Hopkins Weighs Litigation Against Fifth Avenue Flats Developer

is mulling legal action against the developer of the stalled Fifth Avenue Flats project—which has already seen its share of legal action.

City Council members met with staff in a closed session Tuesday night to discuss “litigation strategy and objectives” against Doran-Pratt Development.

While details of that meeting aren’t open to the public, City Attorney Jeremy Steiner said Hopkins wants the developer to reimburse the city for legal costs—including those incurred during eminent domain proceedings and while appealing a court decision that killed the creation of a tax increment financing (TIF) district.

Steiner didn’t have an exact figure available, but he said it's in the “multiple six figures.”

Doran-Pratt did not respond to repeated requests for comment.

Hopkins created the TIF district in 2005 to redevelop a swathe of Mainstreet between Fifth and Sixth Avenues, also called “Block 64.” Doran-Pratt came in a few years later, after the initial developer fell through, and proposed building a 254-unit luxury apartment complex with 13,000 square feet of retail space.

The city embarked on condemnation proceedings against Hopkins Park Plaza and Mainstreet USA in 2008. Hopkins Park Plaza challenged the legitimacy of the TIF district. In October 2010, the Minnesota Court of Appeals found Hopkins failed to meet the legal standards for finding that the properties were “structurally substandard.” Since the city couldn’t establish the TIF district, it couldn’t seize the property.

The city only embarked upon condemnation proceedings based on the development agreement it had with Doran-Pratt, Steiner said. That agreement specifies that the company will pay legal fees, which Steiner believes covers the eminent domain and TIF actions.

Hopkins has not confronted Doran-Pratt about the costs formally, but staff members don’t think the company plans to pay them voluntarily, he said.

“They’ve walked away from the redevelopment project at this point,” Steiner said.

For now, most details remain private. Steiner promised the city would make more-specific details public later—including a timeline for when any legal action would take place.

(Click the PDFs to the right of the story to read the development agreement and its amendments, as well as the court of appeals decision on the Hopkins TIF district.)