Uptown building owner proposes flooding lower level to resolve pumping dispute

The owner of a luxury apartment building in Uptown wants to flood the lower level of an underground parking lot in order to end the illegal pumping of groundwater into the nearby Chain of Lakes.

The proposal by Lake and Knox LLC, the owner of the 57-unit building at 1800 W. Lake St., involves filling the parking level with sand and gravel before sealing it off from another basement parking level that's above groundwater. The company would then build underground parking on an adjacent lot in about a year, using 24-hour valet parking to serve residents during the interim.

The proposal was filed in Hennepin County District Court before a hearing next week on a request by the city of Minneapolis for an injunction to end the pumping. It will be heard by Judge Philip D. Bush, who earlier ruled it was illegal for the apartment building to discharge groundwater through storm sewers into the nearby lagoon between Lake Calhoun and Lake of the Isles.

The city asked Bush to order an end to the pumping immediately. But if Bush decides to give Lake and Knox time to implement the plan, the city asked for a payment of almost $2,300 a day for using the city sewer and as an incentive to end the discharge quickly. It also seeks a contempt citation of $5,000 per day if there are any violations of the injunction.

Negotiations are continuing, according to representatives from each side. The landlord briefed tenants on its proposal this week, according to a resident who asked not to be identified.

The controversy arose after Lake and Knox obtained city permission to temporarily pump water into the sewer and lagoon to construct the building. But the pumping to keep groundwater below the lower parking level continued without city permission after the building was completed in 2011. The city argues that the pumping is raising the temperature of the lake, creating unsafe ice conditions in the lagoon, and filling the lakes with algae-feeding phosphorus.

The two sides have examined at least a dozen alternatives, ranging from injecting pumped water deep into the aquifer to piping it to the metro sewage system. But all posed insurmountable permitting or financial barriers, according to the developer's attorneys.

The preparation includes moving building mechanical and electrical systems out of the lower level, cutting holes in the basement slab, cutting that slab free from footings, waterproofing precast concrete beams, filling the area and sealing it off. The holes and slab cut would relieve hydraulic pressure from pushing the parking level upward and allow groundwater to flow through the site, according to architect Dean Dovolis.

Lake and Knox officials said they would spend another $2 million to build about 30 basement parking spots for 1800 W. Lake St. residents on property just east of the apartment. The apartment building owners hope to close on the land for the new lot around July 1. The valet parking would cost a total of $192,000 and might use as many as 10 on-street spots, the court filing said.

Attorneys for the apartment building owners argue that the phased approach of filling in the lower level and using valets while constructing replacement parking is necessary to avoid breaking leases with its tenants who require parking. Breaking leases would mean that tenants could leave, the brief said, leaving the owners without the cash flow to move ahead. One appraisal estimated that losing the 37 spaces without replacing them would cut the building's net cash flow, before mortgage payments, from $836,655 to $304,957.

"Parking is a critical amenity in the luxury apartment market," Lake and Knox attorneys argued.

According to the appraisal, the building offers 1.46 parking stalls per unit, which was noticeably more than comparable nearby buildings.