Construction of a beautification project along Lake Minnetonka in downtown Wayzata will begin as scheduled Monday, city officials have decided, despite the possibility of problems related to the coronavirus outbreak.

The project, called Panoway on Wayzata Bay, has been in the works for almost a decade. The $10 million Phase I features a four-block plaza along Lake Street, a site now occupied by a parking lot, as well as a bike trail and pedestrian-friendly improvements to the street and nearby railroad tracks. A second phase includes adjacent parks and a boardwalk along the lake.

City officials acknowledged that a pandemic accompanied by skyrocketing unemployment and a looming recession might not seem like the ideal time to undertake a big, fancy development.

“It’s a weird time now — things are moving fast, and it’s an awkward thing to be talking about when public health is really at the forefront right now,” said City Manager Jeffrey Dahl.

“My concern is the optics,” said Mayor Ken Willcox. “If we proceed on this project of $10 million, people are apt to say, ‘What were you thinking? Why were you ignoring the big risk out there?’ ”

But in some respects, City Council members said, it’s actually a good time to get construction underway. With many retail shops along Lake Street temporarily shuttered under Gov. Tim Walz’s stay-at-home order, disruption to nearby businesses could be curtailed.

Other pros: The work might go faster with fewer people around and possibly wind up sooner. It provides jobs during a difficult time, and it folds in some utility improvements that would be needed anyway.

Jessie Houlihan, president of the project manager, Stahl Construction, said workers’ health will be protected and that social distancing is not difficult on a ground-level project.

In an emergency meeting Thursday, City Council members unanimously favored starting now. They discussed possibly helping area businesses by waiving or cutting license fees, amounting to about $150,000 a year. Offsetting the lost revenue would be about $100,000 the city could save by not providing free valet parking, since Lake Street businesses won’t be open anyway under Walz’s orders.

The message to residents, Willcox said, should be that Wayzata “is not going out of business ... there’s light at the end of the tunnel and we’re moving toward that.”

Not all local business people share that optimism. Stacy Carisch, whose family owns a block-long building with shops and offices across the street from the future plaza, said the project should be scaled back.

While it might make sense “in a perfect world,” she said, “in this crazy world, doing this project right now may hurt the city financially two or three years down the line.”

Dahl said staff evaluations indicated the project “does not jeopardize the city’s financial ability to weather the coming recession.” The city’s contribution comes primarily from budget categories other than general levy dollars, he said. Also, the state and the Three Rivers Park District are helping pay for it.

Becky Pierson, executive director of the Greater Wayzata Area Chamber of Commerce, said she had heard local business people express opinions both for and against Panoway. Some, including Carisch, are upset about losing the parking lot marked for the plaza site. But “if things were flip-flopped” and the city were considering razing a park to install a parking lot, “people would be up in arms,” she said.

“Hopefully we’ll get to the end and people will enjoy having it and will think they wouldn’t want to have it any other way,” Pierson said.