Office park in works; 14-building Oakdale project could bring 1,900 jobs over next decade, planners say

BY GITA SITARAMIAH and NANCY YANG; Pioneer Press

A proposed $72 million business park in Oakdale could be another sign of a turnaround after years of sluggish growth in office and industrial real estate.

Carlson Real Estate is developing the business park, one of the larger projects in years in east metro. It could bring 1,900 jobs over the next five to 10 years and involve more than a dozen buildings and nearly 650,000 square feet of office and industrial space.

"This kind of project is very ambitious," said Todd Hanson, a United Properties vice president.

The plans for the Oaks Business Center by Carlson call for 14 buildings to be built on 55 acres east of Interstate 694 and north of Interstate 94. Land sales, approval of public costs and planning and zoning need to be completed before ground breaks on the first multi-tenant office building late next year or spring 2006.

Oakdale officials see the project as a way to boost its tax base by potentially attracting business tenants to what would be the largest office park in that city. "Certainly, this will be a significant project for Oakdale as well as the east metro," said Brent Brommer, the Oakdale community development director.

Carlson Real Estate wants to be poised for future demand after the office and industrial slump of the past few years turns around. "These projects take a long time to put together so you want to do it on the front end of the recovery and not the back end," said Matt Van Slooten, president of Carlson Real Estate.

The project's speed will depend on demand. "The reality is that it's not immune to the rest of the market," Van Slooten said.

Plans call for one of the buildings to be a corporate office tower. No tenants have been signed for that space, or any other proposed for the park.

Oakdale officials hope to lure a corporate headquarters as well as other businesses interested in being close to the nearby 3M Co. headquarters in Maplewood. Only a few Carlson employees overseeing property management will be located on the site.

Right now, the land is mostly vacant. Forty acres consisting of land owned by a private owner and city-owned land purchased from the Minnesota Department of Transportation is set for closing this month, officials said.

Carlson representatives still are negotiating with the owners of a home and an old hotel, but the Oakdale City Council has authorized the use of eminent domain to acquire that land.

Still, Van Slooten said he's confident that a deal will be worked out with landowners to avoid city involvement.

Officials estimate the project will require $5 million in public improvement costs. The city is in talks with the school district and county about setting up a tax abatement program for the property. In such a program, the taxes the developer typically pays to the city, schools and county go instead toward the project for public improvements during the length of the abatement term.

If the city, school district and county all agree, the abatement program would last about 10 years, officials said. Both the planning and zoning are expected to be done in the first quarter of next year, and will include neighborhood meetings and traffic and environmental impact tests, Brommer said.

This year, office developers delivered 225,000 square feet of new multi-tenant construction to the Twin Cities, the lowest level since 1997, and speculative development was expected to be limited next year, according to United Properties.

Officials say a few multi-tenant office buildings have been built in Oakdale and Woodbury in recent years but otherwise there has been very little construction in the suburbs east of St. Paul.

In fact, the limited amount of space available in the suburbs east and north of St. Paul has caused the area to have some of the lowest office vacancy rates in the metro area, at 8.9 percent, according to the Minnesota chapter of the National Association of Industrial and Office Properties.

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