Stillwater North Main Street hotel, approved, may get public assistance

Midnight Real Estate, represented by HAF Group, wants to build a hotel on North Main Street in downtown Stillwater between Images of the Past and Johnny’s TV. (Image taken from planning commission packet)
Midnight Real Estate, represented by HAF Group, wants to build a hotel on North Main Street in downtown Stillwater between Images of the Past and Johnny’s TV. (Image taken from planning commission packet)

Stillwater may offer public assistance to create a parking structure for a $13 million hotel proposed on North Main Street.

The city council approved the hotel March 7, with conditions that include a requirement to provide sufficient parking on site. The developer had asked to purchase monthly permits for the public parking system to make up for a shortage of on-site parking.

Midnight Real Estate LLC has applied to create a 64-room boutique hotel at 232 Main St. N., between Images of the Past and Johnny’s TV. The existing one-story office building on the site, formerly Associated Eye Care, would be demolished.

The hotel, to be known as “The Crosby,” would feature a main-floor cafe called “The Boom” with outdoor seating, as well as a full-service restaurant called “The Dacotah” on the third floor. The Dacotah would be open to the public and offer outdoor dining on the second-story rooftop.

Originally the developers had also proposed a new, three-story parking ramp and an office building. They abandoned those elements after discovering poor soil quality on the site, saying they were not economically feasible.

Instead of a parking ramp, the developer wanted to build a 65- car surface parking lot that would include improvements to an existing city-owned lot. However, the new lot would fall short of the 103 parking spaces required to replace the existing public spaces and meet parking requirements for the hotel and restaurants. The developer wanted to offer valet parking using specific areas of public parking system to make up the difference.

The council was uncomfortable with the parking plan.

“It just makes absolutely no sense to me that we’re trying to cure this from an operational method,” Councilmember Tom Weidner said during a March 7 council meeting. “I know it sounds great now, but if the hotel’s there in 30 years, great — but it’s not going to be operating the same way. Who knows if you own it or somebody else owns it [in 30 years].”

Councilmember Mike Polehna said if there were problems with parking, enforcement of the plan would be a “nightmare.”

Councilmember Doug Menikheim asked what it would take to deal with the soil problem to make a ramp feasible. Daniel Oberpriller, the principal developer, said without public assistance it didn’t make financial sense to build a ramp. When pressed by Weidner, Oberpriller said a two-story ramp without an office building might be possible, but may still require public assistance to be financially viable.

Stillwater city attorney Dave Magnuson said the site of the hotel appeared to be a candidate for designation as a Tax Increment Finance (TIF) district. TIF districts seek to encourage development that would not otherwise occur. They do so by using the extra tax dollars generated by property improvements to help pay for some costs of development, such as bringing substandard buildings up to code.

Magnuson said there would be time to create and certify a TIF district with the county by the July deadline if the process began soon.

Councilmember Dave Junker said he’d want to make sure TIF funds only went to help with the parking portion of the project.

Oberpriller said he was willing to work with the city to come up with a mutually beneficial solution.

“We want to do solid business and be a partner with the city,” he said.

The city council unanimously approved a special use permit for the project with 18 conditions. For the permit to be valid, the developer must present an acceptable parking plan with 103 on-site spaces (including 25 public spaces). There must also be a lease agreement for the city property at the corner of Second and Mulberry streets; an agreement for the use of any TIF funds; and an acceptable plan for receiving deliveries to the property.

Contact Jonathan Young at [email protected]

  • ctmurray

    The earlier plan for the garage had a poor design requiring two entrances / exits onto Mulberry, and an entrance off 2nd. The ones on Mulberry were on a steep portion of the road, a road that is already a problem with sight lines. I hope the new plan has better internal circulation and fewer entrances, hopefully none on Mulberry.