Loading...
2025-06-24 WS City Council Agenda W ORK SESSION RICHFIELD MUNICIPAL CENTER, BARTHOLOMEW ROOM JUNE 24, 2025 5:45 PM Call to order 1.Discussion of the Lyndale Gardens retail parcel. Adjournment Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96 hours in advance to the City Clerk at 612-861-9739. AGENDA SECTION:Work Session Items AGENDA ITEM #1. STAFF REPORT NO. 20 WORK SESSION 6/24/2025 REPORT PREPARED BY: Jan Youngquist, Economic Development Manager DEPARTMENT DIRECTOR REVIEW: Melissa Poehlman, Community Development Director 6/16/2025 OTHER DEPARTMENT REVIEW: CITY MANAGER REVIEW: Katie Rodriguez, City Manager 6/17/2025 ITEM FOR WORK SESSION: Discussion of the Lyndale Gardens retail parcel. EXECUTIVE SUMMARY: The former Lyndale Garden Center site, generally located on the west side of Lyndale Avenue near 64th Street, was purchased by The Cornerstone Group in 2011 for redevelopment. The City Council approved the Lyndale Gardens Planned Unit Development (PUD) in March 2013. Subsequent redevelopment as part of the PUD included the Lakewinds Food Co-op, an amphitheater and quasi-public space, 66 apartments, 8 townhomes, and 30 condominiums. One vacant parcel of the former Lyndale Garden Center site remains to be redeveloped. The subject Property (Property) is located at the southwest corner of Lyndale Avenue South and 64th Street West, just north of Lakewinds Food Co-op and east of the amphitheater. A retail use for the Property is part of the overall development plan, although the size of the proposed retail use has evolved over the years: The original PUD approved in 2013 included 9,000 square feet of retail space and 2,600 square feet of restaurant space for the site. The PUD was amended in December 2013 to allow up to 7,000 square feet of restaurant space. In 2018, an amendment to the PUD included approximately 6,000 square feet of retail space that would coordinate with the already-constructed adjacent outdoor activity space and amphitheater. In addition to the PUD requirements, the 2013 Lakes at Lyndale Connectivity Plan recommends that a pedestrian and visual connection between Lyndale Avenue and Richfield Lake be provided through the Property as a gateway to the adjacent outdoor activity and recreational space. There have been two proposals for developments that appeared to be consistent with the requirements, one by Benefactor Brewing in 2022 for a brewery and one by Luce Line Brewing in 2024 for a food hall. Both proposals were withdrawn, however, due in part to perceived risk associated with a Reciprocal Easement Agreement with Covenants, Conditions and Restrictions (REA). The REA states that no use shall be permitted which is inconsistent with the operation of a first-class commercial development and describes the type of uses that shall not be permitted. The parties to the REA include all of the property owners in the Lyndale Gardens redevelopment and there is varying interpretation of the terms of the REA among some of the property owners. The City is not a party to the REA. The Property Owner has marketed the Property for sale for development of retail uses, but current market conditions have created obstacles that have been difficult to overcome in generating interest for development of the desired uses. The Property Owner has received interest for multi-family housing as well as other commercial uses of the Property, including day cares, medical offices, banks, and coffee shops, some of which would propose to include a drive-thru component. Challenges associated with these uses include tax law changes that open up opportunities for day cares to be property tax exempt, and the uncertainty of how these proposed uses would coordinate with the amphitheater and other adjacent quasi-public spaces. The existing PUD approval states that approval of final site plans and other associated plans for the retail building must be submitted as a minor amendment and if the proposal varies significantly from conceptual plans, a major amendment may be required. The Property Owner will describe the efforts made to market the Property and the challenges in finding potential uses that meet the PUD requirements and is seeking feedback on whether policymakers would support an amendment to the PUD to broaden the range of commercial uses allowed on the site. DIRECTION NEEDED: Based on policymakers' consideration of the staff report and presentation, staff and the Property Owner are seeking feedback on the direction for the Lyndale Gardens retail site. Would policymakers consider: 1. Amending the Lyndale Gardens PUD to broaden the range of commercial uses allowed on the Property. If so, are there any restrictions that should be placed on the uses? 2. Upholding the PUD requirements and waiting for a retail use that would coordinate with the already-constructed adjacent outdoor activity space and amphitheater? 3. Acquiring the Property and holding it until a preferred development is feasible? If so, should staff explore options for programming the Property for public use in the interim? BACKGROUND INFORMATION: A.HISTORICAL CONTEXT The Property is located within the Lakes at Lyndale area of Richfield. Since the late 1990s, the City has identified this area for reinvestment, and redevelopment has been a priority. The mission of the 1998 Lakes at Lyndale Master Plan is to make the area Richfield's thriving urban center, by providing more housing opportunities, upgrading business properties, and providing fuller enjoyment of both Wood Lake and Richfield Lake. The Lyndale Garden Center closed its doors in 2006. The site was purchased by The Cornerstone Group in 2011 and a PUD including 151 apartments, a grocery store, 9,000 square feet of retail space, 2,600 square feet of restaurant, and an outdoor activity space was approved by the City Council in March 2013. In December 2013, the City Council approved an amendment to the PUD to allow up to 7,000 square feet of restaurant space on the Property. The Lakewinds Food Co-op opened for business in 2014 on the south half of the site. The amphitheater and other quasi-public amenities, including a connection to the Richfield Lake path, were completed in 2017. In 2018, an amendment to the overall development plan to replace the 151-unit apartment building with 30 condominiums, 8 rental townhomes, and 66 apartments was approved. This amendment also approved approximately 6,000 square feet of retail space on the Property that would coordinate with the already-constructed adjacent outdoor activity space and amphitheater. The Henley Apartments and Lakeside at Lyndale condominiums were completed in 2020. The final phase of the overall development is the retail component on the Property. Benefactor Brewing submitted a proposal to develop a microbrewery and taproom on the Property in 2021. In August 2021, the Housing and Redevelopment Authority (HRA) approved a Contract for Private Development (CPD) with Benefactor Brewing LLC which stated that the HRA would provide a forgivable loan of up to $500,000 for the development. The Planning Commission held a public hearing on Benefactor Brewing's development proposal in March 2022 and recommended approval of the project with conditions. Benefactor Brewing withdrew the proposal prior to the City Council meeting and did not execute the CPD with the HRA. Abdo Markethouse presented a concept to develop a 79-unit apartment building and a small restaurant on the Property at a joint work session of the HRA, City Council, and Planning Commission on August 21, 2023. The concept would have required a major amendment to the PUD to shift from the planned retail use on the Property to allow multifamily housing. Policy makers did not express support for amending the PUD. To incentivize redevelopment of a commercial development that serves as a destination where people can eat, shop, or gather, the HRA entered into a Memorandum of Understanding (MOU) with the Property Owner in November 2023. The MOU stated that the HRA would consider providing financial assistance of up to $500,000 toward capital costs for a development that meets several of the City and the HRA's goals for the site (as described in the attached document). The HRA held a closed work session on September 16, 2024 to discuss potentially purchasing the Property, but did not direct staff to pursue land acquisition discussions with the Property Owner. In late 2024, an affiliate of Luce Line Brewing (Luce Line) entered into a Purchase Agreement with the Property Owner and proposed to develop a food hall and taphouse on the Property. Luce Line also planned to acquire and program the amphitheater. On December 16, 2024, the HRA approved a Funding Agreement with Luce Line that would provide a $750,000 forgivable loan to facilitate land acquisition and development of the Property. On March 18, 2025, Luce Line submitted written notice that they were not proceeding with the project, citing potential legal action from neighboring property owners related to the REA; economic pressures including inflation, rising interest rates, and the uncertainty of tariffs; and the desire to focus on their existing business as the rationale. B.EQUITABLE OR STRATEGIC CONSIDERATIONS OR IMPACTS The Strategic Plan places a priority on community development and identifies a vibrant downtown as a desired outcome, by proactively marketing downtown and increasing the number of businesses. The Strategic Plan also calls for increased diversification of the tax base through commercial development. In December 2022, the HRA and City Council adopted a Spending Plan to use unobligated Tax Increment Financing (TIF) funds to specifically advance this goal. Projects receiving funding through the Spending Plan must commence before December 31, 2025. C.POLICIES (resolutions, ordinances, regulations, statutes, exc): The 2040 Comprehensive Plan (Comp Plan) guides the Lakes at Lyndale area as Mixed Use with the intent of creating a city center that would serve as a downtown. The Comp Plan states that the city center is expected to include a mix of residential (50%), shopping, recreational and business uses (50%). The 2013 Lakes at Lyndale Connectivity Plan (Connectivity Plan) provides guidance for the connections and improvements through the Lakes at Lyndale area to promote a more livable and thriving community. The Connectivity Plan recommends that a pedestrian and visual connection between Lyndale Avenue and Richfield Lake be provided through the Property as a gateway to the adjacent outdoor activity and recreational space. As part of a PUD amendment, the City Council adopted Resolution 11515 on June 26, 2018, which approved "approximately 6,000 square feet of retail space that will coordinate with the already- constructed activity areas and retail space" for the Property. The Resolution also stated that approval of final site plans, building plans, and elevations for the retail building must be submitted as a minor amendment and if the proposal varies significantly from conceptual plans, a major amendment may be required. D.CRITICAL TIMING ISSUES: The Property Owner has owned the site since 2011 and would like to move forward with disposition of the Property. E.FINANCIAL IMPACT: N/A. F.LEGAL CONSIDERATION: N/A. ALTERNATIVE(S): N/A. PRINCIPAL PARTIES EXPECTED AT MEETING: Colleen Carey, Property Owner and Terese Reiling-Holden, Colliers broker ATTACHMENTS: Description Type Location and Comprehensive Plan Map Backup Material 2018 PUD Amendment Master Site Plan Backup Material Lakes at Lyndale Connectivity Plan Excerpt Backup Material MOU Goals for Redevelopment Backup Material REA Excerpts Backup Material INTERSTATE 35W COLFAX AVE SDUPONT AVE SBRYANTAVES65TH ST WALDRICH AVE S64TH ST W MILDREDDR 63RD ST W LYN D A LE AVE S HARRIET AVEHIGHWAY 62 RAE DR NB I35W TO E B HW Y6 2 RichfieldLake ± 2040 Comprehensive Plan Designations I:\GIS\Community Development\Case Maps\2023\Lyndale Gardens Site.mxd 2040 Planned Land Use Mixed Use Community Commercial High Density Residential Medium Density Residential Low Density Residential Park Right-of-Way (ROW) Lyndale Gardens Site 0 325 650162.5 ft Lakewinds Food Co-op The HenleyApartments Lakeside at LyndaleCondominiums Amphitheaterat Lyndale Gardens Subject Property Connectivity Plan - Page 25New bicycle/pedestrian connection LakeAveNew bicycle/pedestrian connection New pedestrian/bicycle connection Garden A-2 Establishes uses (or a mix of uses) such as a restaurant, brewpub, coffee shop, retail store or experiential/activity-based business. Recognizes and elevates the site’s importance as a gateway to Richfield Lake, whose natural and recreational amenities serve as a centerpiece of the Lakes at Lyndale downtown area. Includes a well-designed building and an inviting patio space that overlooks Richfield Lake and the adjacent amphitheater. Provides visual and pedestrian connections from Lyndale Avenue to the amphitheater and the existing paths at Richfield Lake Park. Embraces Richfield’s certification as a Silver-Level Bicycle Friendly Community by the League of American Bicyclists and the site’s proximity to adjacent bicycle routes by providing ample bicycle parking for employees and guests. Activates the west and southwest portions of the property that are adjacent to the amphitheater and existing pergola-covered seating area by providing outdoor gathering spaces and including a pedestrian connection along the “dogleg” portion of the property to the Lakewinds Co-op site. Complements and builds off the existing public art in the area. This could be achieved through art installations such as murals, sculpture, an artistic gateway feature, or other forms of public art. The City of Richfield will consider adding any public art on the site to the City’s Public Art Walking Tour. EXCERPT FROM NOVEMBER 2023 MEMORANDUM OF UNDERSTANDING BETWEEN HRA AND LYNDALE GARDENS, LLC HRA FINANCIAL CONSIDERATIONS AND GOALS FOR REDEVELOPMENT OF THE LYNDALE GARDENS COMMERCIAL PARCEL The Richfield HRA will consider contributing up to $500,000 toward capital costs and providing a 50% financial match for up to four (4) Sewer Availability Charge (SAC) fees to help facilitate a commercial development on the site that serves as a destination where people can eat, shop, or gather. A project receiving financial assistance should help achieve several of the following goals for redevelopment of the site: