Maple Grove leaders flag JCPenney site and report steady commercial demand amid labor constraints

Community and Economic Development Director Joe Hogeboom told the Maple Grove City Council on Feb. 21 that overall permit revenue has increased while multi-family residential permitting has declined, and that retail vacancy in Maple Grove is low at about 6.1 percent compared with 8.3 percent in West Hennepin County and 10.9 percent metro‑wide.

Hogeboom said industrial vacancy remains below 4 percent and unemployment is roughly 2 percent, and he warned that trades staffing shortages and high construction costs could slow project delivery and increase demand for gap financing. He also noted that the U.S. Department of Housing and Urban Development’s revised CDBG rules will require clearer alignment between funded activities and outcomes related to housing affordability and economic opportunity.

Councilmember Mike Ostaffe asked whether the city could act proactively on the long‑vacant JCPenney site in the retail area. Hogeboom and City Administrator Heidi Nelson said developers have tried outreach but the property owner has been unresponsive; Mayor Mark Steffenson said the site has been a problem for 10 to 15 years and appears neglected.

The council did not direct a specific regulatory action at the session, but members signaled a desire to prioritize attention to the site and to continue exploring options for spurring high‑quality redevelopment in an area with little remaining development land. Staff said they will follow up with options to make the site a priority for planning and code enforcement efforts.

Looking ahead, Hogeboom said housing demand will diversify with steady need for senior and targeted workforce housing and that employment‑based development will remain a primary economic driver.