Eagan office project still struggles to get off the ground

The Eagan Development Authority has given a stalled office project that's waiting for financial backing from the city more time to get back on track.

Plans by Bloomington-based McGough Companies for the Blue Gentian Corporate Center go back several years. The 260,000-square-foot office building would be built on the southeast side of the Interstate 494-35E interchange.

The city originally approved tax breaks in the form of tax-increment financing (TIF) for the project in 2006, and it extended the TIF development agreement in 2009 and again in 2011, giving the office market to recover from the recession.

The current TIF agreement called for construction to begin by this May, but McGough has said it still has not been able to land an anchor tenant despite actively marketing the project. Securing a tenant would be necessary in order for McGough to obtain the private financing it needs to proceed.

In a letter to the city, the developer cited the generally weak market for office space and the large amount of vacant and underused space in the Eagan area. That includes the two-building complex that previously served as the headquarters of Delta Air Lines and a 10-story office tower formerly occupied by Blue Cross and Blue Shield of Minnesota.

The latest extension gives McGough another two years with a construction deadline May of 2015.

Home building activity continues to be robust throughout Dakota County. Lakeville has seen the most building permits so far this year, with 51 for 53 units through the end of February, according to the Keystone Report for Builders Association of the Twin Cities.

Eagan recorded 21 permits for 32 units, while Farmington and Rosemount each had 17 permits for 17 units through the end of February.

Apple Valley issued eight single-family permits, Burnsville had two, and Hastings and Inver Grove Heights each had five.

All communities in Dakota and Scott counties monitored by the builders group reported increased activity from the same period last year. Prior Lake has been the most active city in Scott County so far this year, with 21 single-family permits issued through the end of February.

Baskets on Occasion, a longtime presence in the Eagan retail market, recently moved to a different location in the community.

The store, which specializes in gift baskets for individuals and corporate clients, has moved to 1095 Diffley Road. This is the third location in Eagan for the 17-year-old business, according to owner Mary O' Rourke.