The Columbia Heights City Council on March 23 approved sending a comprehensive plan amendment for the former Rainbow Foods site to the Met Council, advancing plans to redevelop the property as a transit-oriented development.
The vote was 4-0, with Mayor Amáda Márquez Simula absent because of illness.
City Planner Ursula Brandt said the item had been reviewed by the Planning Commission at its previous meeting.
The 13-acre site, on Central Avenue between 43rd and 44th avenues, is currently designated in the city’s comprehensive plan for commercial use, with part of the property set aside as park space for stormwater. The proposed amendment would redesignate the site for transit-oriented development, Brandt said.
Brandt said the property is a large, prominent site that is now mostly a parking lot after previous commercial buildings were torn down.
Community Development Director Mitch Forney said Rainbow Foods operated there from 2000 to 2010. After Rainbow Foods and Slumberland left in the early 2010s, Ace Hardware, Dollar Tree and a car repair business remained.
Forney said the property later fell into disrepair before Hy-Vee bought it in 2016 with plans to redevelop it. Hy-Vee also bought two empty lots on 47th Avenue for a gas station, he said.
That redevelopment never happened.
Forney said Hy-Vee began the city approval process and established a tax increment financing district to help fund the project, but the company had overextended itself. In 2021, he said, Hy-Vee began selling off Twin Cities-area assets it had purchased, including the Columbia Heights site.
At that point, the city decided it was important to gain control of the property and guide its redevelopment, Forney said.
The city partnered with developer Alatus in 2021 and 2022 to buy the site, issuing temporary bonds to loan funds to Alatus for the purchase from Hy-Vee.
Alatus demolished the old commercial building in 2022 after it had become dilapidated.
Forney said the council later reissued temporary bonds and, this winter, reissued permanent bonds to complete the project.
Addressing questions raised at the Planning Commission meeting about why the amendment is being pursued now, Forney said the city had incorrectly believed a comprehensive plan amendment would not be required for a commercial site of this size.
“Any increase of 250 units or more, which would have been triggered by previous site plans, does create a comprehensive plan amendment,” Forney said. “And thus, that is what is being brought forth today.”
Brandt said the city also expects an environmental assessment worksheet will be required for the development. That review would cover issues including stormwater, sound and traffic.
She said staff submitted the amendment Feb. 27 for a 60-day review by adjacent and affected jurisdictions.
At the Planning Commission’s March 3 public hearing, residents raised concerns about stormwater and potential tax increases and also offered feedback about what they would like to see at the site, Brandt said.
Brandt said the Metropolitan Council would need to approve the amendment before sending it back to the City Council.
Council Member Rachel James said the survey included in the meeting packet drew several hundred responses, and she thanked residents for providing feedback.
James said the city’s projected population is expected to reach 24,500 by 2050, equating to 10,300 households.
“We also have a huge housing shortage in the Twin Cities region, and so this would be a way for us to do that in a responsible way,” James said.
James also noted that the meeting packet said the project is expected to be 85% residential and 15% commercial, and that it would take advantage of planned transit expansion.