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Schafer Richardson is proposing a 102-unit apartment complex for the site at Commerce Place in downtown Mound. The current shopping center posts an occupancy rate of just 32 percent. (Elizabeth Hustad/Laker Pioneer)

Mound planning commissioners met via Zoom July 7 for a public hearing on the proposed redevelopment of the city’s downtown Commerce Place shopping center. The current proposal, begun early in 2018 and in its current state featuring a 102-unit apartment complex, is the first time in more than a decade that redevelopment at Commerce has seemed a real and near possibility—and people are not happy.

Two residents viewed the project as a “bailout” for the special conditions being sought by developer Schafer Richardson, while at least two others were vehement in questioning whether the proposed market rate apartments wouldn’t later be converted to Section 8 housing after Schafer got the opportunity to “strip the equity out” of it. Others voiced more general frustrations with aesthetics, traffic and what they saw as a forced change of character for downtown Mound.

At 10:45 p.m. commissioners voted to extend the meeting, already nearing the 4-hour mark, before opting to table the most controversial item they were set to vote on, a recommendation on the issuance of a conditional use permit for the site.

“It’s the biggest building that’s been built in the city in forever and we’re trying to rush through it and I’m not going to do that,” said planning commission chair David Pelka as the clock ticked past 11. Earlier in the evening and in written comments submitted prior to the hearing, residents had taken commissioners to task for holding the hearing over Zoom instead of in person.

Mound resumed in-person meetings for its council July 14, and the planning commission will reconvene July 21, this time in person. The two government bodies are utilizing Westonka Performing Arts Center through early November.

Schafer Richardson had applied with the city for a conditional use permit for the site at Commerce Place that currently houses an ill-maintained shopping center more than two-thirds vacant and moored in a parking lot of cracking asphalt.

Schafer bought the 1980s-era Commerce Place 12 years ago. The current proposal, one of high-density housing, marks the first time redevelopment for that site has progressed beyond just concept plans, and it had some officials asking whether it wouldn’t be prudent to take it up.

“Are we willing to forgo some kind of update to that property and some kind of tax revenue and some kind of influx of population to our town, betting on a possible other development that could or could not show up that would include some sort of retail?” asked commissioner Jon Ciatti, who noted the city’s “poor track record” in attracting new business.

Even when retail has been proposed, it hasn’t met with much support. The initial design for the project, publicized by Schafer in April 2018, had retained some of the commercial character but was ultimately rejected; another design, from November 2018, would have kept Anytime Fitness at the corner and added retail above the gym. That design, too, was waved off when Schafer indicated the project was only financially feasible if the apartments could reach four stories.

Years of scrapped concept designs—17 iterations in 12 years—and the need to specially create a planned unit development (PUD) for the site at Commerce had commissioner Jake Savstrom wondering July 7 whether Schafer was “trying to get a little too much out of the property.”

The PUD, which commissioners voted 7-2 to recommend the city create, would, if granted by council, give Schafer flexibility in the project, including exceptions from certain aspects of the city code regarding land use requirements like parking and design elements. Commissioners also voted 8-1 to recommend a change in city code text that would specifically include medium and high density residential as permitted uses in all similarly designated PUDs, something that Rita Trapp, planning consultant for Mound, said was likely omitted as an “oversight” when initially written.

Like Savstrom, many residents were also against giving Schafer any concessions via PUD. “It’s not our responsibility as the city of Mound or as the people that live in Mound to bail out somebody that made a bad investment decision,” said one resident who was all for developing the property but only within the current standard. “The contractor purchased this property a long time ago, they took a gamble, the gamble’s not paid off. It’s not our responsibility to make them whole,” said another.

But apart from any perceived special treatment for the Commerce Place redevelopment, residents voiced dissatisfaction with the proposal that ranged from the tired disappointment that downtown housing was “mucking up my waters” to the hard-edged accusation that Schafer was running “a well-orchestrated development strategy” across Hennepin County. Commissioners opened the public hearing just before 9 p.m., and about a dozen residents made their opposition known over the next hour; not one spoke in favor of the project.

A couple of residents questioned whether the $1,200-$2,175 apartments were truly market rate units as Schafer is promoting, or whether the intent wasn’t for them later to be converted into subsidized housing. “They’re going to strip the equity out and be gone and we’re here to deal with it, that’s my concern,” said one resident, repeatedly slamming his fist on a table.

Trevor Martinez, development manager for Schafer Richardson, said that such a conversion wasn’t the end game, that Section 8 vouchers for the studio and one bedroom units would be between $720 and $860, about $500-$700 a month short.

“There’s no way our lenders would ever consent to us accepting a contract to cut our rents by anywhere near that amount,” said Martinez. “That would immediately put us in foreclosure in the bank and 100 percent of the money that we’d have spent on the property we would lose.”

The proposal has gained opponents online, too. A Change.org petition against the project was started just days before the July 7 hearing. As of press time Tuesday, July 14, the petition had garnered 915 signatures and a renewed plea to residents to pack the PAC July 21.

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