STEVE SCOTT, Pioneer Press
November 29, 2006

Developers have pulled out of one of the Twin Cities' largest redevelopment projects, leaving nearly 280 acres of unturned earth and an unclear future for the Twin Lakes area of northwestern Roseville.

Rottlund Homes and Roseville Properties told city officials Monday that they were pulling the plug on a redevelopment contract they signed 17 months ago and withdrawing all proposed project revisions under consideration. "It certainly appears this redevelopment agreement is finished. The whole thing is off the table," Roseville Mayor Craig Klausing said.

The first phase of the project would have built housing, retail and office space on 80 acres of the Twin Lakes site, which consists largely of abandoned truck terminals near Interstate 35W.

But that project derailed in August, when the Minnesota Court of Appeals sided with a citizens group's contention that the project was void because the approval process was flawed and more environmental review was necessary.

Despite recent mayoral and City Council election results that would have seemed to favor the developers, and a recent scaled-back proposal to remove a big-box retailer from the first phase, the developers appeared to say Monday that they'd had enough after nearly four years of vocal opposition from council members Amy Ihlan and Tom Kough and the citizens group, Friends of Twin Lakes.

"The prospect of additional litigation ... and continued opposition from Ihlan and Kough were factors in our decision to withdraw from the project," Roseville Properties said in a written statement.

The statement indicated that delays had "moved the project timing from one of the healthiest real estate markets in years to the current slump," making the project no longer viable.

"I don't think this means development is over in the Twin Lakes area, far from it," Ihlan said. "But it's an opportunity for the city to proactively plan and try to build community support for something that will benefit the community.

"I'd really like to start with a community planning process to gather ideas. Then we can go out and say, 'Here's a plan we envision,' call for proposals and see what role the city can play in pulling those plans together."

A host of complicated questions dogged the project from the outset, and many remain.

The largest landowner in the area is Roseville Properties' Daniel Commers, one of the developers who pulled out Monday. The city owns no land in Twin Lakes, though it had started condemnation proceedings to acquire at least five properties to allow the project to go forward.

"We don't know what this means for the city as far as those obligations," interim City Manager Chris Miller said. "Those are some areas we're going to have to look at to see where it leaves the city in this whole process."

At least one landowner sued the city last year for damages "resulting from the cloud of condemnation" hanging over its business.

Opponents of Twin Lakes argued against increased traffic in the area, the disruption of natural areas surrounding Langton Lake, a glut of retailing in the city, and the proposed use of tax increment financing, in which anticipated higher tax revenues from the redeveloped property would be used to pay for site improvements for up to 25 years.

The 3-2 City Council majority that consistently voted in favor of Twin Lakes believed the plan was the best way to clean up a blighted area that has been the focal point of city deliberations for nearly two decades.

"Obviously, I'm disappointed," Klausing said. "We thought this represented our best chance to redevelop the area in a comprehensive way and not have developers come in and cherry-pick the easiest areas to redevelop and leave other areas undeveloped.

"We don't know yet what the full impact of this will be."

Copyright 2006 Saint Paul Pioneer