A proposal to replace the "Dixie's on Grand" building and parking lot with a five-story, mixed-use apartment complex that includes restaurants, underground parking, outdoor patios and 81 residential units is making its way through a neighborhood review.

The $32.5 million redevelopment plan is backed by Dixie's co-owner Peter Kenefick and officials from the St. Louis Park-based development firm Reuter Walton.

The proposed changes are "emotional," Kenefick said after the first public meeting on the plan, held via Zoom on Thursday. "But I am super excited because I want to make something that is really great. I will be 65 this June and it makes you reflect on what you want to leave [behind]. And this is a gem" of a plan.

Kenefick, whose family has owned the building for 35 years, wants to tear down his existing single-story building, retire the controversially named Dixie's on Grand restaurant and build a larger complex that encompasses the old building's footprint plus the large adjacent parking lot that sits on the corner of Grand Avenue and St. Albans Street.

He said he plans to bring back the building's current businesses — the Emmett's Public House restaurant that was named after his father, and the longstanding Saji-Ya Japanese restaurant. They would go into the first floor of the new building which would offer 10,000 square feet of commercial space.

Kenefick said that he and his partners will retire the Dixie's name because its reference to the Confederacy has become a lightning rod of criticism, especially in the wake of George Floyd's killing and calls for racial equity.

A third retail or restaurant tenant could also go into the first floor, but that decision will require more input from neighbors, Kenefick said Friday. The proposal also calls for four stories of apartments above. The top floor would be set back from the street to alleviate initial complaints about the bulk of the proposed structure.

The middle section of the proposed complex would also be set back from Grand Avenue to make way for outdoor seating, public benches and greenery.

If the plan ultimately wins community support and city approval, Reuter Walton CEO and President Nick Walton said he hopes to submit plans to the city of St. Paul's planning and economic development department this summer. Demolition could start in November.

A second public hearing with the Summit Hill Association is set for April 8.

Thursday's meeting revealed both excitement and dismay over the plan, said Simon Taghioff, chairman of the Summit Hill Association's zoning and land use committee. Renderings by ESG Architecture & Design were presented at the meeting.

Some nearby residents were put off by the idea of more traffic in the area, while others complained about the project replacing a single-story commercial building with five stories. Still others have insisted that at least a few of the new apartments offer affordable rents and that the project perhaps offer retail space to a business owner of color, Taghioff said.

On the flip side, many residents on Thursday's call voiced excitement over such a large investment going into Grand Avenue, he said.

They also liked that the residential part of the project calls for larger apartments that could cater to older residents who want to stay in their neighborhood when they downsize from their large historic homes.

Kenefick said the apartment units will range from 900 to 1,650 square feet and involve one- and two-bedroom units, all with additional den space. The units are larger than what is typically available in the area, he said. Kenefick hopes to build an inset loading dock in the rear of the property that would no longer block the alley when large trucks deliver restaurant supplies.

The new project would replace a "tired" 1960s-era building that has gone through iterations as a grocery store and later Esteban's restaurant before turning into Dixie's and Saji Ya decades ago and more recently Emmett's Public House, which opened in 2015, Kenefick said.

If approved, the new project would be owned by Kenefick's family, Reuter Walton and be partly financed with bank loans and investments from friends.

Dee DePass • 612-673-7725