West metro suburbs see increase in hotels, with the latest coming to Plymouth in 'urban-type village'

Plymouth's abandoned Four Seasons Mall and its parking lots soon will be replaced with senior housing, shops and two upscale hotels — the first hotels to be built in the suburb in a decade.

The project, dubbed Agora, got preliminary approval from the City Council this week for redevelopment of the 17-acre site near Hwy. 169 and Rockford Road. The council is expected to give final approval next week for the project and also may consider a lodging tax and tax-increment financing.

While Minneapolis and St. Paul have had an unprecedented influx of new lodging, Plymouth's expansion reflects a surge in interest and construction of hotels in suburbs as well. According to a recent report by the real estate firm CBRE Hotels, nine hotels in the west and north suburbs are under construction or will be in the next year — about 22 percent of all new hotels in the metro area.

In Wayzata, the first hotel on Lake Minnetonka in more than 50 years — the Hotel Landing — will open this summer as part of a condo development. In Eden Prairie, a five-story Hampton Inn has been approved to be built, the 12th hotel in that suburb, and the city is hearing that other hotel developers are interested.

In Plymouth, city leaders are expecting another hotel in the next year besides the Aloft hotel and TownePlace Suites by Marriott in the Agora redevelopment. That would make 10 hotels, or more than 1,200 hotel rooms, in the suburb.

"The west metro has seen their share of hotels come into the market," said Lowell Lankford of Rock Hill Management, the developer of Agora. "The last two years have been the best we've ever had."

With the increase in travel and the economy rebounding, he said there's more demand for hotels. And hotels are aiming to open in time for the 2018 Super Bowl, which will be played in Minneapolis.

Lankford added that the four-story buildings are near the highway and not the neighborhood, and that market research shows a demand for hotels in Plymouth. The closest hotel is nearly 5 miles away.

"There is a need in that particular area," he said, citing business travelers for many corporate offices off Hwy. 169.

If the Plymouth City Council decides to introduce a lodging tax, a public hearing would follow. State law allows cities to impose a lodging tax of up to 3 percent, with 95 percent of proceeds going toward a local convention or tourism bureau for marketing or promotion.

In Minnesota, 110 cities have a lodging tax including cities near Plymouth such as Golden Valley, St. Louis Park and Maple Grove. Most levy 3 percent taxes, although others such as Bloomington (7 percent) have higher taxes.

Plymouth city leaders say they may seek special legislation to broaden what the city can do with lodging tax proceeds, such as using it to revamp facilities like its ice center. For three years, Ply­mouth has asked the Legislature in vain for bonding money to support the ice center's renovations, including a new roof.

Agora developer Rock Hill Management has signed a purchase agreement and is leading the $52 million redevelopment. Traffic and environmental assessments have been done, and the project would include wetland restoration and phosphorus removal.

Agora, slated to be an "urban-type village," would replace the 1970s mall that has sat vacant near the busy corner for about five years.

"It's blighted," Callister said of the mall property. "It's pretty exciting to have something actually in that area."

Wal-Mart bought the site in 2010 for $10.6 million and was going to build a Wal-Mart Supercenter, but the retailer faced resistance from neighbors. Citing poor soil, 4 acres of uninhabitable wetlands and traffic concerns, the City Council placed a yearlong moratorium on the site while a market study was conducted.

A mixed-use development with offices, retail and senior housing was ultimately recommended, and Wal-Mart wound up putting the site up for sale in 2015.

It also would include a three-story, 339-space parking ramp, which the city could agree Tuesday to buy from the developer for $5 million to accommodate park-and-ride commuters taking an express bus to Minneapolis.

Construction is slated to start on retail space, offices, hotels and the ramp this summer. Those areas could open by December; the senior housing is expected to open by December 2019.

"It's an exciting project that will be a huge benefit to Plymouth," Lankford said. "This is a gateway area that's fallen into great disrepair."

Kelly Smith • 612-673-4141

Twitter: @kellystrib