The Gaughan Cos. of Forest Lake submitted this rendering of a 95-unit apartment complex to the village of Osceola, Wis., last fall. (Provided by Gaughan Cos./The Minnesota Star Tribune)

A proposal that pits river conservation against housing needs will come before the Osceola, Wis., Village Board on Tuesday, as a developer seeks to set a 95-unit complex near a bluff overlooking the St. Croix River.

The proposal from Gaughan Cos. of Forest Lake would offer much-needed housing for the area. But opponents say the plans would disrupt the riverfront, violating longstanding federal protections for the scenic waterway.

The developer would build on the former site of the Osceola Medical Center at River Street and Third Avenue, one block west of Osceola's main business district and within the village's River Town Management Zone, where town code protects the natural and scenic qualities of the river.

The superintendent of the St. Croix National Scenic Riverway, Craig Hansen, urged the village in a letter last month to consider the river's scenic and aesthetic values as it weighs the Gaughan proposal, saying that it appears from provided documentation that the apartment complex would be visible from the St. Croix River and Osceola Landing, the most heavily used National Park Service landing on the St. Croix.

Some residents have complained about the project's use of tax-increment financing (TIF), calling it a giveaway. In its TIF application, Gaughan said the development would have a minimum value of $18.4 million as of Jan. 1, 2025. The village Planning Commission has considered a 25% TIF subsidy, or about $4.6 million.

The Osceola Area Chamber of Commerce has voiced support for the apartments, touting a list of 50 local businesses that want to see the units built. A 2020 study from the West Central Wisconsin Regional Planning Commission underscored the need, estimating Osceola could use 300 more housing units in the next 20 years. Village Administrator Devin Swanberg said that's driven in part by a healthy local economy, with people clocking in at one of the 2,500 jobs available at Polaris, the public school, the hospital and a bustling industrial park.

Last week, a variance that would have allowed Gaughan to build 10 feet higher than village rules currently allow failed with a tied vote in the Planning Commission.

The village board on Tuesday will consider three conditional-use permits that would allow Gaughan's proposal to proceed: the first would allow excavating more than 10,000 square feet for construction; the second would allow a maximum height of 45 feet; and the third would allow multifamily residential uses within mixed-use buildings in the village's business district, clearing the way for any development to have residential space on its first floor.

Village President Deb Rose said Monday she wants a development process that will ensure Gaughan follows the village's rules, should the village allow the developer to go ahead with its plans. It's undeniable, she said, that housing pressure has grown as more people work from home. In addition, the St. Croix Crossing Bridge, which opened in 2017, has made it easier for people to live in the area while working in the Twin Cities.

"We have a phenomenal proximity to the cities, and we have a phenomenal proximity to cabin country," she said.