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A proposal to enter negotiations with Graco Minnesota Inc to lease to it part of a planned riverfront park – without taking other proposals – will come before the Minneapolis Park and Recreation Board Wednesday evening.

The staff proposal, to be discussed in a board committee, would allow park officials to negotiate with Graco for six months on a development agreement to lease 3.5 acres of the former Scherer property. That’s just upriver from the Plymouth Avenue Bridge in northeast Minneapolis.

Graco has submitted a proposal with developer Ryan Companies for two office buildings of about 50,000 square feet on that parcel. A lease of 99 years is being discussed. They propose a first building for Graco headquarters, to be built by 2017. A second building for a single undefined tenant would be added by 2019.

The proposal is already drawing criticism from the Above The Falls Community Advisory Committee. It’s an influential neighborhood-based group that advises the city and Park Board on upper riverfront plans.

“We’re very concerned,” Mary Maguire, a co-chair, said Wednesday. The group is drafting a letter on the issue. Concerns include whether the Graco proposal is the type of river-related development that’s appropriate for the site, has sufficient public access, and whether an open process would be better, she said.

“The whole design is very disappointing,” she said. Area park Commissioner Liz Wielinski said she's uncomfortable that the proposal seeks variances from a Park Board set of development criteria.

The Park Board long has planned to lease for private development a portion of the 11.7-acre former lumberyard it bought in 2010. Its rationale was that a lease would provide money to run operate the park.

But the eruption early this year of a dispute with Graco over a long-anticipated easement for a trail on the river side of a Graco factory north of the Scherer site complicated the issue. Public officials noted that Graco pledged the easement in in a 2000 redevelopment agreement that brought tax-increment financing aid to the firm. The firm said that it was released from that by the city in 2009, but public officials have asserted there are other hooks that require granting the easement.

Graco sought to tie granting the easement to having the ability to develop the portion of the Scherer property that the board hopes to lease. That area is known as Parcel D. The board publicly opposed tying the two issues together.

But with the board threatening to go to court to condemn for the easement – a right of passage for the trail over property Graco would continue to own -- the negotiations went on in private as the board met with its attorneys.

The board directed in one of those sessions that Graco be give an exclusive right to respond with a development proposal by June 17, which the firm did. The matter became more public when the board committee’s agenda posted last Friday contained a resolution that would direct its staff to try to negotiate a development agreement exclusively with Graco for the next six months.

The resolution was modified this week –after a judge ordered the easement -- to remove the proposed exclusivity. But the board hasn't opened the park site to proposals from other developers. The resolution still directs staff to see if it can negotiate a deal in six months. That will be debated by the committee Wednesday.

If the staff proposal to negotiate with Graco for six months is rejected, park staff could potentially issue a request for proposals from other developers. If accepted, staff would try for a deal with Graco that better meets requirements of the request for proposals issued only to Graco.

Graco spokesman Bryce Hallowell said this week: “It’s premature to discuss either the meeting that’s coming up or negotiations on parcel D but we look forward to working with the Park Board and we remain encouraged that we can reach an agreement that’s beneficial to all parties.”

(The illustration above showing two buildings at the Scherer site park was submitted with the Graco-Ryan proposal.)