The developer looking to purchase the State Farm building in Woodbury says several factors led to the deal falling through.
Steve Wellington, president of Wellington Management, told Woodbury Patch Thursday morning that without a firm commitment on rezoning from the city—which would have opened the door for a Costco at the site—and only one potential tenant lined up, it made sense for the St. Paul-based company to terminate the deal.
“We’re still hopeful that we’ll work something out,” he said.
Wellington Management has looked at redeveloping the 420,000-square-foot building along Radio Drive near Interstate 94 for multi-tenant use. The company’s plans also called for a Costco to be built on the site, along with a hotel and senior-living complex in later phases.
“Costco was more than (the city) wanted to swallow,” Wellington said, later adding that not changing the zoning at the site to allow for a larger retailer “limits the marketability of the property.”
State Farm wanted to keep the earnest money for the property, but without Costco or more tenants lined up, Wellington Management wanted to minimize its risk at this point, he said.
“We were getting really close, we thought,” Wellington said.
A phone call to a State Farm representative was not returned.
It’s a challenging property in general, Wellington said. Not too many companies can come in and occupy so much space, he said, and for a building that size, “you don’t do it 3,000 or 4,000 square feet at a time.” There was a commitment from one group that would have used 80,000 square feet of space and brought 500 jobs to Woodbury, he said.
The deal is now in an “awkward, limbo situation,” Wellington said.
Earlier this week, Woodbury Mayor Mary Giuliani Stephens said she had not spoken with Wellington and could not comment on the suggestion that the city didn’t support the plans.
Asked about the city’s support of the plans, Wellington said, “The city is kind of being supportive.”
“Would I have liked the city to jump on board with my plan? Yeah, that would be great,” he said.
Mayor Stephens said she liked Wellington’s idea to redevelop the property for multi-tenant use, considering the difficulties of getting one company to occupy the large space.
Wellington Management never submitted a formal application for development or a request for a zoning change at the site, Stephens said. Rezoning the property would require a change to the city’s recently updated comprehensive plan, approval from the Metropolitan Council and input from neighboring cities.
Wellington acknowledged that the city likely has similar requests for large retailers in other areas of the city, but added that Woodbury has done well to attract similar companies.
In January, Woodbury hired a Minneapolis-based law firm to help get the property redeveloped. There was some discussion about getting special legislation pushed through at the Capitol to spur the redevelopment of the site, but it later became clear that there wasn’t enough time this year to get anything substantial passed.
The work of Faegre and Benson will continue, Stephens said, despite the news that the deal between Wellington and State Farm has fallen through.
“That’s separate from Steve Wellington’s option to purchase it,” she said.
In February, Wellington told Woodbury Patch that the purchase agreement on the property had been extended to September. He would not comment on the purchase price on Thursday.
The building has sat vacant since 2004, when State Farm moved many of those jobs to Nebraska.