Two multi-use apartment proposals in the crosshairs at sometimes fiery council meeting

In the coming weeks and months, local officials should get a better idea on which project, Dakota Commercial's or APG Development's, has the better shot of becoming reality in Crookston.

Mike Christopherson
Crookston Times
With chairs spaced out for socially distancing purposes, some people had to stand in the council chambers Monday night

   After a sometimes fiery, sometimes tense debate that at times featured raised voices at an almost three-hour Crookston City Council and Ways & Means Committee meeting Monday night, two proposed apartment complex developments for Crookston remain in play, although the fate of both projects remains up in the air.

    Crookston residents, business owners and rental property landlords filled the council chambers in socially-distanced fashion to largely voice their concerns and complaints – there were some positive comments expressed as well – about a proposed 39-unit apartment high-rise on and next to the former American Legion property downtown, which would feature underground parking for the tenants, and, in its present form, commercial space for lease on the main floor and a relocated town square. The apartment complex itself involves around a $7 million investment on the part of the developers, and the City of Crookston would be responsible for the estimated $1.2 to $1.4 million cost to add a town square featuring an amphitheater/stage, green space and other amenities.

    The project came under heavy fire at a public hearing scheduled Monday to give people a chance to offer their feedback on the project. Around a dozen people spoke at the podium and several more people seated in the chambers applauded their various comments. The most popular concerns involve the downtown parking that would be lost if the City, as part of the proposal, gave the developers the two City-owned parking lots south of the Legion building. A contingent of stakeholders from the Crookston Eagles Club stood at the podium to speak out against the project, saying the loss of parking behind their club could lead to its closure.

    “If you take away our parking, you won’t have a club,” said Bruce Meyer. “You take away our livelihood.”

    Several detractors also questioned the wisdom of relocating town square, home to the red barn that cost more than $100,000 to construct as well as other amenities like the Rotary Club’s Peace Pole Park. The City currently has three years left on its lease on the current town square land and has 10 more years of annual lease options after that. It was suggested by several people Monday that the City could spend some of the $1 million-plus it would invest in a new town square to simply purchase the land home to the current town square. A relocated town square and all of its envisioned activities would put too many children too close to busy U.S. Highway 2 and a busy intersection downtown, several said.

    “You bring a lot of kids to that intersection, you’re going to be calling an ambulance,” Jim Borkowski said. “Some little kid is going to run out, even if they’re being watched, and something is going to happen.”

    The temperature in the chambers rose significantly when Robin Steinbrink stood at the podium to voice his concerns about the project. Steinbrink, who owns commercial property at 113 South Broadway as well as apartments on the block, said his tenants will have nowhere to park if the lots behind the South Broadway buildings are sacrificed as part of the development, and as a result his apartments won’t have enough available parking slots for his tenants as required by City code.

    “The City would put me out of business because my tenants don’t have enough parking to meet code,” Steinbrink said, raising his voice. “…You have $7 million plus another million for an amphitheater. The sky’s the limit! We have no budget, and yet you want to get rid of the ‘tajmabarn.’” (He was referring to the red barn at the current town square.) “Us taxpayers have more than $100,000 in the tajmabarn,” he continued.

    Steinbrink referred to himself and others like him – commercial and rental property owners – as “poor peasants” who are trying to fill their buildings up, but they have to compete against “Mr. CHEDA.”

    “Fair enough?” Steinbrink said. “And you want businesses to come to Crookston and I gotta fight with you people?”

    Others who spoke at the hearing questioned the need for new commercial space when other existing downtown commercial spaces are available and on the north end of town recently constructed retail centers/strip malls still have multiple spaces available to lease.

Bob Prudhomme speaks out against the proposed downtown Crookston multi-use apartment project.

    Some other comments from Monday’s meeting include:

    • Longtime Woods Addition resident Pat Thomas said the last place she’d want to live is a new apartment building where you “sit on the balcony and listen to semis go through town all day.” Thomas, citing the COVID-19 pandemic and resulting multi-billion dollar state deficit, said the City should be especially cautious when investing money now, because the state could reduce its Local Government Aid allocation to Crookston in order to tackle its deficit.

    • Bob Prudhomme, Borkowski and other Crookston Farmers Market stakeholders said they’d prefer to keep their market at the red barn, where there is a roof and shade, which is required by statute.

    • Shirley Iverson, speaking on behalf of the Downtown Crookston Development Partnership, said DCDP leadership met earlier on Monday to formulate its positions in regard to the parameters of the proposed project. She noted that, with a grant, the DCDP commissioned JLG Architect’s previous study and formulation of a Downtown Crookston Master Plan, which included a relocated town square and construction of a high-rise apartment building. But just because the DCDP paid for the plan, it doesn’t mean the DCDP embraced everything it recommended.

    “We didn’t totally agree with what JLG came up with, and the council didn’t entirely agree, either,” Iverson said. “The downtown plan wasn’t wholeheartedly endorsed.”

    She added that the DCDP endorses a downtown housing structure, whether its a rental unit or condominiums. The DCPD formed no consensus on the main-floor commercial space included in the project, Iverson continued, nor is there a DCDP consensus on a relocated town square. The DCDP does agree that additional exterior parking is necessary “for the good of the community and the project itself.” Iverson added that, “For $1 million, the City could buy the current town square land and make it pretty magnificent.”

    • Developer and local commercial and rental property owner Jeff Evers, who’s redeveloping the Fournet building, questioned the need for additional commercial space, noting he has several thousand square feet of commercial space in Crookston currently available for lease. But as an apartment landlord, even though the proposed downtown project would present more competition for him, Evers said he’s in favor of a new apartment building, even if he thinks the town square and parking issues need much more examination.

    “I have apartments and I’m saying go for it,” he said. “It’s competition for me, but it’s not always about yourself.”

    • Prairie Skyline Foundation Director Kay Hegge, noting the mentions of a potential “community center” space on the main floor of the proposed development, reminded everyone that PSF’s restoration project at the old Cathedral on Ash Street downtown envisions a community center already, focused on youth and art and outdoor and indoor activities all year long.

    “If you have $1 million, put it toward the Cathedral and it’s done,” Hegge said. “You have your tourist attraction downtown.”

    • Dan Svedarsky, retired longtime faculty member at UMN Crookston and onetime director of sustainability there, noted that the future of communities and especially downtowns is that they are “walkable.”

    “I’ve seen a lot of UMC faculty and staff come and go, and many of them would like to live in a higher-end condo or apartment in the core of the community and not have to drive that much,” Svedarsky said. “They look and we don’t have that, so they go to Grand Forks and take their dollars with them.”

    • David Goosen said locally driven projects should be supported first. “People come from outside of town with ideas on how to make quick money,” he said. “We should take care of our own people first who live and invest here already.”

    The project, proposed by Dakota Commercial in partnership with Community Contractors and JLG Architects, who have done similar projects in Grand Forks, East Grand Forks and throughout the region and also previous projects in Crookston, would require the City to rent out the approximately 7,500 square feet of commercial space on the main floor. If there were no takers, the City would be responsible for the lease payments. That, too, raised red flags among several who commented Monday night.

    Craig Tweten, speaking on behalf of the developers, spent several moments at the podium highlighting the positives of the proposed project and the positive impact it would have on downtown, but he was interrupted more than once by people in the audience who said Crookston was not like the other, often larger cities that Tweten and his partners have done similar projects in.

    Still, Tweten said, the project would be a real gem for downtown and the whole community, and that even with the pandemic, now might be the opportune time to be bold.

    “It’s the opinion of a lot of people to not do things, but maybe the opinion is it’s the right time,” he said. “We want to get things going again, to change things and bring something nice together for you, for the community to have, and downtown is the right place to build these days.”

    But, Tweten added, “We’ll go away and be done if you don’t want to do this.”

    After the hearing and during the council’s subsequent Ways & Means Committee meeting, council members and Mayor Dale Stainbrook voiced their general support specifically for the apartment building portion of the project, but they appeared to back away from a new town square being part of the development and instead wondered if the development could instead provide more parking, or at least take less parking away than the current project does. Some council members also wondered if having the main floor commercial space was a make-or-break part of the project, and suggested that a couple more apartments be added to the building instead.

    CHEDA Executive Director Craig Hoiseth, who worked closely with Tweten and his partners for months before concluding earlier this summer that the proposal needed to be handed off to the council for consideration, said it’s his understanding that a “green space” needs to be part of the project. But, he added, he doesn’t think it has to be a full town square and could possibly just be some nice grass and maybe some trees and foliage, which would obviously cost the City much less than $1.2 to $1.4 million to make happen.

    “I think $50,000 for grass is probably more palatable than a million for a new square,” Hoiseth said.

    A wildcard remains on the parking front as well. With Tri-Valley Opportunity Council poised to soon move from their current headquarters at the corner of Robert Street and Broadway to the rehabilitated Fournet building across the street, the Tri-Valley Board of Directors has previously stated that they’d be willing to consider the community’s “best interests” when it comes to the fate of the building they’re vacating. If no buyer came forward to continue to use the building, it’s possible Tri-Valley could convey it to the City at a bargain rate, the City would demolish the building, and then the Minnesota Department of Transportation would reconfigure what is downtown Crookston’s most dangerous corner for pedestrians and most difficult to navigate for semi tractor-trailers. As part of that project, it’s likely that several new parking slots could be added to Tri-Valley’s current lot.

    The discussion wrapped up with the council, mayor and Hoiseth concluding that Tweten and his partners will be approached about ways their proposed development could potentially be tweaked, or possibly more than tweaked. Everyone seemed to agree that, even with the recent opening of the popular Meadows Apartments next to Drafts and Crookston Sports Center, Crookston is still lacking new, market-rate apartments that professionals working in Crookston want but can’t find here.    “I realize we have to deal with parking, and if we fix that issue, I think it changes the tone of the discussion on this,” Hoiseth said. “I will be interested in (Tweten’s) take on tonight’s meeting.”

Another apartment development re-emerges

    Also Monday night, another apartment building development with parking garages and a potential main floor commercial space that appeared for a time last year to be full steam ahead further north in Crookston, on the east side of North Broadway south of Fisher Avenue and Casey’s General Store, re-emerged.

    Elliot Steinbrink, of APG Development of West Fargo, after addressing the council and debating for around an hour what transpired and didn’t transpire with his firm’s proposed project last summer and fall, left open the possibility that he and his partners would be able to convince their investors to move ahead with the project on Crookston’s north end after all. He said he’d likely know either way in the coming weeks and would get back to the council with updates.

    Steinbrink, a Crookston native and Robin Steinbrink’s son, first pitched his firm’s proposal early in the summer of 2019 to the City Planning Commission, after approaching Hoiseth with the parameters in the spring. The plan would be two construct two buildings on the property in an L configuration, with the building proposed to have main floor commercial space facing North Broadway. One would be constructed first with approximately 36 units, and, assuming it eventually had a strong occupancy rate, the similarly sized second building, featuring the main floor commercial space, would then be built. There would be a single-vehicle garage available for each unit. Steinbrink told the Times the commercial space would be envisioned as something that increased traffic to the building and area, but not dramatically. “Like a coffee shop, or a sandwich shop, maybe,” he said Tuesday.

    Steinbrink and a partner at APG, Nick Waverek, needed a variance for reduced setbacks for the garages as well as the apartment balconies The Planning Commission in July approved those variances and work began on a purchase agreement that would have APG buy the parcel, owned by CHEDA, for $90,000. But, Steinbrink told the Times, in his view the purchase agreement took too long to come together in order for ground to be broken in 2019.

    And then, a glitch. As part of the development, APG sought a two-year tax abatement. Apparently unbeknownst to everyone involved, that constituted a “business subsidy agreement,” which also required approval by the Planning Commission and then the city council. In addition, the City’s updated comprehensive plan approved a few years ago required that various proposed developments fit land-use parameters detailed in the comprehensive plan. That, too required the commission to sign off on the project incorporating appropriate land use.

    The second round of required approvals made it impossible for APG to meet its initial goal of breaking ground by Aug. 1, 2019. (But, in addition, Steinbrink reiterated to the Times, the purchase agreement wasn’t ready to be executed until Aug. 30.)

    Still, the second round of approvals were secured, with the council on Sept. 23, 2019 green-lighting the project. All that was left was to execute the purchase agreement, and Hoiseth and Steinbrink, who discussed last year’s timeline and chain of events in detail Monday, agreed that Hoiseth had indicated the agreement could be executed as soon as Sept. 24, or whenever APG was ready.

    But by then, driven by concerns of pouring concrete in colder weather, the development was put off. Hoiseth reported to the CHEDA Board at its September 2019 meeting that APG would likely not be breaking ground in 2019 and that moving dirt in the spring of 2020 seemed more likely. A month later, at the CHEDA Board’s October meeting, Hoiseth updated his board, saying APG had “backed away” from the project, at least until the spring of 2020 but possibly beyond that.

    The Times published stories on both of the APG-related CHEDA Board discussions and Hoiseth’s comments on the matter. Steinbrink said he asked to speak to the council Monday because he didn’t agree with the notion that APG had backed off or walked away from the project. He said his firm put in considerable time, effort and financial resources to make the development a reality. Although he was able to attend the second Planning Commission meeting at which the second round of approvals were secured, Steinbrink said he was unable to attend the Sept. 23 council meeting at which the final approvals were secured. From that point on, he said he never heard from anyone from the CHEDA or the City again, until he reached out to Interim City Administrator Angel Weasner in February 2020 when Dakota Commercial’s multi-use apartment building proposal in downtown Crookston emerged publicly.

    “The intention of my phone call in February was to point-blank ask Angel if my project was being slow-walked in order to get the downtown project,” Steinbrink told the Times when reached by phone Tuesday. Steinbrink noted that CHEDA and not the City owned the property on which APG wanted to put its development, and that it was his understanding that among the council approvals that September was the purchase agreement. After that, it just needed to be officially executed so the property could change hands.

    The Times reached out to Hoiseth Tuesday, wondering why, even though construction on the project had already been scrapped for 2019, someone didn’t communicate with Steinbrink and APG that all of the approvals were in place and that the purchase agreement was ready to be executed.

    “Could I have called Elliot and Nick on (September 24) and said, ‘Great news, all of the approvals are done!’  Sure I could have, maybe I should have,” Hoiseth responded via email. “But (Steinbrink) had already stated there would be no development in 2019. If I should have poured more salt in the wound we can all debate. As stated in the CHEDA minutes, ‘We need to all do better.’  I'll take my portion of the responsibility.”

    Several council members and the mayor wanted to know Monday night who “dropped the ball” on the project. Although the question was never specifically answered, Steinbrink suggested in his remarks that there was a willingness to work with developers and even expedite projects like the Meadows Apartments and Dakota Commercial’s multi-use apartment proposal for downtown, but that APG’s desire to invest in Crookston seemed to be stymied from the get-go.

    Responding to Steinbrink’s concerns about his perceived struggle to make APG’s project a reality in Crookston, council members Bobby Baird and Dylane Klatt both wondered why the comprehensive plan came into “play” with the APG project but not other projects proposed on City property, which necessitated additional approvals by the Planning Commission and council.

    “That’s the question we need to answer. Why do some (projects) go through with no problems and (Steinbrink) is out $25,000?” Klatt said. (Steinbrink said he lost $25,000 on the project, mostly from the cost of soil borings.) “Do we need an investigation?” Klatt added. “It’s embarrassing.”

    “Basically, when the council approved all of this, you weren’t given a heads-up,” Stainbrook added. “Why didn’t Hoiseth say you were given the go-ahead?”

    Hoiseth, stressing that he agreed 100% with the timeline and chain of events detailed by Steinbrink, also stressed that the second round of required approvals led to the derailment of the project for 2019, as far as breaking ground went, but it didn’t kill the project forever. He said previous city’s attorney had not brought up the statutory requirement in regard to business subsidy agreements, nor had previous counsel made it known that the still relatively new comprehensive plan included land-use language that required Planning Commission and council approval to confirm that various projects fit within the parameters of the comprehensive plan. When Charles “Corky” Reynolds came on as city attorney, Hoiseth said he was being especially thorough and cautious as he provided legal guidance to the City on various fronts, and that it was Reynolds who first realized that a tax abatement amounted to a business subsidy agreement that was impacted by state statute, and that the comprehensive plan had a required land-use component as well.

    “This was the very first time that all of these land use, business subsidy (and) public hearings were all implemented for the City of Crookston. Neither (previous city’s attorney) Chuck (Fitzgerald) or Stephen (Larson) had us go there, but Corky did,” Hoiseth told the Times in an email Tuesday. “I give Corky credit for digging it all out that the Comp Plan drove certain statutes, but it was all new to everybody, and caused some unfortunate delays. APG felt the brunt of it. They became frustrated with the process, and who can blame them? I get it, and I am going to take the brunt of the frustration. It comes with the job as a primary contact with the customer.”

    Steinbrink told the Times Tuesday that since Monday night’s meeting he’d put calls in with around 75% of the investors he’d worked with previously on the North Broadway development to see if they still have an interest in pursuing it, given the context of what had transpired since last summer, leading up to Monday night’s discussion. Steinbrink said he will be updating Weasner as needed, and she can update the council.

    Some council members were apologetic to Steinbrink for what had transpired with APG’s proposal, and, spurred by Jake Fee and Joe Kresl, expressed an openness to sweeten the pot, so to speak, by possibly adding to the length of APG’s original tax abatement request, from two years to three.

    Reynolds said that was the council’s prerogative, but, he explained, changing the tax abatement parameters would amount to changing the business subsidy agreement, which would require another round of Planning Commission and council approvals. The project in its current form, Reynolds said, has secured all of the approvals it needs and would require no further council action, other than possibly updating some dates. The purchase agreement would still need to be executed.

    As the benefits and/or concerns surrounding both development proposals were debated as the clock approached 10 p.m. Monday night, Hoiseth stressed to the council that only one project should emerge as the one that actually gets done, if one actually emerges eventually. While the updated housing study for Crookston indicates the community is still around 40 units short when it comes to the available stock of newer, market-rate apartments, he explained, adding two developments with around twice that many units would overly saturate the local rental market.