Developer Plans Retail Project at Old BP Site

Just five months after council members at the old Blake Road BP site, Hopkins has a retail proposal for the property much more to the city’s liking.

“I hate to say I told you so to that attorney that came to the (June) rezoning,” said Kersten Elverum, Hopkins’ director of economic development and planning.

Elverum’s comments Tuesday refer to dire warnings from a maX It Pawn broker who predicted the site at 525 Blake Road North would sit vacant for at least five years after the council members refused to allow pawnshops on the property. Owner Mark Smith slammed the council for choosing a “hope and a dream” over a real project and warned there is “no magic pixie dust” for a site that has proven difficult to redevelop.

But now Minnetonka-based Solomon Real Estate Group wants to build two 6,500-square-foot retail buildings. The project would not require rezoning and would better fit the city’s intent to bring in businesses that both capitalize on Highway 7’s heavy traffic and provide services to nearby residents.

Because the project is still in its beginnings, Solomon doesn’t yet have any tenants lined up, said Steve Johnson, the company’s development partner. But he added that he expects retail businesses and a “fast casual restaurant.”

Noodles & Co. has expressed interest in the site, Johnson said. Although is not interested because it already has a location in downtown Hopkins, the property would also be a good fit for a Potbelly or similar restaurant.

“I could fill that whole thing up with restaurants in the blink of an eye, but you run out of parking,” said Johnson, who added that he’s getting calls every other day about the site. “I haven’t had this in a long time where I get three to four users bidding.”

Lots of work ahead

The project won’t be a straightforward one, though. It involves three pieces of property: the BP site, a sliver of land owned by Cambridge Towers and a property owned by the Minnesota Department of Transportation.

Solomon would swap land for the Cambridge Towers sliver. MnDOT also must approve the sale of its property. In order to avoid a public bid, the state agency must first transfer the land to the city, which would immediately turn around and sell it to Solomon—a measure called a “simultaneous close.”

Such actions are not unheard of, but approval takes time. Johnson said a MnDOT official estimated he had about 80 requests on his desk now. Approval could take a year.

“It’s a very lengthy process to get though the MnDOT hurdles right now—primarily because they’re short staffed,” Johnson said.

Meanwhile, Solomon also wouldn’t be buying the property outright. It is buying the note on the property from the lender that holds the mortgage, giving Solomon the ability to foreclose upon an owner who is deep in arrears.

Solomon closes on the sale Dec. 12. The company will then negotiate with the owner to acquire the property—a process called “deed in lieu of foreclosure.” If that fails, Solomon would embark on foreclosure proceedings that Johnson estimated could take up to six months.

He hopes to start construction in July.

The immediate need, he said, is to get the MnDOT process rolling—something council quickly agreed to do. Solomon will pay for the required appraisals and survey, and the city will not be on the hook if the deal falls through.

“I can’t see any reason to wait on starting the MnDOT (process),” Councilman Bruce Rowan said.

Council members liked past work that Solomon showcased at Tuesday’s work session—developments that included Windsor Plaza and Fountain Place in Eden Prairie.

“Something like what you have there would really make a nice sale as you’re coming into the area,” Councilman Rick Brausen said.