Modern Construction sought six months more amid pandemic to reach public and drill more into design, engineering; city grew impatient waiting for answers and wants to give public chance to comment and a general discussion in a joint session
The Elk River City Council on Jan. 4 unanimously denied a request to extend a preliminary development agreement with Modern Construction for a high density, market rate, mixed-use development in downtown Elk River.
The decision brings an end to an exclusive agreement with Jesse Hartung, an Elk River resident and owner of both Modern Construction and Tipsy Chicken, who had proposed a $40 million project and public-private partnership emanating from the city-owned downtown parking lot.
It proposed a parking ramp, with two floors underground, that is surrounded by a mix of commercial and housing development for downtown Elk River. It would increase public parking by 50%, provide new vantage points to look at the Mississippi River at heights reaching as much as four stories, and come complete with a long list of amenities including a hotel and event center.
In a letter to the city, Hartung requested a six-month extension for community engagement and to drill further into the designs and preliminary engineering. Hartung was not at the Jan. 4 meeting.
He sent a letter to the Star News on Jan. 7 announcing he was withdrawing his proposal.
The decision to deny the extension makes way for pent-up public reaction to spill out and still leaves Hartung the opportunity to submit an application for the project.
City leaders have become concerned that as time has gone on the community has confused the development agreement with support of the project. The development agreement went to great lengths not to bind the council to anything.
City staff is checking to see if a hearing and joint meeting of the council, HRA and EDA could be held on Monday, Feb. 22, to give voice to the people of downtown and the Elk River community and check in with city policymakers from the three governmental bodies to see where each body is at.
All have questions about the project, but without more answers to questions that have been posed, none has expressed support.
Council members also know they are in the midst of updating the comprehensive plan and have been soliciting input on Elk River’s future. They want upcoming discussions to be rolled into that effort.
The decision to deny the extension beyond the 16 months the agreement has already been in effect comes amidst a groundswell of opposition that has resulted in a petition that has circulated in the downtown area.
Elk River Mayor John Dietz opened the dialogue on Jan. 4 saying he would not vote in favor of any extension, citing a variety of reasons including the petition.
“The people I have talked to are not going to change their mind relative to this project,” Dietz said.
The mayor said existing downtown businesses are his main concern here.
“Several of them are struggling right now because of the virus,” he said. “The uncertainty of this project and the potential loss of parking spaces for several months may put many of them over the edge.”
Dietz said he wouldn’t support waiting three to six months to hold a hearing.
“Your exclusive agreement has now been in effect for 16 months,” Dietz said. “What has really happened in that 16 months other then a slideshow presentation as to what the project could look like and some soil testing? With all the approvals and public hearings needed to get this project off the ground (and based on what has been done to date), you at looking at another year to get through the paperwork.”
Dietz said it was time to think about whether the exclusivity of the agreement should continue and to get a read from the council if it supports any project in the current downtown parking lot.
“We haven’t weighed in on that,” Dietz said. “That discussion should be held before we go any further on this project.”
Another option referenced by the mayor could be an alternative location in the city. Hartung’s might be another location — outside of Elk River.
“Regrettably, the Elk River City Council and mayor chose not to accept my request for the extension,” Hartung wrote in a letter. “That would be disappointing but acceptable if that were the only decision, but it was not. The council and the mayor then made the irresponsible decision to call a public meeting against my request as the very citizen proposing the development.
“They somehow feel that in the middle of a pandemic where so many businesses will be just over a month from reopening, including the Tipsy Chicken, a public meeting was a good idea and that gathering feedback on my project without allowing me to present my full proposal and answer the community’s concerns was a good plan.”
The four other council members expressed their thoughts and concerns on Jan. 4, and it was clear the extension was not going to be granted.
“The longer we let it drag on as a ‘somewhat city-engaged project’ the more mysterious it gets,” Ward 2 Council Member Matt Westgaard said. “I’m not against a private entity putting together a project it may want to propose to the city, but there’s a process for that.”
Westgaard and the rest of the council agreed that the agreement didn’t need to be extended in order for the developer to continue to look at the project.
“When we agreed to (this developer’s agreement) we laid out a shopping list of things we would ask the applicant to address,” Westgaard said. “Here we are over a year later, and, in my opinion, they haven’t been addressed.”
Once an application is submitted, Westgaard said council members will have the facts and be able to detail and tell the story.
“So when we’re stopped in the grocery store, at the church or on the sidewalk, (we know the facts),” Westgaard said. “The challenge here for me is we haven’t had a lot of information given to us about what this is all about.
“We have had a fancy slide presentation, but there were no details and a lot of the questions weren’t answered. Timelines were vague and unrealistic, and that only puts people on eggshells even more.”
Ward 1 Council Member Garrett Christianson said he’s not against innovation and new ideas and economic development in the downtown area.
“I am struggling to understand what the point is to extending the developer agreement,” he said.
Newly elected Ward 3 Council Member Mike Beyer, who has been sitting through meetings for the last eight months, said his feeling has been the process taking place has lacked vetting.
“There has been a lot of consideration,” he said. “To me, the vetting process wasn’t there.
“Do we really need something? Do we really want something? I’m not sure the council is ready to say.”
Ward 4 Council Member Jennifer Wagner, who approached the Elk River HRA earlier that night about scheduling a joint meeting, said there’s still so much uncertainty about whether the City Council wants redevelopment.
She said there was no harm for the first couple of extensions but over time has increasingly felt like the process was backward.
“The presentation was phenomenal, incredibly innovative and forward thinking,” she said. “Altogether, we’re doing this backwards.”
Wagner promoted the idea of bringing policymakers together.
“We have an opportunity to clear up uncertainty with the community and downtown businesses,” she said.
The hope of having a meeting on Feb. 22 was suggested by Dietz to have a night where this would be the only item on the agenda.
“Citizens will have a chance to say their piece,” Dietz said. “The uncertainty is very real for the people downtown. They are very nervous.”
Hartung said he’s not anywhere near being at a spot where meeting with hundreds of people to try to determine what the city should look like in five or 10 years makes sense.
“It is appalling our mayor and council think that’s an important discussion to be having right now,” Hartung said.
He said whether a community member supports development downtown or prefers that it stay the same, everyone should agree it’s irresponsible to hold a public forum of such importance at this moment in time when business is just reopening, the virus is still surging, and people are still trying to navigate the challenges of everyday life.