Enclave Development broke ground on a five-story, 89-unit apartment building at the former site of the city hall in Downtown Shakopee late last week.
The new building will be called The DECO, and in addition to the apartment units, there will be two levels of private parking, as well as retail and restaurant space along Holmes Street.
The lot was sold to Enclave for $250,000 last year, which was what it will cost the city to demolish and remediate the former city hall. That money will be paid back to the city out of the tax increment financing, which means the increase in property taxes that The DECO incurs will pay back that cost. The maximum estimated costs for TIF reimbursement to the city over the course of the next 25 years would be $2.3 million.
The Aug. 16 groundbreaking comes in the wake of development hangups last year, when some city councilors and residents questioned the density and location of the building.
At an August Economic Development Authority meeting last year, the Shakopee City Council failed to garner enough support for a comprehensive plan amendment to change the site’s land use from institutional to mixed use, which would have allowed the project to move forward. The amendment needed a 4-1 super-majority to pass, but Councilor Matt Lehman and former Councilor Mike Luce voted “no.”
At the next meeting in September 2018, Luce voted in favor of selling the lot to Enclave Development.
“To be honest I’m not totally against the project. I just have some unanswered questions,” Luce said. “It’s a matter of working the kinks out.”
Lehman said he wasn’t opposed to apartment buildings, but he thought the density was too high for this particular project. He did not vote, since he had to leave the meeting for a family matter.
“It’s higher (taller) than most of the buildings around it. To me it’s like it’s trying to do too much in too little of a space,” Lehman said. “It’s kind of everything you don’t like about Minneapolis. I think we’re trying to do way too much on too small of a lot.”
Mayor Bill Mars spoke last September in support of the project and said sometimes controversial projects end up being largely beneficial to the city.
“I think people want to live in downtowns, next to the action. (Our downtown) has a pulse,” Mars said.
Mary Isakson owns Babe’s Place, which is across the street from the former city hall site. She wanted the city to pave a parking lot in the former city hall space, and she pleaded her case again at the EDA meeting.
“I’m just one bar down there, but, again, I feel it is just as important as any other business out there,” Isakson said. “That is why, again, I want a parking lot — centrally located that will take care of all the businesses downtown, not just mine.”
Billy Wermerskirchen owns Bill’s Toggery, which is across the alley from the proposed apartments. He spoke in favor of the project and said it’s good for business when downtown visitors have to walk a block to park.
“I’d love to see 82 dwellings downtown. I can’t imagine the economic benefit it would have in downtown Shakopee proper,” Wermerskirchen said. “Every single day, people are walking by my front door. They’re walking by the front door to every business because they have to park a block or two away.”
With the railroad tracks located half a block from the site, community members also raised questions on social media about the noise and whether people will want to live so close to trains and their horns.
Representatives from Enclave Development told the EDA last year they would use new construction techniques to help dull the noise from inside apartments.
“The concern is valid. Enclave does not want a building that is loud and hard to rent. The good news is that with new construction techniques and… insulation, we’re already a step up,” the representative said. “It actually isn’t a hard thing to make a nice quiet building along the tracks.”
Construction on The DECO is expected to begin in September.