New apartment building overlooking St. Croix River tests limits of scenic protections

From his backyard on River Street in Osceola, Wis., Peter Paidar looks out over the St. Croix River, the same view he’s had for decades, framed by oaks and the curve of the bluff.

Soon, he says, that view will change.

Just beyond his fence, the cracked shell of Osceola’s long-abandoned hospital is slated to come down, clearing the way for a 99-unit apartment complex. Paidar worries the new building will jut above the trees and break the quiet skyline that drew him here in the first place.

The project — rising along the Lower St. Croix National Scenic Riverway, one of the first rivers protected under the 1968 Wild and Scenic Rivers Act — has become a test of how far small towns can stretch federal river protections in the name of local growth.

Supporters call the project a step toward revitalizing downtown and adding housing in a fast-growing area on the eastern edge of the Twin Cities. Critics say it chips away at the scenic protections that once defined the St. Croix’s identity.

“This building is going to loom over downtown like a huge office building — and once it’s there, it sets a precedent for others to do the same along the river,” Paidar said.

Village President Brad Lutz said the board’s decision to allow the apartment building came down to a simple equation: long-stalled redevelopment, rising housing demand and a developer meeting the letter of the law.

Forest Lake-based Gaughan Cos. plans a three-story building with apartments, commercial space and 177 parking stalls. Osceola’s code limits building heights in the river district to 35 feet, but a 2023 ordinance allows heights up to 45 feet through a conditional-use permit if projects are “visually inconspicuous” from mid-river.

“You can’t govern based on ‘I don’t like it,’” Lutz said. “As long as the developer is satisfying all of the laws and codes.”

The St. Croix was one of the first rivers protected under the 1968 Wild and Scenic Rivers Act, championed by Walter Mondale and Gaylord Nelson, the senators from Minnesota and Wisconsin at the time. Its protections, supporters say, were meant to prevent exactly the kind of development now climbing Osceola’s bluff.

Opponents of the apartment building quickly organized after the plan was approved, packing village meetings and filing suit to block construction. The St. Croix Scenic Coalition and several homeowners argued that the project violated both local ordinances and state rules protecting the Lower St. Croix Riverway.

In 2023, a Polk County judge sided with them, ruling that the village board lacked evidence the building would be “visually inconspicuous” from the river — temporarily halting the development.

To make his case, Paidar bought four balloons, tied them to 40 feet of fishing line and launched them from the curb near a church spire to match the building’s planned height. From the river, he said, the balloons hovered above the tree line — proof to him and other opponents that the project would be visible from the water.

“We went out on the river and, sure enough, the balloons were visible above the canopy,” Paidar said. “All we’re asking them to do is prove that they’re compliant.”

Gaughan Cos., the project’s developer, did not return requests for comment.

The coalition won the early round in Polk County court, which ruled the village lacked evidence that the structure would be inconspicuous. The decision was later overturned when appellate judges found the plaintiffs lacked standing — ending the case without resolving the central question of visibility.

Paidar said residents felt the village “bent over backward” to accommodate the developer. “All we wanted was proof that the project meets the standard,” he said.

Lutz said demolition is expected soon, with construction beginning in 2026 and occupancy by 2027.

Whether the finished apartment building peeks above the tree line or disappears behind it, the more telling outcome may be what happens next.

As towns reinterpret what “inconspicuous” means, advocates of protecting the riverway say the St. Croix’s future could hinge less on federal law and more on how local boards decide what’s worth preserving — and what’s worth building.

The Wisconsin Department of Natural Resources said the village — not the state — is responsible for enforcing scenic-river standards within its borders.

“The DNR does not have enforcement authority on this subject,” said Dave Rozeboom, a regional DNR official. The department “does not have any concerns” about the Osceola project’s compliance with federal requirements.