for easements and removal of stop signs.

City staff assured Anderson that all problems would be cured. Some council members said the objections did not seem to warrant cancellation of the deal.

Echoing what many believe is the real reason, Mayor Elizabeth Kautz said: "It's the economy."

In an interview, Greg Anderson, president of Anderson Builders of St. Louis Park, would say only that his firm was withdrawing because of title issues and time constraints.

"It pains me to do so," said Council Member Liz Workman.

Anderson's decision leaves the city looking for another developer and also poses the question of how the city will provide parking for a $20 million arts and convention center under construction.

The council voted 3-2 to look into a plan under which the city, rather than a developer, would build a parking deck with a second level for $3.5 million to $4.5 million.

City spokesman Jim Skelly said Friday that homeowners will not be paying for the parking ramp with property taxes if the city does decide to build it. He said it would be paid for with nonproperty tax revenues such as proceeds from a Pooled Tax Increment Financing revenue stream and from the Heart of the City TIF District.

Council Members Charlie Crichton and Dan Kealey voted against that option, saying they favored creating temporary surface parking, leaving open the opportunity for a developer to build the parking structure.