Shakopee buys properties for $500K, sells them to developer for $1

The city thinks its downtown really needs a boutique hotel.

Desperate to bring a boutique hotel to its downtown, the City of Shakopee has given a developer a helping hand by buying up two properties for $500,000, and then selling it to them for $1.

Not able to afford the demolition and construction costs required to redevelop the land at 339 and 321 First Ave. W., Shakopee City Council agreed at a meeting in June to simply buy the properties and hand them to development company CPM for a buck.

A third property, owned by the city and worth $90,000, will also be sold to CPM as part of the $1 deal. The developer will then set about building a $16 million, 110-room boutique hotel on the land.

A tenant for the hotel is yet to be found, but depending on which brand takes it over in the future, it could also include a full-service restaurant and 6,000 square feet of meeting space.

Only one city councilor, Matt Lehman, voted against the sale, with the Shakopee Valley News reporting he said: "The government shouldn’t be in the business of using tax dollars to buy private properties to give away to developers, period."

But Shakopee Director of Planning and Development Michael Kerski said the city was motivated by finding a developer for the land who would pay for demolition and redevelopment, saying: "We’re selling for a dollar to get someone to invest in the property here. We don’t have the cash to put into it."

The city also sold city hall for $1

The city is also teaming up with CPM to redevelop the soon-to-be-former Shakopee City Hall at 129 Holmes Street, again transferring the property – worth $2.1 million – to the developers for a single buck.

CPM in return agreed to invest $8 million in a 70-unit market-rate housing development on the site, including a parking lot with space for 50 cars.

It has set a deadline of demolishing the city hall and building the housing units by the end of 2018, and a deadline of the end of 2019 to get the hotel built on 1st Avenue.

It's not uncommon for local governments to sell land cheaply to private companies in order to spur regeneration.

CityPages reported in November that Minneapolis was offering two Northside properties to developers for $1 provided they rehabilitate them, and did the same in 2015 with the Hollywood Theater in northeast.

Minnesota State Colleges in May announced a $1 asking price for someone to take over and rehab the H. Alden Smith House near Loring Park in Minneapolis.

Next Up

Dean Evason

Wild fall flat against Predators, lose first game of season

The Wild couldn't stay out of the penalty box in a 5-2 loss.

Screen Shot 2021-10-24 at 10.11.36 AM

Search for Wisconsin woman whose vehicle was found near Hinckley

Ashley L. Miller, 33, was reported missing on Sep. 24 after her vehicle was found without her in it.

Dak Prescott

Report: Dak Prescott will be 'ready to go' for matchup with Vikings

The Dallas quarterback is expected to be available for next Sunday's showdown.

Eddie Rosario

Where Eddie Rosario's championship series heroics rank since 2000

The former Twin put together an all-timer to help the Braves reach the World Series.

plane, Piper PA-32

2 dead after plane crashes near residence in rural Wisconsin

The aircraft also struck the house during the crash.

Screen Shot 2021-10-23 at 9.38.43 PM

1 dead after van crashes and lands on Highway 100 in Brooklyn Center

Northbound Highway 100 was shut down following the crash Saturday night.

Jess Peterson

Woman killed in crash ID'd as 'bad ass biker chick' with 'giving spirit'

The 30-year-old died in a motorcycle crash on Oct. 19.

Karl-Anthony Towns

Timberwolves' defense fuels win over Pelicans

The Wolves' have bought in on the defensive end as part of a 2-0 start.

Minnesota Wild

Ryan Hartman's OT goal helps Wild stay undefeated

The Wild improved to 4-0 with a win over the Ducks.

Mar'Keise Irving / Gopher Football

Gophers pound Maryland to stay in Big Ten West race

Four different players scored a rushing touchdown in a 34-16 victory over Maryland.


Developer buying Danny Heinrich's home says it'll be demolished by Christmas

Danny Heinrich's house is being sold to a developer, but he has no intention of doing anything but destroy it.

Mpls property owners now have to enter lottery to buy low-cost trees

The city made the change to its tree program due to "overwhelming popularity."

What do you do when a storm brings down a tree on your property?

Cities only really help if the tree falls onto public land.

What do you do when a storm brings down a tree on your property?

Cities only really help if the tree falls onto public land.

Best Buy just stopped selling unactivated iPhone Xs

It comes days after the company slapped a $100 surcharge on the $999 phones.