Opponents fight apartment complex development on bluff overlooking St. Croix River

OSCEOLA, WIS. - Fears that a 95-unit apartment complex could soon rise on a bluff overlooking the St. Croix River in this scenic western Wisconsin village drew a standing-room-only crowd to a public hearing earlier this week, with some locals saying the building would ruin the town's historic small-town feel.

A proposal from Gaughan Cos. of Forest Lake shows the complex sitting 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.

"It's not in keeping with the historic nature of the village," local resident Mark Kozlak told the village Planning Commission on Monday night. "It's too costly, it's too big."

The project has not been formally submitted to the village — no site plan is under review — but a 2022 Gaughan proposal shows a three-story L-shaped building with a deck, restaurant, common area and one- and two-bedroom units. In its application for tax-increment financing, Gaughan said the development would have a minimum value of $18.4 million as of Jan. 1, 2025, according to former interim village administrator Frank Pascarella. He said in an email to the commission that a consultant recommended a 25% TIF subsidy, or about $4.6 million.

The project's size and location drew mostly negative reaction from locals at the Planning Commission meeting. Some said they see the need for more apartments in the region, but not in the heart of the village or within view of the St. Croix, which is designated as one of the nation's Wild and Scenic rivers.

Deb Ryun, executive director of the Wild Rivers Conservancy, said in a letter to the village that they should "keep the long view in mind" and take steps to protect the river from overcrowding and poorly planned development.

"The proposed project drawings are cookie-cutter drawings for apartments popping up everywhere in cities, with little regard to Osceola's historic and small town character," she wrote, saying the developer should come back with a plan that's more appropriate for the site.

A spokeswoman for the Osceola Area Chamber of Commerce told the commissioners that she had a list of 50 local businesses who supported Gaughan's plans, citing the expected purchasing power of the apartment building's tenants and the jobs created by the construction project.

The Osceola Medical Center site was abandoned more than 15 years ago when the medical center moved to a larger campus nearby, leaving behind a shuttered building on a 4.2-acre lot overlooking the river. The site has drawn interest from developers before, including informal discussions in 2017 to build senior housing. Gaughan now owns the site, and has drawn complaints from locals about turning off the utilities and allowing the building to fall into disrepair.

The Planning Commission considered two amendments to town ordinances on Monday, both of which are seen as preliminary steps for the Gaughan development. The first amendment would put a set of criteria in place for new development above the 35-foot height limit in the River Town Management Zone. The town code allows buildings as tall as 45 feet in the zone with a conditional-use permit, but the code doesn't include any criteria to help the village evaluate those requests.

Using criteria drawn from Wisconsin state law and with the help of the Wisconsin Department of Natural Resources, the amended ordinance would require that the structure is "visually inconspicuous" in the summer months when viewed from the river, that the natural and scenic qualities of the river are protected, that public health and safety are not threatened and that the structure blends in with the historic character of the community.

A second ordinance amendment would allow multifamily residential uses within mixed-use buildings in the village's business district. The change would also allow any development in the village to have residential space on its first floor.

Pascarella told the Planning Commission in a Feb. 2 letter that the change was being brought to its attention "as it pertains to the proposed apartment development at the vacant hospital." A mixed-use commercial property that wants to put residential on the ground floor would need to have its commercial component on the second floor or basement, Pascarella added. He also sought to allay concerns that the amendment would erase portions of Osceola's commercial business district by turning storefronts into apartments, telling the commissioners that the Main Street businesses and local chamber of commerce would oppose such requests.

The commissioners voted to table the ordinance amendments for one week until their next meeting Tuesday.

A call to Gaughan Cos. for comment was not immediately returned.