PLACE’s Via Luna project proved to be a moonshot that never got off the ground.
For more than six years, the nonprofit developer has pitched various versions of a development along the Southwest Light Rail Transit line in St. Louis Park. However, development rights for a southern half of the plan called Via Luna, or via the moon, expired at the end of 2019.
As recently as last October, the Minneapolis-based developer had proposed a scaled-back version of the Via Luna plan. The proposed amendment had called for a residential building to be relocated to the corner of Wooddale Avenue and West 36th Street, with the number of residential units in it reduced from more than 80 units to 50 units. A planned hotel would have been reduced from six stories to five stories and moved to the east side of the site, and parking plans would have changed.
Sean Walther, planning and zoning supervisor for the city, said, “They weren’t able to produce the plans that were required to meet the deadlines. The city expected to have a complete set of building plans, and they weren’t able to generate that level of detail in the time frame available.”
As a result, PLACE withdrew the application for a development amendment. Walther said the city officials had anticipated the nonprofit would request another extension. Council members on the St. Louis Park Economic Development Authority had previously granted a series of extensions.
The city has already issued building permits for the north section of the project, called Via Sol, or via the sun.
“We’re also going to have to determine how to separate the project now since it looks like the south side will not be proceeding,” Walther said.
The organization changed architects for both sections of the project last fall, “causing substantial delays to both,” according to a Nov. 18 city staff report. The state’s building code required all construction documents to be resubmitted and approved as a result. The city’s contract with PLACE requires construction for the Via Sol section of the project, which would include 218 residential units, to begin by Friday, Jan. 24.
“If no construction has started by that date, PLACE will be required to apply for a new building permit,” the city document warns.
A Nov. 11 letter from PLACE Executive Director Chris Velasco to the city noted that the northern, Via Sol project had broken ground, but he said, “The site turned out to be even more contaminated than environmental studies had shown. Remediation took longer and cost nearly twice as much as had been budgeted. All contaminated conditions have now been abated.”
Velasco’s letter said the developer terminated the architect “for default of their contract,” switching to MSR as the new architect. He noted Erik’s Bike Board & Ski had expressed interest in opening a bike shop in the Via Sol project and that 100 people had joined a waiting list to live in the development, which he projected would open in August 2021.
As for the Via Luna project, Velasco’s letter states of the previous architect, “They withheld the architectural plans from the project and caused a substantial delay. LHB Architects have taken over and redesigned the project from scratch, a cost to PLACE and to the timeline.”
The letter also indicated a $12 million gap in financing for the proposed hotel.
Controversial letter and reaction
Council members had been poised to discuss potential extensions for both portions during the Nov. 18 meeting. However, Velasco, who did not return a call from the Sun Sailor, sent another letter Nov. 15 canceling the Via Luna project.
Velasco singled out the city’s chief building official for requiring complete construction documents instead of “a typical white-shell package” before he would issue a building permit.
“Unfortunately, that decision makes it impossible for us to complete the Via Luna and hotel project,” Velasco said.
He said PLACE would coordinate with the city “to determine any other implications of the project’s halt.”
Velasco added, “In addition to millions of our nonprofit’s money expended, and the private investments in this effort, we regret not bringing to the community live and work space for creatives, fifty affordable apartments, an Arts & Transit Plaza, Creative Co-Working, job training for low-income folks, and a restaurant and coffee house and hotel, all under a LEED-Gold umbrella. We cannot understand why a project bringing so much public good would have a more difficult approval path than for-profit projects for the wealthy.”
Official study session meeting minutes indicate a tense situation in which Councilmember Anne Mavity asked if staff believed the north portion of the project should also come to a stop and then-Councilmember Thom Miller objected to Velasco’s letter.
Miller said the city had been an extraordinary partner in the project and that he would not communicate with a partner is such a way or call out a staff member after the city “has done everything possible to make this project happen,” according to the minutes.
Of Miller, the minutes state, “He is concerned about the attitude from PLACE, adding this may impact the north construction and create ongoing problems. He said he has been an advocate of this project and does not think the council made a mistake partnering with PLACE but added he does feel the partnership has had a significant break and this is his chief concern.”
The minutes state of Mavity’s concern about the north side of the project, “Now this becomes a big risk and funding would be lost if the project were not to continue.”
Then-Councilmember Steve Hallfin noted he had begun to vote against extensions for the project despite his previous support.
The minutes record that Hallfin called Velasco’s letter disappointing and that he felt sad about the situation. Hallfin also pointed out that the city could have brought in a new developer if council members had not continually extended project deadlines. He told Velasco “to get the north side done and to do it right,” according to the minutes.
Meghan Phimister, who served as co-chair of the nearby Sorensen Neighborhood Association during much of the planning for the project, recalled warnings from city residents about the developer.
“Not allowing competitive bids on this very desirable piece of property was a reckless use of taxpayer money with a nonprofit that has a less than stellar history on previous projects,” Phimister said. “Even with all the red flags residents raised at various meetings, time after time the city continued to back this project.”
She said the amount of time spent on the project by city staff members, council members, residents and members of city boards and commissions is “unimaginable.”
Phimister added, “The council should have been more responsible and not allow this project to drag on.”
The building permit for the north section will still expire Jan. 24 if construction has not begun, said Community Development Director Karen Barton. If work has not started, the developer could seek to cancel the permit and obtain a new building permit, but doing so would create added costs and delays.
“From what I understand, they are planning to get in the ground prior to that date,” Barton said. “We obviously want to see PLACE move forward with the north components.”
A sixth contract amendment council members could consider in February would formally remove the Via Luna project from the deal and would move plans for an anaerobic digester from that phase to the remaining Via Sol phase.
City Manager Tom Harmening indicated that other developers have had an interest in the Via Luna site but have stayed on the sidelines because of the contract with PLACE.
“They would say, ‘Yeah, we’re interested,’ but they’re not going to spend money pursuing something when it’s under contract with another developer,” he said. “But it is an attractive site.”
Similarly, Walther said, “It’s an excellent site for development on the future (light rail transit) line, and we’re confident we’ll have a great development there even if it’s, unfortunately, not this one.”