Council affirms desire for mixed-use redevelopment of Danfoss property

The City of Eden Prairie has followed through on its desire to shape redevelopment of the nearly 60-acre Danfoss industrial/office property, with the City Council on Tuesday unanimously approving a Guide Plan change that envisions mixed uses, including residential and retail.

Danfoss, which is selling its property along State Highway 5, west of Mitchell Road, has opposed the Guide Plan change, as has United Properties, which has a contract with Danfoss to develop the site after the company leaves at the end of 2025.

At issue is whether the city’s move – not a rezoning but a change to its city’s long-term comprehensive plan, initiated by city staff – handcuffs the owner and developer and their interest in keeping industrial options open.

“The site contains viable, high-quality industrial assets that have been taken very well care of by the users. The comprehensive plan guidance sends the signal, whether intentional or not, that these existing uses are no longer desired,” Connor McCarthy of United Properties told the council this week.

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“That introduces long-term uncertainty for tenants and potential future employers in these buildings, and it makes reinvestment in these buildings a whole lot riskier for somebody like myself,” he added.

But city officials, including Mayor Ron Case, believe a more creative, flexible and long-term approach is needed for the large site in the heart of Eden Prairie, even if it doesn’t materialize for several years.

“That could be a really exciting new area,” the mayor said after Tuesday’s meeting, referring to the site’s proximity to public transportation and other amenities.

“To change the Guide Plan tonight is sending the message that we really want something more exciting.”

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Developer: Vision doesn’t match market

The Danfoss hydraulic-motor manufacturing plant has a long legacy as one of Eden Prairie’s most visible industrial sites, starting as Char-Lynn in 1965. Danfoss announced in January that it would close the Eden Prairie plant and offices by the end of 2025 and sell the property.

It’s possible that someone could take over the plant and make minor improvements to keep it in use. City officials say they’re OK with that. What they prefer not to see is expansion of the plant or new industrial development on the rest of the site, some of which is undeveloped.

The city’s long-range Guide Plan, called Aspire 2040, currently calls for continued industrial flex-tech and office use of the property. But Community Development Director Julie Klima noted that when Aspire 2040 was written more than five years ago, the property was still a successful legacy business.

“Sometimes plans change,” she said this week. “It would be a missed opportunity if we didn’t look at the long-term needs of the community in terms of this very significant amount of acreage becoming available.”

The city has said a mixed-use approach to redevelopment would help meet affordable housing goals and residents’ desire for more retail.

However, United Properties’ McCarthy said some of the uses identified by the city might not be marketable.

“We, United Properties, have surveyed dozens of retailers, more than 10 grocers, and many entertainment users, who have lacked desire to occupy this space,” he told the council.

But city officials on Tuesday indicated they are thinking more long term.

“We have heard from the developer that the market isn’t there to support that mixed use,” Klima told the council before the 5-0 vote. “But I would remind the council that this property has only been on the market for roughly 20 weeks. And sometimes we just have to be a little more patient in order to have the market move into supporting the long-term needs and the vision of what the community’s long-term goals are for that property.”

Amending the Guide Plans had been recommended earlier by the Eden Prairie Planning Commission, which advises the City Council. The amendment must still be approved by the regional planning agency, the Metropolitan Council.