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Home My WebLink About1988-07-16 NAC Memo to OPH Re MN RE Journal Article MEMORANDUM TO: [-,a Vo n n -2 so 160 FROM: !!44i-0 Lic!it northwest DATE: 1 ", H'33 associated RE: Park Heights St. Crnix'lall consultants, inc. FILE NO •02 (612) 925-9420 minneapolis, mn 55416 4.',11 �xcelsinr Plvd. Sutte 410 in carage ' vou hav2 iot seen that atta-! - article, I tho it �-Iiqh 'e df inter 4- to ' ;OU. YOU May wish to pass tiiis along to Vie 'ifly :'ouncil mem;'iers for their , . il 7 --, ., orawtion. cc: Lyle Fckber7 WHITE - ORIGINAL YELLOW - FILE COPY PINK - C FILE July 4, 1988 Minnesota Real Estate Journal rage a wl - RETAIL • S•ra••. t. Croix Mall under op tion BATTLE GOES ON FOR a '. >�` HERBERGER'S LEASE „ >r X, he Stillwater area's unpredictable retail real estate market might soon experience another new twist. A St. Louis Park -based partnership is negotiating to buy the St. Croix Mall and a peripheral retail and service commercial stjrip center. The prospective buyers say they hope to re -sign Herberger's and follow through on long - delayed mall expansion plans. A partnership of Watson Centers Inc. and , Bergeron & Associates Inc., both of St. Louis Park, has until December to exercise an op- tion to buy the retail centers, according to Steve Watson, Watson Centers president. J St. Croix Mall and the unnamed peripheral 3 center total almost 200,000 square feet. The_ —c{ Po; a;.•> centers, with a commanding view of the St. ' ` b _ • � Croix River valley, are on 10 separate parcels > in Oak Park Heights, just south across Min- 0 nesota Highway 36 from Stillwater. k`'' ° Eight of the 10 parcels are owned by Nor- a ris M. and Norvin L. "Red" Swager's Oak A St. Louis Park partnership has the St. Croix Mall and a peripheral center under option. Park Development Co. Inc., one is owned by Swager Bros. Inc. and another — occupied by Croix Mall area began in 1970. In 1984, they ject: Robert Scott Holdings Ines proposed "Our goal is to consummate a deal with • the K mart store that anchors the mall — is began a work on a three -phase renovation and Woodland Lakes retail and hotel develop- Herberger's and expand the mall," he says. owned by K mart Corp. The K mart proper- expansion of the mall. In 1985, $4.3 million ment, southeast of the intersection of The Swagers had proposed attaching ty would be excluded from the sale, as would in Washington County Housing and Highway 36 and County Road 5 in Stillwater. Herberger's directly to the east end of the ex- numerous outlots occupied by Goodyear, Redevelopment Authority (HRA) bonds However, R. Scott Steindorff, president of isting mall and adding additional space to the Champion Auto Parts, Kentucky Fried were sold to help pay for the third phase, an Robert Scott Holdings, encountered dif- south. While the size of the expansion would Chicken, Pizza Hut, McDonalds, Dairy expansion of about 100,000 square feet. ficulties of his own (MREJ, 6/20/88). be about the same, Watson and Bergeron Queen and others. Herberger's, which signed a lease for 42,120 Stillwater officials say Robert Scott Holdings would would take a different approach, put - The parcels Watson and Bergeron would be square feet in January 1986, was to anchor the has defaulted on the Woodland Lakes ting about 8,000 square feet of smaller tenant buying have a total estimated market value of new space. development contract, and almost $1 million space between the anchor and the existing more than $3 million, the Washington Coun- But St. Croix Mall had to be refinanced in liens have been attached to the Woodland mall. ty Assessor's Office says. before the thir &phase could proceed, and that Lakes property by creditors who allege they The partners would also take advantage of The sale and resurrection of St. Croix took longer than expected. Because of the haven't been paid. the sloping St. Croix Mall site by building Mall's expansion plans would be the latest in delay, Herberger's was able to exercise its Last month, Herberger's terminated its Herberger's above 15,000 square feet of new a series of developer efforts to grab a piece of right to terminate its lease. Woodland Lakes lease. Watson says his group convenience center -style space. Another the Stillwater area's growing retail market. Herberger's officials signed a lease Sept. is now negotiating to put the St. Cloud -based priority would be to fill about 14,000 square The Swagers began development of the St. 30, 1987, for 62,400 square feet in a rival pro- retailer back on St. Croix Mall's tenant roster. Continued on next page •. .w Page 6 Minnesota Real Estate Journal i HOS TALITY • Continued from revious a e aimed at the corporate traveler but with the An oVs feet that rema ns vacantin space formerly oc- weekend tourist in mind, Kirchner says. cupied by Montgomery Ward. According to previous market studies and If the sale closes, the partnership might 7C an informal survey of local businesses, de- also finance the project differently, although new V h mand exists for 75 rooms, more if meeting Watson says the partners will try to use the space at the Greenhaven clubhouse is used. HRA bonds. "We're not trying to totally rein- CITY COUNCIL Dining is available at Greenhaven, including vent the wheel here," he says. REVIEWS PROPOSALS banquet space for about 500, Kirchner says, It appears that a new owner would be able as well as a strip of nine restaurants within to use bonds sold for Oak Park Development. about a block's walk including Perkins Regardless of who would use the bonds, Anoka city officials would like to Restaurant, McDonald's, Pizza Hut and however, the structure of the bond financing expand the city's lagging lodging Bob's Country Kitchen. requires third phase construction to begin by market. Only 25 hotel rooms are available in On June 20 Anoka's economic develop - the end of this year. the city that boasts of 500 businesses, a coun- ment commission recommended the council According to Washington County records, ty seat, more than 50 active civic organiza- approve the 121 -room Holiday Inn proposed the estimated market value is $1,654,700 for tions, several churches and a history dating to by Douglas Anderson /DDD Corp. of the major part of St. Croix Mall, $438,600 for the 1850s. Mankato. The $5 million hotel would feature the former Montgomery Ward space, `Anoka is getting discovered;' says Bob 11,500 square feet of recreational space — a $150,300 for space occupied by Mall 1, 2 & Kirchner, director of community develop- pool, whirlpool, sauna, and games area — 3 Theaters, $798,000 for the part of the mall ment. The city will host a national car show meeting space for 30 people, and a adjacent to K mart, and $26,600 for a parcel this month and sees potential for a convention lounge /dining area with liquor service. The of land and parking space. market and weekend travelers, he says. average daily rent would be $50, Kirchner Three parcels making up the peripheral The Anoka City Council is scheduled to says. Parking for 390 cars would surround the center have estimated market values of select one of three developers for the new hotel. $290,800, $254,700 and $114,900. Vacant land hotel at its July 5 meeting. Kirchner notes this hotel would be listed and parking space adjacent to the center is a valued at $140,300. Financially troubled Swager Bros. Realty Inc. had leased space in the peripheral center, noka hopes to have a new hotel open on but recently moved to another building on the Highway 36 strip. its 3.7 acre Castle Field baseball park at On the surface, it might appear that the Swagers want to sell St. Croix Mall and the Highway 10 and Main Street b spring. The p er ipheral center to raise cash in a last -ditch b effort to rescue Swager Bros. Realty, now be- ing liquidated in federal bankruptcy court. site is adjacent to the city - owned Greenhaven But Norris Swager, president of Swager Bros. Inc., emphasizes that his firm has no business Country Club and Golf Course. or financial ties to Swager Bros. Realty. The - bankrupt firm was founded in 1977 by a younger generation of Swagers. Anoka hopes to have a new hotel open on with Holiday Inn's national reservatior Watson Centers is a retail real estate its 3.7 acre Castle Field baseball park at system. development firm with projects in Min- Highway 10 and West Main Street by spring. According to the proposal Anderson ha neapolis; Des Moines, Iowa; Lincoln, Neb.; The site is adjacent to the city -owned and secured a letter of interest from Norwes and Traverse City, Mich. The firm's only operated Greenhaven Country Club and Golf Bank Mankato. Construction would begir Minnesota property is a Rainbow Foods- Course. next spring and the hotel would open in fal anchored strip center at 27th Avenue and The city council is reviewing three hotel 1989, according to the proposal. Lake Street in Minneapolis. proposals received in response to a request Plans were also submitted for a 71 -roorr Bergeron & Associates is a commercial for proposals sent out last December. Anoka LaCorte Inn by John Kahler. The L- shaped leasing agent. — Murray w„ {/' wants a facility with a mix of suites and rooms three -story hotel would include a mix of two GOT YOU C For every aspect of the commercia