Village Creek Redevelopment

BEARD GROUP LEADS $50 MILLION VILLAGE CREEK REDEVELOPMENT IN BROOKLYN PARK
By Liz Wolf

When it comes to redevelopment, sometimes you just have to start completely over.

That’s what the city of Brooklyn Park concluded when it came to tackling a major redevelopment of 27 acres in one of the cities most challenging neighborhoods, located along Brooklyn Boulevard and Zane Avenue North. The site sits within the city’s 134-acre Village Creek redevelopment district.

Once a prime commercial corridor, the area became blighted with obsolete, rundown properties. City officials decided it was time to change its image and set out to develop a new vision.

“It no longer met the community’s needs, “says Jason Aarsvold, project manager in Brooklyn Park’s economic development department. “There were over 400,000 square feet of retail space that just couldn’t be supported. We had perpetual vacant buildings and a lot of disinvestment.”

City officials’ object was to recreate the area into a pedestrian-friendly neighborhood, which meant a large- scale investment to acquire and raze old buildings. The city was aggressive in acquiring properties; there were 10 in all. The largest was the 200,000-square-foot Village North Shopping Center,

“It’s been challenging,” Aarsvold says. “You have this land-use pattern that just doesn’t work, and the only way to change it is to take out all of the buildings and start from scratch. That’s very difficult.”

The City’s vision was to develop this new neighborhood with owner-occupied housing, neighborhood retail, service and office and make it all connectable and walkable. Also, Shingle Creek runs through the redevelopment area, and the city wanted to restore the creek from a “channelized ditch” into a park and water amenity featuring ponds, wetlands, trails, gardens, and native plantings.

After a couple of developers failed to execute redevelopment plans-in stepped Hopkins-based The Beard Group, Inc. as the project’s master developer. The Beard Group is teaming up with Ryland Homes of Minnesota on the ambitious, $50 million mixed-use Village Creek project.

“We got involved in Village Creek in January 2005” says Bill Beard, president of The Beard Group. They closed on the land in October and started construction soon after. “That’s light speed for a redevelopment of this magnitude,” he says. The Brooklyn Park Economic Development Authority financed much of the project’s acquisition, demolition and site work and sold the land to The Beard Group at market rate. In turn, Beard sold land to Ryland for the townhome portion.

“Like most development deals, we got involved as the second, third or fourth person through the door.” Beard explains “most times in redevelopment, things don’t usually get done with the first one through the door. There are a lot of reasons for that. Probably the biggest one is expectations of what the community wants, what a developer can deliver and what the market will accept don’t all line up, and you really have to get an alignment of those three things before redevelopment takes place.”

After much work, the city, developer and nearby neighborhoods created that alignment and plans for Village Creek were devised. They include two four-story condominium buildings with retail on the first level and 49 lofts in each building; a two-story building will feature restaurants, shops and office space; Ryland’s 73 urban-style townhomes and 74 two-story townhomes; and a central park along Shingle Creek.

The project will mean a significant new tax base for the city. “We estimate about $44 million of market value will be created,” Aarsvold says. “That’s probably seven or eight times greater than the previous conditions.”

The townhomes are under way. “We’ve got about 20 townhomes under construction at Village Creek, “says Wayne Soojian, Ryland Homes’ Twin Cities Division president. “They’ve been very well-received. Sales are brisk. We have a couple of dozen contracts already, and the model home is not yet complete… We’re appealing to a price point in the low $200,000s.”

Restoration of Shingle Creek and development of the new park also are under way. The projects next phase will be the retail/office building, which should be under construction this summer. Beard says a total of 60,000 square feet of office and retail are planned. Colliers Turley Martin Tucker is handling leasing.

Development of the condominium buildings will be another year out. “You have to reach a critical mass before people really buy into it,” Beards explains. “It’s really important for the success of this whole project that we’re able to have Ryland have the majority of their product in place and sold and the creek working for us to then bring people here and start to sell the loft condos.”

One factor unique to the redevelopment is The Beard Group acquired the city’s Schilling Park on the site and is developing that land, and in turn, is creating a new, linear park that runs along Shingle Creek for about a half of a mile. The park will feature an amphitheater, plaza, art walk and gardens and connect to Shingle Creek trail system.

“The project was complicated by the idea that we were taking a park that the city owned and giving them a park back, “Beard says.

There have been other challenges. “The biggest challenges in all redevelopment are the economics associated with it,” Beard explains. “In all redevelopment, you take something of value and throw it in the dumpster and start again. And that thing you threw in the dumpster has some worth to somebody. In this particular case, it was also an expensive acquisition (with some condemnation involved), and there were some environmental costs associated with it. A petroleum leak at a former Amoco on the site increased cleanup costs. This isn’t one of those deals where we got the land for a $1. We paid fair market value.

Beard says another challenge is that the area has been in distress. “We’re trying to be that moment of sea change to where it tips over and moves from a problem area with deteriorating property values – all the things you talk about with blight – and tip it and move it and put it into a positive direction.

“We look at this and get excited because it’s there and parts are completed, but the truth it it’s an evolving process,” Beard adds. “Somebody is buying that first home and the 8th home. We’re creating a full, new neighborhood with a park, walkways, new buildings retail, coffee shop, restaurants. It has to evolve quickly and reach a critical mass for it to actually work. Those are always the biggest challenges in redevelopment.”

Beard also says convincing suburban communities to move forward with the new urbanism concept can be difficult. “You go into a suburban community and start to talk about new urbanism, and everything is backward from what they’ve seen,” he says. “Instead of building being set back from the street and parking in front, they’re right up to the street and parking is in the back. Everything we are doing is 180 degrees different from what they are used to seeing. We’re looking at non traditional densities. We’re taking them in a completely different direction. That’s difficult and challenging.”

Beard credits that city’s efforts in getting the redevelopment off the ground. “We love it when the city has done the kind of things that Brooklyn Park has done,” he says. “ They went through a visionary exercise and started to put pen to paper and did a great job expressing their ideas. We then take that, and feel it’s our job as a developer to bring a market value to that and make it real products.”