Ruling rejects lawsuit by Witch's Hat fans.

Byline: William Morris

A northeast Minneapolis apartment project has won its battle in court, but changes to the plans have cost it the support of its local neighborhood association.

Chicago-basedVermilion Development's Arts & Architecture project has been tied up in court for more than a year due to its location at 3338 University Ave. SE, half a block from the famous Witch's Hat water tower in Tower Hill Park. A neighborhood coalition called Friends of Tower Hill Park sued in December 2018 under the Minnesota Environmental Rights Act, arguing that the project, which at the time included a 14-story condominium tower, would block views to and from the historic landmark.

MERA, as the statute is known, has been used in previous cases involving sight lines, with mixed results. In this case, however, both the district and appellate court ruled without reaching the merits of that argument. Instead they found the neighbors' claims are foreclosed by collateral estoppel, a legal doctrine that "bars relitigating issues considered by an administrative agency when they have already been adjudicated," in this case through the city approval process, according to the May 2019 district court ruling dismissing the case.

Monday's ruling by the Minnesota Court of Appeals upheld that decision, removing nearly the final roadblock for the project to continue, said Ari Parritz, Minnesota development director for Vermilion.

"[The lawsuit] added a frustrating complexity to the development timeline," Parritz said in an interview. "But, frankly, projects encounter hiccups like this all the time, and you do your best to try to navigate it and ensure a successful outcome, and we are well on that path."

The project has seen several changes in the intervening year. While before Vermilion had pitched a seven-story, 137 apartment building and the 14-story condo tower, it has now shortened the tower by a floor and plans to build all apartments for a total of 256 units. The new project will also demolish a larger portion of the 101-year-old Arts & Architecture building on the property, reducing future commercial space from 34,000 to 27,500 square feet.

"The unique blend of having apartments and condos in the same project was hard, and having condos in and of themselves was hard, and we weren't able to get enough capital interest to actually develop the project in that way," Parritz said.

Those changes required another trip to the Minneapolis Planning Commission, and while...

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