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HRSR INFORMATION 06-05-2003 Printer version: A downtown renaissance in the suburbs Page 1 of 3 startribune.com Close window • A downtown renaissance in the suburbs Larry Werner Star Tribune Published 05/29/2003 Pinehurst Property Advisors has signed several tenants, including Chico's and Christopher&Banks women's clothing shops, for a new downtown building. The leasing activity comes at a time when commercial vacancy rates have reached record highs in the Twin Cities. But Paul Maenner, a principal of the Edina-based property management company, isn't worried about those vacancy rates. That's because the building he's leasing isn't in the central business district of Minneapolis or St. Paul or in a suburban office park -- it's under construction in the heart of Wayzata's historic downtown. While brokers scramble to fill empty space in city downtowns and suburban office parks, some developers are building in the historic downtowns of suburbs. Demand for space in these areas is fed by attractive demographics, an affinity for the small-town feeling and the desire of many entrepreneurs to do business in the small cities where they live. One price developers say they pay for building new in old downtowns is that they are required to comply with architectural guidelines drawn to preserve the historic character of these areas. "Downtowns are unique: They just don't happen more than once," Maenner said "Fiftieth and France [in Edina] is unique. Downtown Wayzata is unique. And River City Centre in Shakopee that uniqueness brings people. And it's close to home." Mike Zerby Star Tribune The new building in Wayzata, which faces the city's main street and Lake Minnetonka, is eight minutes from home for Jim Beltz. The Wayzata businessman is building the three-story brick structure with offices above retail space. The structure is replacing a one-story office building where Beltz had operated a company that sold service contracts for boats. Beltz's new building, which features balconies from which office tenants can gaze out at the lake, is both an investment and a contribution to the city where he mow. made his fortune,Beltz said. "My goal is not only to own a nice building but also to provide Wayzata something that would not have happened had we not taken the initiative to spend 50th and France in Edina the time to tear down our old building and put up a new building," Beltz said. Beltz is typical of builders who opt for suburban downtowns rather than big-city or suburban office developments where most new commercial construction occurs. He's willing to build on space too small for many developers, and he has community connections that help in dealing with local priorities, Maenner said. • "It's difficult to do these projects because you have to get a toehold in the market somehow," said Maenner,who was hired by Beltz to handle the building's leasing and promotion.. "Jim and the city worked very closely together on trying http://www.startribune.com/viewers/story.php?template=print_a&story=3907199 5/29/2003 Printer version: A downtown renaissance in the suburbs Page 2 of 3 to craft a project that would meet city goals on pedestrian activity and commercial activity and Jim's goals of having a successful project." _ g•� Beltz said that if he were a professional developer he probably wouldn't have Downtown development in spent the time it took to get approval for his project. Lakeville "There are a lot of places where you can put your money," Beltz said. "I didn't have to spend a period of my life going to City Council meetings and all the frustration. But I did, and I don't regret it. A lot of people would take the easy way out and say, 'I'm going to build something in Naples [Fla.].' " Similar challenges 701 Building in Wayzata Maenner's office is in a building at 50th and France that posed challenges similar to those Beltz has faced in Wayzata. Still, it is 96 percent occupied. The Pinehurst Building project, which features stores under offices as is preferred in the popular downtown Edina district, took three years to build. The brick building, which features a three-story cupola at the corner,replaced an old service station and low-slung commercial buildings. The Edina building was developed by a local businessman who was required to adhere to design. guidelines for the area,which overlaps the Edina-Minneapolis border. Features as brick exteriors, urban streetscapes and rear parking contributed to a more attractive structure, despite the hassle of dealing with two jurisdictions, Maenner said. • "They're asking for a lot of the right things --the right materials, the attention to aesthetics, attention to idea that something's going to be there a long time and that the community should have some say on how it works," he said. But Chris Slania,planning liaison for the city of Wayzata, said the design guidelines required in that city's downtown area aren't popular with all business people. "I know a number of property owners feel the city is being too restrictive," Slania said. "I think it gives property owners some guidelines to follow on what we want-- a pedestrian-friendly, small-town, village feel." Design guidelines also are being debated by the city of Farmington, which is planning a commercial project called the Spruce Street Corridor Development Plan. In a grant application to the Metropolitan Council, Farmington officials said they want to develop a 450-acre project of offices, retail and housing next to the historic downtown "in a way that . . . complement[s] rather than conflict[s] with existing businesses and neighborhoods." A similar development, called the North Central Business District, is being planned along the Rum River in downtown Anoka. Among the factors being discussed in a citizen-involvement process is how to integrate these new buildings with historic buildings in the north-metro suburb. Shared optimism • Developers of these projects cite similar reasons for their optimism that they'll succeed-- a desire for suburban residents to work near their homes and the desire of businesses to be near affluent customers in http://www.startribune.com/viewers/story.php?template=print_a&story=3907199 5/29/2003 Printer version: A downtown renaissance in the suburbs Page 3 of 3 the suburbs. • "The baby boomer is getting older and wants an easier shopping experience, prefers to be close to home, prefers to be able to drive up," Maenner said. Others agree. "I moved into Wayzata 18 months ago, and I can tell you it's wonderful to be seconds from work instead of an hour from work," said Diane Wilson, president of the Wayzata Area Chamber of Commerce. "And then there's the small-town feel. It's a very comfortable thing to walk down the street and know everybody you see." Kevin Carroll, community development director for the city of Farmington, said he receives "a number of calls a month from people looking for downtown space, and, frankly, there isn't much to offer. People are looking at Farmington as a place to move a business because of the growth." The historic downtowns also have attracted new developments from public agencies that have built mixed-use proj ects to meet the demand for commercial space and senior housing. In downtown Lakeville, for example, the Dakota County Community Development Agency(CDA)built Main Street Manor,which has senior housing above retail and commercial space. A similar downtown building, called River City Centre, was built by the Scott County Housing and Redevelopment Authority (HRA) in partnership with the city of Shakopee. Both projects are fully occupied. In Lakeville, the CDA changed its original design to incorporate elements of the architectural guidelines adopted by the city and the Downtown Lakeville Business Association. Bill Jaffa, director of the Scott County HRA, said these new buildings are good for historic downtowns and for commercial tenants,who appreciate the design guidelines. "We wanted to preserve the character of the old downtown,with apartments above storefronts,bay windows and French balconies," Jaffa said. "So you're going into an historic replica structure that has different character, and the rent is more reasonable." Jaffa claims that the Shakopee building,which was built in 1997, has pioneered interest in these "new- old" buildings in suburban downtowns."A lot of the stuff being done now came after the prototype of River City Centre," he said. Larry Werner is at lwerner@startribune.com. ©Copyright 2003 Star Tribune.All rights reserved. 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