Hotel may finally be built in Heart of the City

Would go on remaining city-owned land

The hotel that has eluded Burnsville since it launched its Heart of the City redevelopment district may be closer than ever.

A hotel ownership group is negotiating with the city to buy the remaining 1.75 acres of what is known as the AAA property.

The land is north of the Burnsville Performing Arts Center and the adjacent city parking deck.

The PAC is a driving force behind the ownership group’s interest in building the hotel, a longtime city goal, Mayor Elizabeth Kautz said.

“It all has to do with market conditions,” she said. “People who own these hospitality enterprises always look at what the market’s going to drive. They’re interested now because the Performing Arts Center is doing exactly what it said it would do – drive business to our hotels, our restaurants and our retailers.”

City officials have seen more expansive hotel-related projects come and go in the Heart of the City but say this hotel-only project appears especially promising. They wouldn’t identify the ownership group, which has requested anonymity while negotiations continue.

If the group and city staffers reach a tentative purchase deal, it could be reviewed by the Economic Development Commission on Nov. 14 and go to the City Council, acting as the Economic Development Authority, for action on Nov. 20, Community Development Director Jenni Faulkner said.

“We’ve gotten indications from (the group) that this is something that they want to do,” Faulkner said. “Certainly, this has been a long-term vision of the city, that we have a hotel in the Heart of the City.”

The group hasn’t secured a hotel company yet, she said. But Council Member Dan Gustafson said it’s his understanding the group has been working with a company “for some time.”

Tentative plans call for a hotel of just over 100 rooms, Faulkner said.

The land is the last piece of about six acres of property, including the old AAA Minnesota/Iowa site, the city bought in 2001. Most of the land is now occupied by the PAC, the parking deck, Nicollet Commons Park and the Mediterranean Cruise restaurant. A Metropolitan Council grant paid for the PAC and park property.

A group called Spirit Mountain Land Holding came to the city in 2001 with grand plans for a $100 million development that was to include an upscale hotel, corporate training center, sculpture academy, water park, 1,200-seat fine arts theater and other features.

By fall 2004 that project had fallen through, and a group called Faulkner USA was proposing a 225-room hotel, community performing arts center and four-story mixed-use building. That plan also fell through.

In 2007, the city was moving forward with its own arts center and offered remaining city-owned land for sale on the open market.

Anderson Builders was awarded a purchase agreement for a hotel/event center/bistro as well as two office buildings and a parking structure. Anderson pulled out in 2008.

New ingredients in the mix since then are the PAC, which opened in 2009, and the Mediterranean Cruise Cafe. Kautz pointed to week-long dance competitions that have become a staple booking at the PAC. They’ve grown from four a year to 16 this year, she said.

The would-be hotel owners “see that there is a destination that draws,” she said.

“We’re very optimistic that this deal will come to fruition,” Faulkner said. “It should complement the PAC and make use of the parking and infrastructure that’s already there.”

A land purchase agreement would require that the new owners deliver on the hotel.

“They can’t buy it for speculation,” Kautz said.

Gustafson, the council’s former Economic Development Authority president, said he initiated contacts with the ownership group through former Burnsville Chamber of Commerce President Daron Van Helden, who knew the parties.

He and Van Helden met with the group last September, Gustafson said.

When he ran into the parties this spring, Gustafson said, they told him they were ready to make an offer on the land.