Unfiled paperwork could sink L.A. Fitness plans in Hopkins

All that stood between the 6.5-acre Hopkins property and the L.A. Fitness planned for the site was asbestos -- lots of it. The hazardous material impregnated the 55,000-square-foot building that was to be razed. Even the ceiling's caulking carried it.

Now the asbestos is gone, but the cost of removing it might still put the project in jeopardy.

Last week, a Metropolitan Council committee voted to deny $404,500 in grant funds for the work, money the developer said he had "counted on." The full Met Council will likely consider the grant at its Feb. 13 meeting.

The project ranked high in the competition for funding under the council's Tax Base Revitalization Account, which is meant to "clean up polluted land to make it available for economic redevelopment, job retention and job growth," according to Met Council documents.

But because the developer failed to adhere to part of the grant's step-by-step procedure -- filing the right paperwork at the right time -- the project likely will receive nothing.

The developer, Ned Abdul, calls this unfair. But the Met Council says staying true to the process is the only way to ensure that its grants, which began in 1995 and have been competitive since, stay fair.

Abdul began cleaning up the site before applying for Met Council funding. In rare cases that's allowed, but for such work to be eligible for funding, the applicant "must provide a letter to the Council ... that states that the applicant is going to start project work," according to Met Council documents.

The Hopkins project was one of 16 that applied for the $3.3 million available for funding. At its Jan. 9 meeting, the Met Council awarded 14 of those applicants money totaling $2.4 million. The council's community development committee delayed consideration of the Hopkins project until its Jan. 22 meeting.

The committee's vice chair, Annette Meeks, abstained from an otherwise unanimous vote against awarding the grant, saying she was "conflicted" and felt "very sorry" for the developer.

"This is why I hate these programs -- there are these bureaucratic forms and papers, and you get -- pardon me -- screwed in the process," she said. "I'm very sorry for that, because I think this is a very worthy project. But because they didn't play by every doggone rule, they're not going to get a dime."

Other members disagreed, saying the funding has done great things through the years, in part because of its competitive nature.

Using a number of criteria, such as enhancing a city's tax base, creating affordable housing and promoting growth, the council ranks the applications it receives.

The developer asked for the higher amount because the project got less than it had hoped for from the state Department of Employment and Economic Development, which awarded $112,500. Hennepin County provided $40,500 for the cleanup.

City backs project

Hopkins considers the project site, located on Hwy. 7, part of a "gateway" to the city.

"Plus, it [the project] wasn't asking for any public assistance other than the cleanup funds," said Kersten Elverum, director of economic development and planning. "We're still hopeful that it will move ahead."

The L.A. Fitness has received all city approvals, and Mayor Gene Maxwell attended the Met Council committee meeting in support of it.

Met Council staff did not score the project's application initially because the Minnesota Pollution Control Agency was investigating the site for improper handling of the asbestos abatement. That issue has since been settled with a $5,000 fine.

Also, a staff report states that the developer had secured a loan for the cleanup and thus did "not demonstrate sufficient need for Council funding." Marcus Martin, senior planner for the Met Council, said he warned the developer that the loan "would be a significant challenge in applying to the program. But I never tell an applicant not to apply."

However, Abdul said he never got a loan specifically for the cleanup, and he produced a mechanic's lien for the committee that showed he still owed $226,900 for the cleanup as of Dec. 20.

The committee's focus on whether there was a loan "really misses the point," said Daniel Schleck, Abdul's attorney. "The point is that the goals of this program are to promote jobs growth and tax-base growth in communities. And this project does all that."

Schleck said it's "unfair to say that because of some procedural issue, there may not be an opportunity for this project to go forward."