High-end apartments could be in the works for Eagan farmland

A piece of farmland in an otherwise developed area of Eagan could be on its way to a new future as a complex with data centers, medical offices and upscale apartments.

The City Council agreed last week to seek approval by the Metropolitan Council for a land use change as the first step toward considering a proposed mixed-use project on the 24-acre site. The preliminary plans by Gratus Development Partners call for two data centers with a total of 112,000 square feet of space, a two-story medical office building and a five-story building with 250 apartments.

The land north of Yankee Doodle Road and west of Central Parkway has been zoned for agriculture for more than 50 years and is owned by heirs of the original farm family, according to Jon Hohenstein, director of community development. "Its agricultural use represents what most Eagan property was until the '80s and '90s," he said.

The owners have considered purchase offers over the years that would have to led a development, but none ever materialized. Meanwhile, other housing, retail and office properties were built around the farm site.

At one time the city envisioned the parcel as part of a larger area to fill out as a corporate campus zone for three companies — Lockheed Martin, Unisys and Delta Air Lines. Over the years, all three have either departed or greatly reduced their presence in the city. In 2001 Eagan denied a proposal and land use change on the site for a Target-anchored shopping center. In 2004 Paster Enterprises, a St. Paul developer and manager of neighborhood shopping malls, pitched a retail project but later withdrew its plan.

The land use designation on the parcel has been major office since 1995. If it gets the go-ahead from the Met Council, the city would amend its designation to allow mixed uses, paving the way for the apartment building.

Representatives of Gratus did not respond to requests for interviews. But the developer's interest in building the apartments is the latest sign the boom in upscale rental housing is spreading to the suburbs.

In Hastings, city officials are considering proposals to redevelop the historic H.D. Hudson Sprayers building that would include building apartments.

In Eagan, Stonebridge Companies has proposed a 180-unit apartment building in the Cedar Grove redevelopment area. The Economic Development Commission has approved a purchase agreement for a 4.8-acre parcel, and Hohenstein said the developer hopes to have plans approved to begin construction this fall. The apartment building would be adjacent to an outlet mall now being built by Baltimore-based Paragon Outlet Partners.

The Gratus and Stonebridge projects would be the first market-rate apartments to be built in Eagan since Promenade Oaks at Lexington Avenue and Northwood Parkway in the mid-1990s. In documents filed with the city, Gratus says the apartment building would be a "high-amenity luxury" property.

The Eagan City Council unanimously approved seeking Met Council approval of the change allowing mixed uses on Gratus' development site. The only word of caution came from Council Member Paul Bakken, who said the long-term vision for the property has been major office, like a corporate headquarters. He didn't object to the Gratus proposal but asked if the change land use could open the door for a different proposal that would have a lower taxable value than a purely office-oriented development.

"Make it look nice," Bakken said to Mark McLane, an executive of Gratus who attended but didn't speak at the meeting.

In its filings with the city, Gratus says it would build the apartments after the medical office and data centers. It doesn't say whether it has tenants lined up for either property.

Data centers can help communities draw other employers who use the facilities for data storage. Some very large companies have their own data centers, but other businesses use facilities like those developed by companies that specialize in building them.

A recent research report by the Twin Cities office of Colliers International points out several reasons the metro area could be attractive to data center developers. The cold climate is a major advantage since it lowers the cost of keeping the facilities cool. The area has a stable electronic grid and lower risk of natural disasters, factors that came into sharp focus last year when data centers on the East Coast found themselves in the path of Hurricane Sandy.

The Colliers report also points to the Twin Cities' large, tech-oriented workforce, a ready labor supply for a data center.

In April the Shakopee City Council voted to offer Dallas-based Compass Datacenters an incentive package to build a facility. Earlier this year, Chaska approved a tax abatement for a data center to be operated by Dallas-based Stream Data Centers.