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South shore development: 'A developer's dream'

Interest in the 140-acre Village and South Shore has been strong, according to those who are working to market and promote the land.

"It's been incredibly encouraging the last two-three weeks," said Dave Hengel, the director of leadership and development with the Headwaters Regional Development Commission.

The HRDC has a staff of four working under a development assistance agreement with the city. Russ McGinty with North Central Commercial Real Estate, LLC, is the broker.

The Village is envisioned to be a mixed-use housing and commercial development boasting more than 5,000 feet of public lakeshore. There also will be an extension of the Paul Bunyan Trail and an improved public beach and boat dock.

Hengel and Aaron Chirpich, a development specialist with the HRDC who works primarily with housing opportunities, both said the project is a "once--in-a-lifetime opportunity" for Bemidji.

"It's a game-changer," Chirpich said. "It's a developer's dream."

The project is gaining momentum and interest from developers, McGinty said.

To date, two developable lots have been sold. There also is a pair of projects possible in the near future.

Still, there are 11 lots remaining to be sold.

The city must pay off $5.78 million in land acquisition bonds, plus interest, from the sale of property in the redevelopment area.

"There is some urgency on our part," Hengel said. "We're committed to moving the property as quickly as possible."

McGinty and the HRDC were hired in October to lead the marketing and connect with developers to sell the land.

Hengel said there are about 10 "serious contacts" who are interested in developing land in the Village, which includes the former Minnesota Department of Transportation building site.

While declining to name those interested, he said some are local and some are not.

An event is planned for prospective developers in tandem with the March 4 Bemidji State University men's hockey game against the University of Minnesota. At least five Twin Cities-based developers will come to Bemidji and receive site and community tours before taking in the hockey game from at suite at The Sanford Center.

Each developer attending the event has more than just a remote interest in the Village, Hengel noted.

"Each of them is a big developer," he said, crediting his project team members with the plan. "It's a great idea, a great event."

Suites have been donated by Kraus-Anderson and Paul Bunyan Communications.

"They are helping us to be ambassadors for the city," Hengel said.

He said excitement for the Village is growing.

"I'd be surprised if I didn't see anything this spring, even disappointed," he said, when asked about the potential for formal applications.

McGinty agreed that developers are interested. He said the 140-acre Village is unique in that there are very few opportunities left for such a large lakeside development.

He expects to see some proposals from developers this spring or this summer, he said.

"A lot of it is tied to credit becoming more obtainable," he said. "That's happening. Slowly. But it's turning."

There are four projects that have the potential of breaking ground this spring or summer. Spokesmen for all four said their progression in coming months will depend on the economy.

The DoubleTree

The Edgewater Group purchased the western-most lot in 2010, spending $572,505 for 2.14 acres of property.

The plans are for an 85- to 88-room DoubleTree Hotel that would be attached to the Green Mill. The Green Mill now is attached to the Hampton Inn & Suites immediately to its west. The DoubleTree would be attached to the Green Mill to the east.

Rich Siegert, with the Edgewater Group, said he still plans to continue with the project and break ground, but would not commit to a timeframe.

"The general plan is to move forward in a timely basis," he said.

The project needs to overcome a "hiccup" associated with mortgage financing.

Lakeland studio

One of the very first properties sold was a 1.44-acre lot to Lakeland Public Television for $20,955. This piece of land is located at the northeastern corner of the First Street East and Grant Avenue Northeast, further from the lakeshore.

Bill Sanford, the general manager for Lakeland, said the station plans to construct a new studio on the property.

He said he does not expect that to happen immediately, citing the economy and the need to raise funds for the new facility.

Lakeland now is housed in Deputy Hall on the Bemidji State University campus.

Sanford acknowledged that there have been conversations with BSU President Richard Hanson about whether the studio could remain on campus.

Lakeland is cramped for space and previous conversations with a previous BSU administration did not gain traction, so the TV station felt it was out of options, Sanford said.

Now, it seems it might be an option to remain at BSU.

"It's possible it could go either way," Sanford said.

Considering the issues at BSU, including the recalibration plan, he said, the future of the Lakeland studio has understandingly not been Hanson's top issue.

For now, Lakeland still views the south shore area lot as its future home, Sanford said.

Holiday Inn Resort

Plans for a Holiday Inn Resort attached to The Sanford Center also appear to be progressing positively.

Ray Brenny with Brenny Properties said there was a setback when local financing for the project fell through, but now the project is working to obtain financing from outside the area and is working with larger financial institutions and private investors.

"If everything goes through the way it is progressing, we should get a shovel in the ground in May," he said.

The Holiday Inn Resort would be attached to The Sanford Center to the west.

The plan has been tweaked a bit since it first was presented to the City Council last fall. Then, the plans were for a 143-room hotel.

Due to the tight credit market, lenders have been "extremely cautious," Brenny said.

Lenders required a third-party opinion on the site and proposal. Hospitality Real Estate Counselors group did an independent impact market study which advocated for a 125-room full-service hotel.

Now, he is working on a two-phase plan. For phase one, he plans to construct a 100-room hotel. Later, he would add a phase two addition with 68 rooms.

Credit markets are tough, Brenny said, explaining that he scaled the project back in order to keep costs manageable.

The 100-room minimum was stated in the city's Request for Proposals that was sent to prospective developers as the city sought a hotel to be attached to The Sanford Center.

"Things seem to a little more comfortable for financing with a 100-room hotel," Brenny said.

A Sporting News Bar and Grill is still planned for the first floor.

Brenny said he will again go before the council once he has the financing securely in place.

"Three or four years ago, we'd have been in the ground by now," he said of the current economy.

Lake Bemidji Lodge

The units for Lake Bemidji Lodge are expected to become available this week.

Lake Bemidji Lodge would consist of 22 residential units ranging in size from 720 to 1,900 square feet. All units would have lakefront views, their own parking space in an underground garage and access to a shared workout and yoga facility. It also would feature a Zorbaz on the Lake on the first floor.

Property has not been sold for the project yet.

Drew Olson, principal with MoDevUSA, said some of the condos must be pre-sold to show that the market can support the project.

"If it is, we should get going right in the spring," he said. "If not, we will just wait and see."