The Wayzata City Council voted 4-1 to instruct staff to draft a resolution for the denial of an application submitted by Presbyterian Homes on Tuesday, January 9th.
The proposal sought to convert the former Lunds & Byerly’s retail space at the Promenade’s Superior Block into loft-style condominiums.
City Staff is expected to present findings of fact and a final resolution for denial in the future.
Despite a 4-3 recommendation for approval by the Planning Commission on November 6, the proposal faced opposition during the City Council vote.
Presbyterian Homes and Services, the property owner, aimed to breathe new life into the 35,374 square feet of vacant retail space, formerly Lunds & Byerly’s Kitchen, with plans for 12 loft-style residential condo units.
The retail space has been dormant for approximately 6.5 years.
A report by City Staff highlighted challenges within the retail portion of the Promenade project, revealing a 38% vacancy rate, with 8,700 square feet along Lake Street remaining vacant since construction.
Economic hardship affecting the applicant due to operating costs traditionally borne by tenants, was cited at the meeting.
Originally approved in 2007 as part of the Wayzata Bay Center redevelopment, the Promenade’s Planned Unit Development (PUD) has undergone changes reflecting shifts in retail dynamics over the past fifteen years.
Presbyterian Homes emphasized the impact of online shopping and pandemic-related strains on retailers, prompting a reevaluation of the use of brick-and-mortar spaces.
Challenges in leasing existing retail spaces were attributed to the evolving nature of retail, along with visibility, foot traffic, and elevation concerns.
During the City Council meeting, Mayor Johanna Mouton voiced concerns about the persistent vacancy, urging collaboration with Presbyterian Homes.
The mayor expressed disappointment in the perceived lack of engagement, calling for a solution and suggesting a more active dialogue, “We have been concerned about the vacancy. To say there were tens of thousands of hours spent on this (redevelopment) project at a City level, a community level, and by Presbyterian Homes is an understatement. For years we have received feedback, asking what is going on over at Folkestone? It’s vacant, it’s constantly vacant.”
Mouton continued, “We were so concerned… (that we asked) what is going on, how can we work with Presbyterian Homes to fill this space, Staff please reach out to them… let’s come to the table, lets figure out a solution, what does that look like… crickets, crickets… it’s a bit of a poke in the eye and it doesn’t make us look good.”
Mouton also indicated how positive the relationship with Presbyterian Homes representatives had been during the initial development, “…John Merhkens… he was a wonderful advocate throughout the construction process, when issues would arise he came to the table always, communicative, responsive.”
Lisa Albain of Presbyterian Homes stated in response, “First of all, I’m not passing the buck, I apologize for the experience you all have had, I was not a part of the conceptual development of Folkestone, nor was I a part of the leasing efforts for the retail space up until about nine months ago. The people who were a part of Presbyterian Homes, and Folkestone that you had relationships with have retired and are no longer with the company any more. We are doing our very best to locate files, to understand history, to really right the ship and I think we have done a very good job in the last year, it’s changing.”
One of the retailers the Council and Presbyterian Homes celebrated together in the meeting was the placement of Red Cow Gourmet Burgers near the Hotel Landing.
However, questions were raised about the information presented to the Planning Commission by Council Member Molly MacDonald, “I’ve been disappointed with what you guys have shown up with in terms of data to the planning commission meeting, there was a little bit more context in this packet, but to say we have contacted everyone, we have reached out to all these people, you said you have been engaged, like what restauranteurs did you engage with? I feel like there isn’t any hard data showing what you have actually done, and I have this being juxtaposed with a developer at 50th & France who had been courting my retail business in Wayzata at the same time I was trying to get ahold of you guys, and I kept thinking, why can’t they hire this guy who calls me once every six months, offers deals, and now that space is vibrant, active, and fully leased to my knowledge.”
Presbyterian Homes highlighted unique challenges posed by the deep and extensive retail space, making it difficult to attract boutique retailers.
The site’s depth and access issues were emphasized, with concerns about visibility, walkability, and the absence of credit-worthy tenants willing to lease the space.
Presbyterian Homes attorney Christine Eid stated, “There are objective challenges with this space that won’t be resolved, and at this point in time it’s costing the owner over $300,000 in operating expense losses, and requiring this to be commercial and not allowing some flexibility, it removes the ability of the owner to actually make it economically viable.”
The east end of Mill street is the only place where the retail is flush with the street, around the rest of the perimeter one has to walk up many stairs, and a loading dock on the northwest side of the property also creates access issues.
The Promenade mixed use project has approximately 111,000 feet of retail and commercial space in all the blocks, and the conversion to residential condos would be an impact of approximately 24% of that commercial space; and 2% of the overall Promenade project which exceeds over one million feet including condos, retail, the hotel, senior living etc.
The potential denial of the proposal underscores ongoing challenges in leasing efforts at the Promenade, stay tuned for more coverage.
Finished reading? Also see the story on the lawsuit between Anthropologie and the Promenade.
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