Residential-retail plan wins out for Hudson site in Hastings

Three years after acquiring the historic building, the city of Hastings has chosen a developer for a former riverfront factory which will be remade with space for a restaurant, apartments, retail businesses, arts and potentially a hotel.

In mid-December, the Hastings Economic Development and Redevelopment Authority (HEDRA) voted to award a predevelopment agreement to City Properties Group. The Louisville, Ky.-based company has experience developing historical and riverfront properties, which city officials said was a key factor in their decision to award the contract.

The agreement, which HEDRA plans to approve in January, gives the developer exclusive rights to the H.D. Hudson property for a year in exchange for paying the hundreds of thousands of dollars it costs to prepare the property for development. At the same time, the city will plan incentives and discuss possible tax increment financing for the development. HEDRA also will discuss whether targets for attracting businesses should be set in a final development agreement, said community development director John Hinzman.

City Properties Group (CPG), chosen over two other developers, plans to include a restaurant and banquet facility, retail space, up to 4,000 square feet for the arts and residential space that may also include a hotel. Plans may include a public rooftop space and a waterfront park that borders a bike path along the river.

Another advantage of CPG's bid, said HEDRA board member Danna Elling Schultz, was its partnership with Pat Regan, a local developer and owner of Minnesota Coaches.

"He was a partner that we knew, and we knew could be successful," she said of Regan, who was a developer on Hastings' Schoolhouse Square retail center.

The building, once a factory for sprayer company H.D. Hudson, is on the west side of Hastings' downtown and dates to the early 1900s. Because of restrictions put in place after its construction, the factory also is closer to the waterfront than any new downtown building can be built.

"It has a tremendous visibility within our downtown area," he said, and could also spark interest in a riverfront property on the east edge of downtown. The city holds several acres of land there, left from a mixed condo-and-retail development that failed during the economic downturn. That land, on which the Hastings Rotary Club hopes to build a pavilion, could create a link across the riverfront in what city boosters call a "Riverfront Renaissance."

The prospects seemed less upbeat after the city purchased the building in 2010, said Elling Schultz, as the economy cratered and the city had to prove the former manufacturing site was chemically safe.

Today hopes are much higher, even for those who lost the bid to develop the site. The Hastings-Prescott Area Arts Council (HPAAC) worked with a national nonprofit to propose live-work spaces for artists in the building. HPAAC President Dick Graham said in the past several years, the Hastings art scene has expanded with a successful community theater, an orchestra, a strings group, the Orange Dragon art gallery and a new literary program.

The nonprofit developer, Artspace, will move ahead with a market survey of artists in Hastings and the surrounding area. The survey will gauge interest in a potential project for artists' living-and-working quarters. Results are expected by next fall.

In the past decade, Artspace, which develops affordable housing for artists nationwide, has also rehabilitated a middle school in Brainerd and a hotel in Fergus Falls for artist residences, studios and galleries.