Dispute over green fees delays United Village hotel

Construction of a hotel at United Village is well underway again thanks to an agreement with city officials. Delays that brought the project to a halt in early fall were worrisome for the United Village developers, who contend that such delays are costing them millions of dollars as they work to fill in the “superblock” bounded by St. Anthony, Snelling and University avenues and Pascal Street.

The hotel permit dispute centered on the costs of green infrastructure and whether the developers are paying twice. It’s also part of longstanding issues of permit delays for United Village as a whole. One example is the planned Bailey Garden public flower garden, which must wait until 2027 if it is to be developed at all.

The hotel work delay was for several days. The message from United Village leadership is that project delays have a significant cost, especially for larger projects. The dispute led to Union Park District Council (UPDC) becoming involved, supporting an offer by Minnesota United team owner and development leader Dr. Bill McGuire to put green infrastructure fees in escrow so that the project could move ahead.

UPDC board members said that the idea of putting a fee in escrow sounded like a reasonable compromise.

“This area is in dire need of investment... Delay harms all of us. We believe the developer has proposed an appropriate and reasonable path forward,” the letter stated.

“We’ve struggled with permitting,” said Mike Hahm, project advisor for United Village. He said that parts of the United Village project are a year or more behind schedule, which is adding millions of dollars to project costs.

The latest debate was over the green infrastructure fee tied to hotel construction, said Hahm at the Sept. 2, 2026 UPDC Board meeting. “Despite all of our best efforts, we’re not working on the hotel right now. ... Every day for us is literally thousands of dollars lost.”

United Village has a central underground infrastructure for stormwater management, which was installed in 2018. At issue is the fee for connecting to that infrastructure. Other permits were held up until the fee of more than $300,000 was paid. Crews were kept waiting, including those ready to work with precast concrete. One fear was that workers would move on to different jobs, which would cause even more delays.

A spokesperson for Mayor Kaohly Her’s administration said Sept. 9 that the United Village developers agreed to pay the fees. They would then file a protest letter contesting the fees, due to the previous investment in stormwater management infrastructure and a legal infrastructure settlement that predated the Her administration.

“One of the key important elements is that the mayor directly worked with Dr. (Bill) McGuire to keep construction moving forward on the site, and she looks forward to celebrating the opening and occupancy of the office building, the restaurants, and the hotel,” said spokesperson Matt Wagenius. He also noted that the other green infrastructure fees were paid without objection.
The hotel and an office building near Snelling are expected to open next year. Midway Diner opened at the end of September. Picco Pizza and Gelateria is set to open soon.

But the fate of a public flower garden, the Bailey Garden, is still open to questions. The garden is a project with Newport-based Bailey Nurseries. The project has been held up for two years due to stormwater permit issues and Hahm questioned if it would happen at all. At one point McGuire had said that if the garden didn’t move forward in two years it wouldn’t move forward at all. But city leadership said they are assuming the garden will go forward.

The garden is to be located between the loon statue and the hotel, along Snelling. It has been through review with Capitol Region Watershed District.