ST. CLOUD – Three Minneapolis companies are vying to redevelop St. Cloud City Hall but council members made clear Monday they favor the commercial option over two residential concepts that would require tax credits for low-income housing.

In February, the city issued a request for qualifications for companies interested in developing the site, which will be vacated by the city when it moves its city offices to the former Technical High School, likely late this year or early next year.

While the request didn't require companies to submit specific proposals, it asked for general design plans and whether the company would require other funding mechanisms, according to Matt Glaesman, community development director.

Frauenshuh Commercial Real Estate is proposing a two-story commercial building on the site, which is at the corner of Minnesota Highway 23 and Fifth Avenue South.

The plan would demolish City Hall, which was built in the 1920s as a school and renovated for city use in the 1980s.

The other two concepts, submitted by Saturday Properties and Schafer Richardson, show plans for four-story residential buildings with the potential for retail on the first level.

Both residential concepts would require highly competitive federal tax credits for low-income housing. Glaesman said even if the developers were awarded funding, it would likely not be until 2022 or 2023.

All three developers are asking for tax-increment financing but because the Frauenshuh plan doesn't rely on federal funding, the project has greater certainty, Glaesman said.

"Acquisition here could start as soon as we are able to leave the site," he said. "One of the parties that they're suggesting would come here is anxiously waiting for us to depart so that could relocate to the new building."

Council Member Steve Laraway said he thinks the city needs more housing but prefers the commercial plan for the City Hall site because of the more timely acquisition and construction.

"We need more revenue-generating businesses and projects in St. Cloud," Laraway said.

St. Cloud-based Inventure Properties was listed on Frauenshuh's application as a minority partner, Glaesman said. Inventure owns the property south of the City Hall site where a former Methodist church sits vacant.

Council President Jeff Goerger said he thinks the approval of the commercial redevelopment at City Hall could spur redevelopment of the southern site, too.

"I know it's not a given. I understand that but I think it does push that project a little closer to reality," Goerger said.

The council did not take formal action on the redevelopment proposals but plans to vote to issue a letter of intent with its preferred developer at the April 26 meeting.

The redevelopment company would then work with neighbors and other stakeholders to formalize design plans before bringing the development agreement back to the council later this year, Glaesman said.

Jenny Berg • 612-673-7299

Twitter: @bergjenny