(Photo: Graco's riverside factory and the rest of its comlex lie just upriver from the former Scherer Lumber property it seeks part of.  Photo by Steve Brandt)

The question of why the city apparently released Graco Minnesota Inc. from a requirement to provide a critical trail easement at its riverfront property remains unanswered a week after the controversy erupted.

The city's Department of Community Planning and Economic Development has yet to respond to a Star Tribune inquiry earlier this week on the topic. The former CPED employee who Graco representatives say orally waived the requirement deferred to his old department for an explanaation.

The issue: Graco was required to provide an easement as part of a 2000 deal in which it received tax-increment financing for the firm's substantial investment in its 20-acre site. Some neighbors were unhappy about the firm building a factory so close to the river, but were mollified by the easement clause for the long-planned trail.

The easement was qualified only by stating that it should be in a form agreed to by the city or Park Board and the company. Graco says that meant identifying the specific strip of land over which the easement for the trail would run. It also said that it had trouble getting any response from the the city or Park Board on the matter.

But the city certified in the waning days of 2009 that Graco had completed "all building construction and other physical improvements" in the redevelopment agreement with the city. A Park Board resolution attributes failure to consummate the easement to "miscommunication" among the city, Park Board and Graco.

Why?  So far CPED hasn't answered a direct request for an explanation. Graco also has said through a spokesman that CPED project coordinator Erik Hansen waived the easement clause orally in a meeting with the company. Hansen, who left CPED this month for a new job heading housing and economic development for the city of Brooklyn Park, said he'd let CPED respond.

Graco now is playing hardball with granting an easement because it wants a portion of the riverside land that the Park Board bought from under the company's nose from Scherer Bros Lumber Co. The Park Board is open to allowing private development on a corner of that site that's away from the river, but probably a more river- or park-oriented use than potentially a Graco corporate office. Scherer didn't respond to an inquiry on whether Graco had ever made an offer to Scherer, and a Graco spokesman said he didn't know.

The board-passed resolution on Wednesday allows room for further negotiation with Graco on an easement, as an alternative to going ahead with condemnation, but tempers will need to cool a bit. Although several commissioners praised Graco's past involvement in local affairs, they excoriated it for the easement issue, which may cost the Park Board a $1 million federal grant it has to build the trail. The Park Board needs to control the entire route of the trail from Boom Island to Marshall St. NE by May 31 to keep the grant.

Absent an agreement, the city's easement waiver will cost the Park Board both the cost of whatever a court awards in a condemnation and attorney fees.

Graco still has issues it needs to work through with the Park Board even if the easement negotiations were friendly.  They include such matters as how the trail will accommodate the paved fire lane that Graco installed to access the rear of the building, whether large gas tanks will move to better accommodate the trail, and whether there will be a fence between the trail and Graco. The Park Board also plans to install wiring for lights to make the trail seem safer since it will largely be out of public view behind the two-block-long factory. 

(Map: The planned East Bank Trail would swing around the undeveloped Scherer site north of the Plymouth Avenue Bridge and then run between Graco's factory and the river.)