Proposed Cold Storage Expansion Launches Light Rail Planning Controversies

Hopkins got a dress rehearsal Tuesday night for the tough decisions the community will have to wrestle with as the planned Southwest Transitway project approaches.

City planners asked the council to temporarily prohibit expansion or development in “mixed-use zones,” saying such a moratorium would prevent more industrial use present in much of this space that goes against the city’s long-term vision. But owners of the Stewart Lawrence Group, which plans to expand its industrial , argued that this is the only type of development that the current economy can support.

In this instance, the developers won out—city council decided against a temporary ban. But this week’s discussion was just a preview of potential fault lines the Southwest Transitway project will create: property rights versus public good, city planning versus market realities and long-term vision versus short-term opportunities.

Mixed-use development—neighborhoods devoted to a variety of residential, retail and office space—is key to the image the city wants to cultivate with the eventual arrival of the light rail line. Think of Markeplace Lofts on Hopkins’ Mainstreet.

The Cold Storage site, meanwhile, is among the top three sites in the city’s light rail vision. Just a short distance from where the planned Blake Road train station, the 17-acre site backs up against a creek and is bordered by a bike trail, offering potential developers a massive chunk of prime property. Stewart Lawrence Group bought the property in 2007 with exactly this kind of redevelopment in mind.

There’s just one problem: No one wants to develop it right now. That’s forced Stewart Lawrence to continue with its current industrial use—as a 275,000-square-foot freezer leased by SuperValu, Deli Express and other companies. Deli Express, alone, ships 72 million prepared sandwiches through the space.

Because that’s the only use for the building, Stewart Lawrence continues to invest in upgrades and plan expansion. City planners fear this additional investment will make the company more reluctant to redevelop the site once the economic climate improves, or that the property could be sold to someone who’s not interested in development at all. The expansion could also force the city to shell out more in financial incentives in order to atttract developers.

While nothing on the city books at this moment would stop the company from expanding, a mixed-use ordinance would allow the current use but prohibit expansion.

Hopkins' plans for Blake Road embody the community's dreams for light rail development. The neighborhood is among the city's worst—with above average crime, tractor-trailors lumbering past residential neighborhoods and heavily trafficked streets ill-suited for pedestrian use.

Mixed-use development would transform the corridor into an enviable place to work and play. But as it stands, the current market simply doesn’t support the city’s dreams.

Meanwhile, the light rail line that is supposed to drive development is years away and, given the state's budget challenges, . Just before council discussed the moratorium, Hopkins legislators warned the city that the state’s funding challenges will delay the project further.

Stewart Lawrence, on the other hand, faces business realities it must deal with right now—including discussions with a prospective tenant and an existing tenant whose lease is up for renewal. Other property owners will inevitably face these same pressures as years pass without the fortunes of light rail. As Councilman Rick Brausen asked about Cold Storage: What are we supposed to do, ask them to sit and not do the best they can with the situation they have to work with?

Halting growth—even imperfect growth like the Cold Storage expansion—also risks crippling business and leaving abandoned buildings that make a bad area even worse.

“It’s sad to say, maybe our vision has to change a little bit, too, if the times are that tough,” Mayor Gene Maxwell said. “We’re not here to have somebody fail.”

The city would probably not have even broached a moratorium without Stewart Lawrence bringing their plans to the city in the first place—just to keep the city apprised of its plans. As development is practiced now, the company had no reason to believe the project wouldn't sail through.

“I’m left with the feeling that this moratorium is a direct result of my visit,” said owner Lawrence Pobuda.

City staff, however, were not forthcoming that the Cold Storage expansion was the catalyst for the moratorium. Kersten Elverum, director of economic development and planning, told Pobuda that there have also been rumblings of redevelopment in other corners of the city, specifically in the Shady Oak area.

But in truth, the city was responding directly to the Cold Storage expansion. City Manager Rick Getschow brought up the expansion at a work session the week before and then said the city attorney recommended a moratorium. Council members even worried that they’d face legal challenges from imposing a moratorium in response to a specific project, although they were told there wouldn’t be any problem. 

Council members such as Brausen have already noted . Pushing forward moratoriums to stop those who voluntarily tip off the city—and then downplaying that that's exactly what happened—will only make cooperation harder, although both sides parted amicably in this particular case.

Whatever the fate of the Cold Storage site, City Planner Nancy Anderson predicts that many other property owners will approach the council with the same issues.

 for more information on key Hopkins light rail sites.