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A boutique hotel in the Uptown area received approval Thursday from a key Minneapolis City Council panel, setting it on a path for possible mid-2017 opening.

The 120-room hotel would be built on the corner of W. Lake Street and Emerson Avenue S., now the site of surface parking lots and a shuttered restaurant. It is being developed by Graves Hospitality under Marriott's new "Moxy" brand.

If built, it would be the first hotel in Uptown since the 1970s. Two hotels were in the works for the area about 10 years ago, including one by Graves, but plans were derailed by the mortgage crisis.

"It will be very neighborhoody. It will really speak to the neighbors," said Ben Graves, president of Graves Hospitality. "It won't be like sticking a Courtyard by Marriott there, which is a … suburban-type hotel."

The local neighborhood association opposed the project, saying that it conflicts with a plan for the area calling for hotels to be located closer to the Hennepin Avenue-Lake Street core.

Several neighbors filed a formal appeal with the city, objecting to the hotel use and the height of the six-story building so close to single-family homes.

"To assert [that] a six-story hotel next to a two-story home is not going to damage our homes' livability, our right to enjoy privacy and financial values is not credible," said neighbor Phillip Qualy, who filed the appeal.

The hotel was originally slated to be nine stories, but developers scaled it back to six stories at Lake Street and five stories closer to the homes to quell neighborhood concerns. It also will feature a restaurant on the ground floor.

Neighbors' appeal denied

The city's Zoning and Planning committee, chaired by Uptown-area Council Member Lisa Bender, voted to deny the neighborhood appeals. The committee simultaneously granted the rezoning necessary to allow for a hotel use.

The vote is subject to approval by the full City Council on March 18.

Council Member Lisa Goodman, who represents half of downtown, said thoughtful city growth requires development "where it makes sense."

"I can see how people living on Emerson [Avenue] don't like it. I can. And I empathize with you," Goodman said. "But ultimately, it's not just the people living on Emerson we have to pay attention to. It's the broader neighborhood and the broader city."

Bender said the rezoning was justified in part because city plans call for Lake Street making a transition from auto-oriented uses to developments more inviting to walkers.

Location, size at issue

About 20 people testified on the proposal, roughly split between frustrated neighbors and supporters who believe a hotel would be a boon for business in Uptown's thriving commercial core.

Several opponents stressed that they did not oppose an Uptown hotel, just the Moxy project's location — about a block east of the zone where the city plan says "evening uses such as nightclubs and hotels" should end.

"We very much support and would like to see a hotel in Uptown," said Nazeera Mohammed, who lives down the block from the site. "What we don't like is a huge structure abutted up against our residences. It's very clear in the [local area plan] that this is not what is desired."

Uptown is changing

The hotel is among several projects in recent years adding density to the core of Uptown.

Most recently, the former Cheapo music store a block west was demolished to make way for a six-story building with apartments and a ground-floor Target.

But large auto-oriented spaces remain, including a 35,000-square-foot triangular block devoted to an Arby's and a surface parking in front of the Moxy project. Next to that sits about an acre of surface parking for Cub Foods, fronting a busy sidewalk.

Both blocks are owned by Supervalu, Cub's parent company.

The hotel proposal requires the demolition of a two-story restaurant building, erected in 1912, most recently home to Tadka Indian Bistro. The building originally housed a grocery store, then changed in recent decades among the Blue Heron Cafe, Delites of India, Moghals and Natraj India Kitchen.

Ashok Dhariwal, who owns several yoga studios in the city, noted that there is a gap between the Hennepin-Lake and Lyndale-Lake areas.

"This project will be a great Band-Aid to connect Hennepin and Lyndale from a business perspective," Dhariwal told the committee. "There's a need for increased development in that area."

Eric Roper • 612-673-1732

Twitter: @StribRoper