City council OKs concept plan for Wayzata Blu condo development

Lake Street project will come back for general plan and design review

A concept design for Wayzata Blu, a condo development proposed for the northwest corner of Lake Street and Barry Avenue in downtown Wayzata. (Design rendering submitted by Gatehouse Properties)
A concept design for Wayzata Blu, a condo development proposed for the northwest corner of Lake Street and Barry Avenue in downtown Wayzata. (Design rendering submitted by Gatehouse Properties)

The Wayzata City Council has approved a rezoning and concept plan for a Lake Street condo development.

The project, called Wayzata Blu, is a three-story mixed-use building with 17 residential condominium units. Minneapolis-based ESG Architects is the building’s designer.

Construction of the development would call for the demolition of the existing commercial buildings at 259, 269 and 275 Lake Street and 339 Barry Avenue, which are currently home to Barbers Inn, Candlelight Floral and Judd Frost Clothiers.

All three long-running Wayzata businesses are in the process of finding another location to continue operating in the city.

The applicant for the project, Gatehouse Properties, has a purchase agreement with the two owners of the properties, Flagship Financial and Theodore T. Asao et al Trustees.

Up for consideration at the Feb. 21 Wayzata City Council meeting were two items: Rezoning from C-4A, which is limited central business district, to planned unit development and a planned unit development concept plan of development.

The city’s planning commission reviewed the development application at its Jan. 18 meeting. Based on discussions and feedback, David Carlson of Gatehouse Properties, told the city he would be open to including flexibility in the PUD to allow retail uses on the ground floor of the development. The proposed plans include office and residential uses on the ground floor, but the PUD would allow for retail uses in the near or long term.

“If retail exploded and that became more valuable, then economics would call for the adjustment, but we don’t what the future holds. I’m providing some flexibility,” Carlson said.

Also introduced into the conversation was a potential agreement for a future easement to Wayzata for a public parking structure.

Carlson also noted that he was working with the Asao family, who operated a drug store at the site, to create a public space at the development in honor of the family.

“It has not been designed, but we are committed to it. … What I envision in that area is a public open space with landscaping, benches and some sort of memorial,” Carlson said.

The concept plans include office space on the ground floor, along with two residential condominiums. The upper levels of the building would include 15 residential condominiums, ranging in price from $589,000 to about $2.8 million. The proposed building also includes 34 enclosed parking spaces for the building residents with a rear 85-stall parking lot to meet a parking easement used by the Boatworks building.

In the request to rezone from C-4A to planned unit development, two deviations are required. The proposed building is 35 feet tall, which exceeds the building height requirement of 30 feet, or two stories, whichever is less. Secondly, the C-4A district requires that at least 50 percent of the building frontage on the Lake Street ground level must be used for retail or service commercial uses.

Jeff Thomson, Wayzata’s director of planning and building, also noted that all PUDs must be consistent with the city’s comprehensive plan, which encourages a mix of commercial, office and residential uses within the central businesses district.

Discussion

The state of retail in Wayzata continues to be a talking point tied to the Wayzata Blu development. The proposed building site has long been a retail corner that’s included a barber shop for 45 years, a floral shop that’s operated for more than 50 years and a men’s clothing store that has served customers for more than 23 years.

Mayor Ken Willcox said the city’s high property values equal high rents for retailers.

“Ma-and-pa little stores can’t survive in that kind of environment. … We’ve been fighting it and fighting and fighting it and we don’t want to lose the vitality of downtown,” Willcox said.

Wayzata resident Judy Starkey, a former member of the Wayzata Heritage Preservation Board, suggested at the meeting that the city purchase the buildings and lease them out.

“The corner of Barry and Lake is very historic,” she said, referencing the 269 Lake Street building’s history as the city’s first apothecary.

Council member Dan Koch contended that the city buying the properties would not be a financially viable move for the city.

“As fiscal stewards of the city, it’s a tough one,” Koch said.

Koch, pointing to the successful relocation of the historic Wise house in 2015, asked the developer if there had been any discussion of relocating any of the properties.

Carlson said if the project was ultimately approved, he would list the properties for free.

“If there’s a taker out there, that would be fine,” Carlson said.

Koch said he was generally supportive of the project, but had concerns for the businesses that would be displaced.

“They’re great businesses and I don’t want the city to lose them. I also am realistic about the economics of it. … To require retail on this site, I don’t know if that makes sense, especially when we have so much vacant retail in town. And so, I don’t know if we want to force that. I’d love to preserve the option of keeping that retail as a potential in this building and I think the applicant has done that,” Koch said.

Councilmember Steve Tyacke said he was also generally supportive of the application and too hoped the businesses would find continued success in the city.

“I am concerned about the loss of the retail businesses, but I think with an orderly transition, those businesses can hopefully find other spots and survive in our economy and with our property values in Wayzata,” Tyacke said.

Councilmember Alex Plechash was also in favor of the project moving forward.

“I think it’s a good plan that seems to put in there the compromises that are offered to give us the ability to work with the comp plan and the zoning, and I really don’t see any other option except to go ahead and approve this,” Plechash said.

Councilmember Johanna McCarthy, expressing concern for the future of retail in the city, directed city staff  members to explore ways – such as tax abatements or incentive programs – to help offset the financial difficulties felt by smaller retail operations.

“How can we get creative to allow for development, but also to not lose our retail at the same time – that we can continue to have the mom-and-pop shops and not the big-box stores and continue to keep that vibrancy that we’re looking for,” McCarthy said, adding that she would only be supportive of the project if it included retail space on the ground floor.

Willcox also voiced concern for such a large change to the commercial corner.

“It’s kind of a heart and soul of Wayzata as we’ve known it, and to lose that character is painful – so that’s on one side. On the other side, we’ve got economics that are driving this, and driving every property along Lake Street, to look something like this. … I’m concerned that we’re just getting too many buildings that look like this along Lake Street without injecting anything vibrant into the community in the process. It is developing a property which needs redevelopment, but on the other hand, I don’t know what the alternative development would be,” Willcox said.

On a 3-2 vote, with Willcox and McCarthy voting no, the council approved the concept plan and the rezoning to PUD.

With the concept plan approved, general plans and design review will go before the planning commission and city council once they are submitted by the developer.

Approval of the concept plan does not bind the city to approval of the general plan, which will have to come before the council within the next six months.

Contact Jason Jenkins at [email protected]