Million-dollar townhomes slated for Fuji-Ya site

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November 1, 2004 // UPDATED 4:32 pm - April 25, 2007
By: Scott Russell
Scott Russell

Historic preservation hurdles remain

A plan to convert the old Fuji-Ya restaurant site along the Downtown riverfront into 15 to 18 townhomes is taking shape but still faces several hurdles, including the preservation of historic underground mill ruins.

The Minneapolis Park and Recreation Board owns the land and is negotiating to sell it to Jeff Arundel of Columbia Mills Development for $2.5 million according to an Oct. 13 staff memo. Assistant Superintendent Don Siggelkow said the money would go into the Park Board's land acquisition fund.

The site offers a prime riverfront view overlooking the Stone Arch Bridge and St. Anthony Falls. It is located between West River Road and 1st Street South, on the river side of RiverWest Apartments (which are being converted to condos).

Arundel presented a very tentative design at the Board's Oct. 20 meeting. The townhomes would stay under RiverWest's sightlines, he said.

According to a Park Board memo, Arundel plans to build units averaging 3,200 square feet, anticipating a median sale price of $1.5 million.

The Board's Administration and Finance Committee will vote on the sale Wednesday, Nov. 3, and the full Board will vote Nov. 17. A land sale requires a supermajority of six of nine votes.

The Park Board acquired the Fuji Ya property in the late-1980s part of the West River Road expansion, a Park Board memo said. The Board needed the Fuji Ya parking lot, not the restaurant, but was forced to condemn both. That requirement added $3 million in unanticipated public costs.

A $2.5 million sale to Columbia Mills Developers would largely offset those costs. Shenehon Company, a land appraiser, valued the land at between $2.35 million and $2.75 million, Siggelkow said. Deducting $400,000 for the problems caused by underground mill ruins, tunnels and soil issues put the net value at $1.95 million to $2.35 million.

Engineers and architects say the restaurant building is not reusable and should be demolished. The building has stood vacant more than a decade. It is not part of the nearby Mill Ruins Park but sits on top of the old Columbia Mill that occupied the site from 1882 to 1941.

The Park Board issued a request for proposals to redevelop the site and last year selected Arundel (under the parent company name Lucky Club) from among three proposals. Tim Oskey, who also works for Loring Corners, is the development's chief operating officer.


The city's Heritage Preservation Commission and the State Historic Preservation Office (SHPO) would review the project. It would need to get various city approvals, just as would any other development.

Board Commissioner Carol Kummer questioned whether the project could move forward, given the historic preservation problems Crown Hydro faced when it proposed building a hydroelectric plant on the site of an old mill ruin.

"They did not want one item disturbed," she said of historic preservation officials.

Kummer asked why the site was not incorporated into the park. Commissioner Annie Young said she had concerns about selling any parkland.

Assistant Superintendent Michael Schmidt said the Board was forced to buy this particular parcel, a parcel it did not want. "It is a burden to us, not a benefit," he said.

In the event the historic preservation issues prevent development, the purchase agreement has an escape clause that allows Arundel out of the deal.

The Park Board also has an option for a 99-year lease on the space below the townhomes, which could provide parking for park users entering off West River Road, a staff memo said. The Park Board would lower the sale price by $750,000 for the lease, under a tentative proposal.

Siggelkow said a 60-space parking area could generate $55,000 a year.

The new parking could replace the projected loss of the 36-stall lot between West River Road and the river, upstream from the St. Anthony Falls Lock and Dam. The Park Board eventually plans to reopen the headrace canal that fed the old mill district, and it would eliminate the existing lot.