Mounds View to finalize purchase of Skyline Motel site


Bridget Kranz Mounds View is finalizing its purchase of the Skyline Motel, which is situated just off of Interstate 35W directly across from the planned Rice Creek Commons development in Arden Hills.

courtesy of City of Mounds View A mock-up of what a future hotel on the Skyline property might look like; Mounds View officials are committed to using the majority of the site for lodging.

The Mounds View Economic Development Authority is set to finalize the its $1.3 million purchase of the Skyline Motel property. 

After relocating any remaining long-term motel residents, the city anticipates closing on or around May 1 and has already begun soliciting proposals from a number of developers for a new hotel on the near three-acre site. 

At its last meeting on March 11, the EDA, which is the city council by another name, expressed overwhelming interest in using the site for another place of lodging. Located in the 4800 block of Old Highway 8 just off Interstate 35W, the property offers visibility and accessibility from the interstate, as well as proximity to Medtronic, Land O’ Lakes, Deluxe Corporation and the planned Rice Creek Commons development in Arden Hills. 

The city has already received one official proposal from Commercial Investors Group, a brokerage firm based out of Plymouth, pitching a “dual-brand hotel,” meaning there would be one building on the site, divided into two separately named hotels. One half would contain 40 rooms designed for quick trips; the other half would contain 40 rooms designed for extended stays. 

Mike Sowers, primary owner of CIG, said that hotels in Ramsey County are doing very well financially, averaging over the industry benchmark of 60% occupancy. He also noted the lack of extended-stay options in Mounds View and expressed interest in trying to create partnerships with nearby corporate clients.

 

Need for long stays

Two years ago, when the city was conducting a business retention and expansion visit to Medtronic, the corporation expressed specific interest in having an extended-stay hotel in Mounds View, according to Assistant City Administrator Brian Beeman. 

“There are dignitaries who fly in on private jets to [Anoka County-Blaine Airport]. They need a place to stay and would like something that’s more of an extended stay,” said Beeman. “Some of them could be here two weeks, some of them could be here two months.”

Currently, there are no extended-stay hotels in Mounds View proper, though there is a Homewood Suites by Hilton in New Brighton, one mile south of the Skyline site and 10 minutes from Medtronic. 

At this stage, the EDA has put out an official request for proposals, or RFP, and Beeman has met with more than 30 potential developers. According to him, none  have expressed concern over the extended-stay hotel down the road, saying there’s enough demand in the area.

In addition to nearby corporate headquarters, the potential new hotel’s central location could attract workers from the upcoming Rice Creek Commons development, which is visible from the property. 

Beeman estimates there will be some 20 years of construction at the Rice Creek Commons, the former Twin Cities Army Ammunition Plant site, which is ultimately slotted to include multiple corporate headquarters that would again increase demand for local lodging. 

The EDA will hold a meeting on May 13 at 3 p.m., during which every firm that has submitted a proposal by the city’s May 8 deadline will present its ideas. The meeting is open to the public and, if time allows, will have a brief period for public comments at the beginning of the session. 

CIG has expressed continued interest in the site and will present its proposal again in May; the group will be including two additional potential hotel models. 

“If there’s interest in the concept, we can make it smaller or taller,” said Sowers at the March 11 meeting. “We’re hoping to get some more feedback from the city and the community as the next step.”

 

The time is now

Although the city has earmarked the majority of the Skyline site for a hotel, there could be an opportunity for industrial redevelopment of the surrounding parcels in the near future. 

Bauer Welding is potentially looking to sell two acres at the back of its property, which abuts Skyline to the west. The northern parcel of the Skyline lot could be coupled with this acreage for a potential commercial or industrial project. The EDA is open to hearing joint proposals from developers interested in undertaking this development in addition to the hotel. 

As part of its purchase agreement with the corporation that owns the Skyline property, the city has assumed responsibility for relocating long-term residents currently staying in the back portion of the motel. Beeman said that there are three more residents left in need of relocation, after which time the city will be able to close the sale.

Almost all members of the EDA expressed interest in moving quickly once the sale is finalized, hoping to resell the parcels to a developer in time to break ground this fall.

“We’ve always said we wanted to try and stay ahead of [the Rice Creek Commons] development. Even though our county commissioners have told us that the intent in developing the Twin Cities Ammunition Plant is not to hurt the neighboring communities,” said EDA and council member Gary Meehlhause. “If we’ve got the opportunity to get open property that we have in Mounds View developed before that gets going, we need to take advantage of that.”

Beeman added that, with over 30 developers expressing interest, he has no doubt that there will be a number of proposals to look over come May.

“The city practically has the site sold before we officially own it,” Beeman said in an email. “So far, we have had one proposal submitted with a letter of intent. We are still about a month out before the RFP deadline so we fully expect more proposals to come in.”

 

–Bridget Kranz can be reached at bkranz@lillienews.com or 651-748-7823.

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