New development coming to Woodbury's east side

Woodbury's quickly growing east side, which attracted a SuperTarget store in 2011, is about to see yet more development — this time on one of its last remaining large, commercially zoned pieces of vacant land.

Pending city approvals, a 15-acre parcel immediately to the east of the SuperTarget along Woodbury Drive will be the site of the new Woodbury Plaza commercial center, which is to be initially anchored by a pair of multitenant retail buildings, a Wings Financial Credit Union and a HealthEast medical clinic.

Wayzata-based HJ Development is the lead developer on the project, with Frauenshuh Commercial Real Estate Group of Bloomington handling the credit union.

HJ's Chris Moe said the plans call for construction to begin quickly, adding more retail and medical clinic options to a part of the St. Paul suburb that is rapidly expanding.

"Woodbury is one of the top trade areas in the Twin Cities that is always looked at whenever a national tenant comes to town," he said. "A lot of our tenants are actually opening up their second and even third stores in Woodbury — they want to have a presence on the east side of the city."

Those include Noodles & Co. and Starbucks Coffee, which will be among the retailers in the pair of multitenant buildings. Other takers so far include Yogurt Lab, Which Wich sandwiches and Pacific Dental Services.

"Companies in the fast-casual ­restaurant segment are deciding to put stores in the east side of Woodbury as well as the west side because it's big enough and has enough retail space," Moe said. "We're taking advantage of that and hoping to capture some of that second-store traffic."

The SuperTarget itself is a demonstration of that, he noted — the retailer already had a store in the Woodbury Village mall farther west.

HJ has three remaining "pad sites" on the property, totaling 5 acres, which Moe said are generating significant interest from potential retailers. He said he expects the entire project to be built out by 2015.

The new project is another indicator of the continuing strength of the Woodbury market, said Dick Grones, a principal with Cambridge Commercial Realty.

"You have a new Cabela's [outdoor equipment store] about to open up, which will put a lot of jobs in play, Anytime Fitness is planning to build their corporate headquarters there and there are new plans for the [long-vacant former] State Farm campus," he said.

Housing permits are up as well. Woodbury ranked second among metro-area cities in residential permits issued in the first 11 months of 2013 with 331, second only to Lakeville's 345.

"All of this is indicative of great things to come. The engines have started again out there," Grones said.

For the city, Woodbury Plaza is the "last piece of the puzzle" in terms of previously unplatted commercial land along Woodbury Drive — the "main street" of the city's east side, Woodbury Planning and Economic Development Manager Janelle Schmitz said.

"All of the other properties along that corridor at least have a 'planned unit development' in place," she said. Assuming it is approved by the City Council, the Woodbury Plaza parcel would be the final one to join them.

The city, she said, is especially pleased about the 18,300-square-foot HealthEast medical office building proposed for the southern third of the site because it will act as a buffer between nearby residences and the more heavily trafficked retail uses elsewhere on the site.

"A lot of times with these projects, the retail comes first and the office portions come later, but in this case, the office piece is one of the first major users," Schmitz said.

Don Jacobson is a St. Paul-based writer and former editor of the Minnesota Real Estate Journal. He has ­covered Twin Cities commercial real estate for about 10 years.