Previous developer pulls out
One developer’s exit hasn’t sunk prospects for a long-sought hotel in Burnsville’s Heart of the City.
A new developer has stepped in to replace Akota Hospitality LLC, which pulled out of a proposed deal to buy 1.75 acres of city-owned property and build a Hilton Garden Inn.
The new developer, NLD Holdings III LLC, also plans to build a Hilton Garden Inn. The investor group has built hotels and retail centers in Minnesota and nationally, said Skip Nienhaus, Burnsville’s economic development coordinator.
Under terms of a proposed purchase agreement and redevelopment contract with the city, the six-story, 100-unit hotel would include a restaurant, conference rooms, fitness center, indoor pool and 55 on-site parking stalls.
The City Council, acting as the Economic Development Authority, is scheduled to vote on the agreement and contract Nov. 19, Nienhaus said.
City officials have pined for a hotel on the final parcel of land known as the AAA property west of Nicollet Avenue. The hotel site is north of the city’s Performing Arts Center and Heart of the City parking deck.
A hotel would boost business in the area and complement the arts center, helping it attract corporate bookings, backers say.
“I think the Performing Arts Center has some attraction to developers” as well, Nienhaus said.
Akota Hospitality reportedly couldn’t round up enough financing for the $503,600 land purchase and construction of a $3.5 million hotel. The North Dakota-based hotel management firm missed the city’s Oct. 31 deadline for closing on the property. The Economic Development Authority approved the deal with Akota June 4.
Terms of the new deal require NLD Holdings to close on the property by July 15, 2014, begin construction by July 31 and finish by June 30, 2015.
Other terms are similar to those of the previous deal. The developer is required to build approximately 14 city-owned parking spaces on Travelers Trail, and the city is required to expand the parking deck. It will pay for that project through tax-increment financing funds, proceeds from the land sale, a county redevelopment grant and possibly a Metropolitan Council grant.
The hotel parcel is part of a larger 6.25-acre parcel the city bought for $1.8 million in 2001. The arts center, parking deck and Mediterranean Cruise Cafe now occupy most of the land.
The remaining parcel has carried a “For Sale” sign for about four years. The city has gotten inquiries from would-be developers, but most of their plans — including gas stations and fast-food restaurants — didn’t meet Heart of the City zoning standards.