City willing to use condemnation powers for Ivy Tower project

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April 4, 2005 // UPDATED 1:53 pm - April 26, 2007
By: Scott Russell
Scott Russell

The Ivy Tower condo/hotel redevelopment at 11th Street & 2nd Avenue South got a boost when a key City Council committee approved using condemnation powers if needed to get developers additional land.

The full Council was expected to approve the condemnation option April 1, after Skyway News' deadline.

Ivy Towers Minneapolis LLC has met key milestones, according to a March 22 memo from George Kissinger, the city's point person on the project.

According to the memo:

The partnership has preliminary financial commitments and State Historic Preservation Office approvals. It has deposited funds to cover the city's upfront legal and appraisal costs.

However, the partnership doesn't own the neighboring surface parking lot at 1101 and 1103-1/2 2nd Ave. S. - approximately 12,000 square feet of land needed for the redevelopment.

(The city has appraised the land at $1,265,000. The estimated market value of the two parcels is $695,700, according to the Hennepin County Web site.)

Ivy Tower partners Jeffrey Laux and Gary Benson plan to convert the historic Ivy Tower and adjoining land into a 136-room boutique hotel and 88 for-sale housing units, 18 affordable under city guidelines.

The development also would have 21,000 square feet of retail space, including a health club, 156-stall underground garage and skyway connections. The old building itself would get listed on the National Register of Historic Places.

"Presales have been strong," Kissinger's memo said. "Except for the acquisition of [the surface lot], the project is ready to proceed."

Ivy Towers Partnership has made a good faith effort to buy the land, Kissinger's memo said. The Hennepin County Assessor's Web site lists the owner as Frank D. Trestman, trustee, and the taxpayer as LST Properties LLP.

Under the city's redevelopment agreement with Ivy Towers LLP, if the developers could not reach an agreement to buy the surface lot, the city would get it, either by negotiated purchase or by eminent domain, Kissinger said. Ultimately, the developers will pay the acquisition cost.

The city needs to show a public purpose in order to condemn the property, Kissinger said.

The project would preserve and restore an historic structure; the Ivy Tower would be listed on the National Register of Historic Places when the project is done, he said. The project would eliminate blight and blighting influences, in this case surface parking, which is undervalued property at that location.

"Last but not least, we are providing for increased housing for the residents of Minneapolis, and that includes affordable housing," he said. "Any one of those would be sufficient [for a public purpose]. We find more than one."

The developers still might reach an agreement with the lot owners. If the city has to use eminent domain, it could take until the last half of July to acquire the land, Kissinger said in an interview.

The Council's Community Development Committee held a public hearing on the use of eminent domain March 22. No one from the public spoke.

The attorney for LST Properties did not return a phone call.