Following intense public outcry against plans for high density housing in the city’s downtown, Mound city council members voted 5-0 Aug. 12 to summarily deny all seven of Schafer Richardson’s requests for redeveloping the Commerce Place shopping center into a three-story apartment complex.
“You, the citizens, expressed your dislike in this, and it caused me to open up and start to read into this and drill down into it and look at it more closely. And all I could see was the apartment complex smack dab in the middle of town,” said Mound Mayor Ray Salazar in what proved to be the council’s closing comments on the matter when it moved for a vote without further discussion.
Schafer Richardson, which has owned Commerce Place since 2008 and has sought its redevelopment for at least the past nine years, had requested a rezoning of the site to a destination planned unit development, a type of zoning that requires a conditional use permit to define and grant certain exceptions to or further restrictions within city code.
The proposal for 102 units of market rate housing at Commerce Place had generated a surge of public backlash from the start. General distaste for high-density housing, coupled with a weariness over what has been perceived as the gradual erosion of commerce in the city’s business districts fed the flames, which were further stoked by surmise that the developer was running a long game for bringing in subsidized housing in exchange for grant money.
That frustration led to an online petition as well as regular pen-and-ink signatures against the Schafer Richardson proposal; numerous emails, texts and phone calls to city officials; lengthy planning commission meetings and vocal public hearings. Come Aug. 12, nearly 60 people were at the Westonka Performing Arts Center for the last of these hearings while Schafer Richardson CEO Brad Schafer himself turned up to promote the project and respond to the subsidized housing rumors.
Commenting that it had been 10 years since last he stood before any council or commission on a project proposal, Schafer broke things down from a financial perspective.
“This is not—and will never be—affordable [subsidized] housing,” said Schafer, who didn’t shy from listing the different Section 8 projects that his company has taken on in and around the Twin Cities while also saying he knows that Mound doesn’t want that kind of housing.
Just before, Schafer had detailed that the apartment proposal for Commerce would cost $20 million to build and with that expenditure recouped only if its units were leased for the expected rents of $1,200-$2,175 a month.
“We’re building this building for $20 million. We believe it will be worth all of that over a period if we lease it up at the rents we expect to achieve. With affordable housing grants, with Section 8 grants, the rents would drop by $1.2 million a year. The building would go from being worth $20 million or a little bit more to about $8 million,” he said. “It would vaporize $12 million of value in the course of doing that. I don’t think my partners would be very happy if I vaporized $12 million of their money.”
Schafer also outlined the amenities that would be part of the apartment development, but residents and council saw little there to warrant the rents being charged. Mayor Salazar had little to say between the developer’s presentation and the opening of the publlic hearing other than that “The prices sound like luxury. The amenities don’t sound like luxury.”
Council members seemed already to have made their decision by the time public comment ended an hour later: following Salazar’s comments, the usual query for further discussion was met with silence and a motion by council member Jeff Bergquist to take a vote.
Council held just the one vote Aug. 12 that grouped all seven of the developer’s requests into one package and rejected them as one, showing a lack of support for even those items recommended for approval by planning commissioners early last month.
“All of us care about our town. We care about you. We want to do what’s right for the future […] We want commerce. We want better. We need better. We deserve better,” said Salazar. “That area was buzzing with commerce, and I think—I know—we can bring it back. We can bring commerce back to Mound.”
The city is now in the process of reviving in some function its former Economic Development Authority, a five-member body to be comprised of two council members and three residents from the Mound business community. The new EDA will be tasked with researching what the local market can support, and its members will take an active interest in finding businesses for the city’s long-standing vacancies.
“We will work to find good businesses and have commerce back in Mound. We will clean up Mound. We will not have vacant buildings anymore. With this economic development committee we can help find businesses,” said Salazar, his comments punctuated by applause.
But “This is not going to happen tomorrow,” he cautioned. “It’s going to take some time. It’s going to take a lot of hard pressure and it’s going to take a lot of research, but I’m looking forward to it. We can turn this around and we can make this happen.”