Development in Ramsey’s COR moving forward for some

The sounds of construction are ringing through the COR in the city of Ramsey.

While buildings like the Flaherty and Collins apartment complex are going up and Ramsey Housing and Redevelopment Authority-owned land is selling, other developers in Ramsey’s COR project believe the project is in limbo until the economy improves and the Armstrong Boulevard overpass is constructed. Photo by Tammy Sakry

While buildings like the Flaherty and Collins apartment complex are going up and Ramsey Housing and Redevelopment Authority-owned land is selling, other developers in Ramsey’s COR project believe the project is in limbo until the economy improves and the Armstrong Boulevard overpass is constructed. Photo by Tammy Sakry

Construction has been completed on the Northstar Commuter Rail station and work continues on the Flaherty and Collins luxury apartment complex.

This year has been busy for the Ramsey Housing and Redevelopment Authority (HRA)-owned property in the COR.

In addition to the three acres the HRA sold to Flaherty and Collins for a 230-unit luxury apartment complex, the HRA also has agreements with McDonalds and SuperAmerica to purchase lots in the project, located north of Highway 10 between Ramsey and Armstrong boulevards.

Since Flaherty and Collins broke ground, the brokerage community finally took notice of the COR, said Darren Lazan, development manager for the city and president of Landform.

When the city first started marketing the project in 2010, brokers laughed at it, he said.

Now in the project’s third year they want to get together to talk, Lazan said.

Lazan is currently working on deals with a senior housing company to build a 140-unit assisted living complex as well as marketing 13 single-family lots in the North Commons section of the COR.

He is also actively working with the YMCA to come to the city, Lazan said.

There is also interest from a private business man to build a basketball training complex.

With the west end of the COR modified to allow big box stores, Lazan said he has been working for three years to bring a Target store into the development.

But that will not likely happen until the Armstrong Boulevard overpass is built as Target does not want to bring its customers through an intersection that has traffic congestion and requires motorists to wait for a passing train on the rail line, he said.

Lazan has also heard from a group that wants to build a large strip mall at the eastern corner of Armstrong Boulevard and County Road 116.

“We are continuing to work on that,” said Lazan, who heads a 13-person Landform team working on COR projects.

Of the 118 buildable acres in the COR, about 45 acres are under consideration right now and another 18 acres have signed deals, he said.

While Lazan is busy working bringing in new development projects, not all of the projects Landform have succeeded.

Toti Development signed a purchase agreement in 2011 to build the Suite Living assisted living and memory care facility, which would have had 84 units on a 1.8-acre parcel west of the municipal center.

“The project crumbled,” Lazan said.

The economy did not recover fast enough for the project to work and the developer had too many other projects in the works, he said.

The HRA collected approximately $120,000 in non-refundable interest money on the property, but the sale was never completed.

Deals with Kwik Trip, Casey’s, CVS Pharmacy and Walgreens also did not work out for a variety of reasons.

While not all of his deals have worked out, Lazan, whose company receive a monthly payment of $15,000 as well as a 2 percent incentive on each finished project, is enjoying most aspects of the job.

“I went into this knowing it was going to be a challenge, but it has been a greater challenge than I imagined on many fronts,” Lazan said.

While the COR is something he loves working on and he has a great relationship with the remaining city staff, the politics of the project are something else, Lazan said.

“The politics are nonsense,” he said.

He has confidence in the COR, but the Ramsey City Council can make a sudden change at any time, like it did with the purchase of the Wiser Choice Liquor and consequently, the sale of COR property to its owner Jeff Wise, who is a sitting council member.

The deal had received unanimous votes all year until October, according to Lazan.

The deal was on track to be approved until a state statute was discovered that makes it illegal for a sitting council member to sell to or purchase land from the city.

Three council members decided against approving the sale.

In limbo

Although projects on the HRA-owned property are moving forward, for other developers with a stake in the COR’s 322-acre project area things are in limbo.

There is some activity going on in the COR and sales are trending in the Northstar retail area, which is located at the west end of the project, said Steven Johnson, Solomon Real Estate Group partner.

His company owns 17 acres in the COR and leases retail space to Coborn’s, Subway, Caribou Coffee, Acapulco as well as Anytime Fitness and other service-oriented businesses in its three strip mall buildings.

The retail area has about a 7 to 8 percent vacancy rate, Johnson said.

But the COR has a whole is more of a challenge to develop, he said.

The city purchased the property back from the bank in 2009 while the economy was slow and big box retail projects were not very active, according to Johnson.

For the COR project to progress, more residential projects need to be brought in and the economy needs to get better, he said.

The project will also deal with a changing market, according to Johnson.

“Development is not moving out into the suburbs, it is more about urban infill,” Johnson said.

“Large box retailers are not looking to go outside of the 494-694 belt.”

PSD President Jim Deal believes the COR project is in limbo.

The only development projects that are getting done are those that are city-backed, he said.

PSD, which is focused on land sales, developed and owns The Ramsey Office Plaza and the Veterans Administration Clinic building.

Projects on former PSD land include the Allina Medical Clinic, the Midwest Medical Examiner’s office and the NAU Insurance Company,

The company currently owns 22 undeveloped acres in the COR, including a parcel it plans to sell to Northgate Church.

“One of the most difficult things for development right now is that banks don’t like construction loans because too much can happen,” Deal said.

While the company is getting interest on properties it owns in Savage and Alexandria, there is not a lot of interest in COR property, he said.

It is easier for Landform to push projects because it is in the front line as a city representative, said Matt Kuker, PSD assistant manager.

The bad publicity the city has received on its council and the COR project has also impacted at least one PSD sale.

One company walked away and gave the council’s dysfunction as the reason, according to Deal.

“Companies are a little afraid to jump because of all the bad publicity,” Deal said.

The Armstrong Boulevard overpass needs to be done for the COR to spark development, he said.

Big box businesses have told him not to call until after the interchange is in, he said.

There is also the safety issues caused by the rail line, Kuker said.

Deal said the city needs to employ a transportation expert, such as it had when it hired Elwyn Tinklenberg to work on the rail station funding.

Kuker is concerned how the city is using the COR’s tax increment financing (TIF), he said.

“As a whole, we feel the TIF funds are eroding very fast. TIF should really be to draw jobs in the area,” Kuker said.

The city’s COR TIF, which is estimated to generate $185,708,929, was created for infrastructure, such as roads, as well as development incentives, such as was used for the Flaherty and Collins project, according to Diana Lund, Ramsey finance director.

Retail view

As a retailer in the COR, Coborn’s manager Vicki Wredberg does not see a lot happening in the project.

Coborn’s has seen a 5 percent increase in its customer base every year, at least until the Sunwood Drive project stalled the growth, she said.

The COR needs to continue to bring in more people and business, but there is not much going on beyond the SuperAmerica project, Wredberg said.

Tammy Sakry is at tammy.sakry@ecm-inc.com

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