The Challenge of Redeveloping the State Farm Building in Woodbury
An attorney for the firm the city hired to help get the facility redeveloped outlines some of the difficulties, and potential solutions.
John Herman, an attorney with Faegre & Benson, said the process is still in the early stages. The firm has visited the site and is gathering background on the building, which has recently drawn interest from a St. Paul developer who envisions multi-tenant use, a Costco on the grounds and eventually a senior-housing complex and hotel.
“Obviously, this is a very significant property and it’s been vacant for several years,” Herman said.
The city and Faegre & Benson attorneys are looking into different options to redevelop the site, which creates unique challenges because it is a large complex that previously had a single user, Herman said.
“It’s hard to recycle those,” he said.
While there could be a legislative component to getting the building humming again, Herman said part of the plans from Wellington Management, Inc., hinge on its purchase agreement with State Farm and whether that will be extended. There is also the issue of zoning—the land is not currently compatible with plans for a Costo.
“If (the city is) going to allow it, that would change everything,” Herman said.
If not, Woodbury will likely go in another direction, he said, adding that the current state of the economy also complicates things.
“Everybody knows that the marketplace itself is not very robust right now,” he said.
But does Herman think the site will eventually be redeveloped?
“Absolutely,” he said. “We’ve got a lot of precedent for that.”
Working on large corporate offices for major companies can create some “very intriguing problems,” Herman said. Assessors typically value those types of buildings below what one would think, “which is kind of a striking phenomenon,” he said.
He noted that State Farm hasn’t been as aggressive “as the city or you or I would have expected” in selling the building, especially considering the regular upkeep of the site.
Faegre & Benson has often represented developers to find creative financing alternatives, and with the state Legislature on redeveloping city projects, Herman said. And the process takes time.
“It’s going to take a while to figure out what makes sense,” he said.