Council takes first-step on Terrazza PUD; TIF establishment set for Feb. 18 public decision

The St. Louis Park City Council held a public hearing on a proposed tax-increment financing district tied to a mixed-use redevelopment called “Terrazza” at 5401 Gamble Drive and approved first reading of a planned unit development ordinance for the site, while tabling final action on related special-permit and shared-parking requests until the council’s Feb. 18 meeting.

The Terrazza proposal would replace an underused office building at the southeast corner of Park Place Boulevard and Gamble Drive with a six‑story, mixed‑use building. Greg Hunt, the city’s economic development manager, said the developer has estimated the redevelopment value at $91,700,000 and described the project as transit‑oriented and “mixed income.” The proposal includes 223 dwelling units and about 21,000 square feet of ground‑floor commercial space; 45 units (about 20 percent of the proposed total) would be affordable at 50 percent of area median income, and the developer said it plans to request six project‑based vouchers at 30 percent AMI for deeper affordability.

The council opened and closed the public hearing with no public testimony. Hunt told the council that the hearing is to gather public input on whether to establish the TIF district as the financing vehicle; the council was not voting on TIF establishment that night. He said the EDA and council would consider formal establishment of the TIF district and the redevelopment contract on Feb. 18.

Developer Rick McKelvey of Hempel Real Estate described demolition plans and said salvageable materials — including pavers and brick — would be reclaimed for reuse, donation or incorporation into a future park. McKelvey said, “We are gonna reclaim some of the paver materials for our future park… and we’re gonna try to salvage as much of the existing brick as we can.” He told the council repurposing the existing office building itself was not feasible.

Staff and the developer told council members the project exceeds St. Louis Park’s inclusionary housing requirement and would pursue LEED Silver certification to meet the city’s green‑building policy. Hunt said the developer has agreed to follow the city’s diversity, equity and inclusion (DEI) reporting practices; a council member clarified that those DEI commitments are reporting requirements rather than required numeric hiring targets.

Planning staff recommended tabling action on the special‑permit amendment and the conditional use permit for shared parking to allow staff time to update resolutions and exhibits; the council voted to table those items to Feb. 18 and approved first reading of the PUD ordinance (zoning map amendment to PD‑25) and set second reading for Feb. 18.

The council and staff discussed questions about tree impacts, salvage and the likelihood of obtaining the project‑based vouchers. Hunt said the housing authority would make the voucher decision and that city staff expect the authority to be “inclined” to approve vouchers but could not guarantee outcomes. On tree impacts, staff deferred some details to the subsequent presentation and noted tree replacement would include a combination of plantings and a fee‑in‑lieu for trees that cannot be planted on site.

Next steps: the council will consider establishment of the TIF district and the redevelopment contract on Feb. 18; staff will return updated resolutions and exhibits then.