Traffic study is another small step toward possible mall redevelopment

The City of Eden Prairie has commissioned a study of vehicle traffic around Eden Prairie Center, another baby step toward possible redevelopment of the shopping center’s north end.

Study results will help the city, the mall’s owner and potential developers determine how traffic at nearby street intersections would be affected by replacing the JCPenney department store, the parking lot to its north, and a portion of the inner mall with new development.

The data collection, estimated to cost $28,500, will be paid by Hines, a Dallas-based development company working with the city and the mall’s owner, MetLife Insurance, on possible improvements to the 48-year-old mall. SRF Consulting Group will do the work through a contract with the city, examining 11 street intersections and the mall’s parking lots.

Adam Gadbois, assistant city engineer for the city, said a traffic study would likely be required as part of an Environment Assessment Worksheet triggered should the project go ahead.

Advertisement

However, Dave Lindahl, the city’s manager of economic development, confirmed Friday that no formal application for development has yet been made.

Lindahl described the potential multi-year redevelopment as complicated, with financing gaps that would likely require help from the city or other agencies.

Discussion so far has focused on converting roughly 450,000 square feet – including JCPenney and its north parking lot – to potential new uses, including apartments, offices, a hotel, and a limited amount of new commercial space.

“This isn’t our average development. If this happens, it would be pretty significant,” Lindahl said, with “just a lot of moving parts.”

Advertisement

City might assist in redevelopment

One of those moving parts is the possible use of tax-increment financing (TIF). TIF is a financing tool available to cities that uses the additional property taxes paid due to development or redevelopment to fund part of the project’s costs.

The city was unsuccessful in getting the 2024 Minnesota Legislature to pass an exemption to TIF law. The exemption would have allowed Eden Prairie to move ahead with TIF without first declaring the mall “blighted,” a requirement of state law. City officials don’t believe the mall is in a blighted condition.

The bill passed through committees and, at one point, was part of the Legislature’s major omnibus bill. But, in hurried maneuvering as the Legislature’s adjournment deadline approached, local provisions such as Eden Prairie’s were stripped from the bill.

“We were very disappointed; our lobbyist thought it had a good chance,” said Lindahl, who testified before lawmakers and this week said it’s likely Eden Prairie will try again next session.

“We’ll continue to ring that bell,” he said.

Though far from being a “dead” mall — Eden Prairie Center has five department store anchors, several of which appear to be doing well — the market value of the mall, along with the property tax revenue it generates, has fallen sharply in recent years.

The portion of the 1.4 million-square-foot enclosed mall, excluding anchors Von Maur, Scheels, Target, and Kohl’s, was valued at more than $90 million when the center was sold to Cypress Equities in 2013. Its value today is $30.1 million, according to Hennepin County tax records.

Over the last five years alone, the total annual property taxes generated by the mall proper and the anchors has fallen from almost $4.4 million to slightly more than $2.5 million, according to the county.

Meanwhile, JCPenney in Eden Prairie remains closed due to damage from a small transformer fire in April.

Nancy Litwin, vice president and general manager of Eden Prairie Center, said the mall and JCPenney are working with officials to complete utility repairs and reopen the store. She added that a reopening date has not been determined at this time.