Hotel? Apartments? School? Interest in UNFI campus heats up

A real-estate development and property-management company has joined Eden Prairie Schools as parties interested in purchasing portions of the 107-acre business campus owned by United Natural Foods, Inc. (UNFI).

Both say they’re in the early stages, and plans could change over the coming weeks and months.

Eden Prairie Schools is looking to purchase the easternmost 61 acres of the campus, located north of Valley View Road and east of Interstate Highway 494. This includes the campus’s lone building: a 45-year-old, three-story, 165,000-square-foot office building.

Meanwhile, CSM Corp. is looking to buy and build on the undeveloped, westernmost 46 acres, much of which borders Interstate Highway 494.

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The City of Eden Prairie’s long-range plan envisions office and medium- or high-density residential development on the western portion of the property. City staff say much of this area is difficult, if not impossible, to develop due to floodplains, wetlands, woods, and steep slopes.

Hotel and apartments proposed

CSM Corp., a Minneapolis firm specializing in the hotel industry, has informally presented a concept plan to the Eden Prairie City Council. It calls for a hotel on buildable land at the corner where Valley View Road meets the on-ramp to northbound Interstate 494, with apartment buildings to the north.

CSM representatives told the council on Feb. 20 that the conceptual, 140- to 150-room hotel up to five stories tall would be a replacement for the Residence Inn by Marriott that was built in 1984 at 7780 Flying Cloud Drive but is now considered by the hotel company to be obsolete. Office development as envisioned in the city’s long-range plan isn’t feasible at this time, the company said, with a vacancy rate approaching 30% for Twin Cities-area office buildings.

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The early plan by CSM Corp. also shows a small restaurant or bank next to the hotel.

Eyed for phase two are two five-story apartment buildings – an estimated 320 units in all – on land that is more difficult to develop because of the amount of grading and tree removal that would be required.

CSM Corp. says only 20 of the westernmost 46 acres would be developed, with the rest remaining open space. It said the development concept would provide property-tax revenue for local governments, helping offset tax revenue lost if the school district purchases the rest of the UNFI site.

Council members on Feb. 20 were more receptive to the hotel plan than the proposed apartment development, with several expressing concerns about the amount of grading and tree-cutting that would be involved for the housing portion. More information is needed, the council agreed.

City Manager Rick Getschow emphasized that the presentation was primarily the developer testing a development plan before putting additional work into it. “You haven’t voted on anything, and this is a guarantee of nothing,” he advised council members following the discussion.

School district takes early steps

Meanwhile, Eden Prairie Schools Superintendent Josh Swanson confirmed on March 1 that the school district has taken several preliminary steps that would expedite its use of the property and building if a purchase agreement were reached.

Those steps include:

• School board consensus on a tentative financing plan that, as authorized under Minnesota law, would allow the district to issue “certificates of participation” to fund the purchase without requiring voter approval.
• A formal Feb. 16 request that the City of Eden Prairie begin considering the land-use approvals required to convert an office building into school use, including a change in zoning. City staff said that if the process continues, the city council could vote on the land-use change as early as mid-April.

The district has proposed using the building as its new TASSEL Education Center, a post-high school choice program for students 18-22 years old with disabilities, and as an alternative learning center.

The TASSEL (Teaching All Students Skills for Employment and Life) program has been housed in rented space at the west end of the Eden Prairie City Center, the city hall building at 8040 Mitchell Road. However, the city plans to turn that space into new and expanded quarters for its Police Department and the department’s vehicle fleet.

Swanson described the potential property purchase as complex, requiring many steps, with none of the steps taken so far binding the district if the acquisition were halted. “We’re still in process,” he said.

UNFI announced last April that, with many of its employees working remotely, it would sell its 107-acre Eden Prairie business campus and relocate staff to a smaller regional office elsewhere in the Twin Cities.

The one-building Eden Prairie campus was established in the 1970s as the national headquarters for Supervalu, Inc., a Fortune 500 company that Providence, Rhode Island-based UNFI purchased in 2018. UNFI made the campus its regional headquarters.

Clarification: This story has been updated to reflect the correct ages served by the TASSEL program and the program’s correct full name.