Doran Companies’ recently proposed Dinkytown apartment complex could instead be a hotel without retail space.

In August, Doran Companies unveiled a plan to develop a mixed-use, six-story luxury housing complex to the Minneapolis City Planning Commission. The development would displace Mesa Pizza and other businesses.

But Doran Companies CEO Kelly Doran told the Minnesota Daily on Wednesday that the company is now considering building a hotel on the land instead. The hotel plan would be the same size and likely not include any retail space, Doran said.

“I think there may be a need for something fresh in hotels around campus, and we are exploring it,” he said.

Apartments or hotel, the development is expected to break ground in early fall 2014, pending City Council approval.

After a planning commission meeting to discuss the project Aug. 29, Doran said he would be “happy” with the current businesses returning to the new building.

“We don‘t have any defined arrangements, but we’ve had discussions with them,” he said. “There’s been a lot of false stuff about them having to pay high rents to come back. That’s just not true.”

 The owners or managers of Camdi Restaurant, Mesa Pizza, University LifeCare Center and Dinkytown Tattoo Shop all said they would like to return to their current locations.

But the owners of Camdi and Dinkytown Tattoo Shop said they haven’t had any correspondence with Doran Companies regarding the proposed project.

Mesa Pizza and University LifeCare Center managers said they spoke with Doran representatives about a month ago. Both were told the property could be sold for development, but the discussions were otherwise ambiguous.

“It was so preliminary, I didn’t know what it meant,” University LifeCare Center executive director Dan Saad said.

Mesa Pizza and University LifeCare Center managers said they haven’t negotiated with the developer.

The owner of Publika Tea and Coffee Union, also located on the implicated lot, declined to comment for this story.

‘Are you closing?’

Small business owners say they feel threatened and confused by the influx of development in Dinkytown.

Dinkytown Business Association president Skott Johnson said if new development continues in Dinkytown, only national chains would be able to afford it.

Doran said small businesses are risky because “there is a high probability they won’t make it.”

“I remember [the Doran representative] saying they would have a spot for us, but I also remember them saying it wouldn’t be on the main road,” Saad said. “Are they obligated to say that because we have a lease? I don’t know.”

Mesa Pizza general manager Matt Tompkins said the community won’t have much input when it comes to the proposed Doran Companies development.

“What will come out of this will be based on contracts and laws, not whether people want something built here or not,” Tompkins said. “Why do I want to spend time fighting something I can’t change?”

Property owners have to make money too and can do whatever they want with their property, Tompkins said.

“My theory is, it’s going to happen and there’s nothing you can do to stop it,” he said. “It sucks if a place like Mesa gets the ax because of it.”

Tompkins said the customers ask when and if he is going out of business every day.

“Every day I get customers asking, ‘Are you closing?’” he said. “I’m going to put a sign on the window to explain soon.”

The cost to stay

If the new development does contain retail space, businesses’ rent could go up.

Camdi and University LifeCare Center said they rent their current spaces for about $3,000 per month.

Chilly Billy’s owner Bill Marker said he pays more, between $4,000 and $5,000 per month, for his retail space in Doran’s Sydney Hall. Marker said he would expect rent to increase in that area of Dinkytown if the Doran project goes up.

“Those are going to be prime spots. The rent has to be higher,” Marker said. “It would be a brand-new building. If you’re a businessman, you take the highest bidder.”

Josh Jungling, owner of Erbert and Gerbert’s Dinkytown location, also rents space in Sydney Hall. Jungling’s business was on the same block before Sydney Hall was constructed.

Jungling said he didn’t notice a significant increase in rent when his business moved into Sydney Hall in 2010. There was only a small uptick because the new space was larger, he said.

“It went up a little bit, but it was pretty comparable,” he said. “It worked out well for us with a new stadium down the street and a new building. I was happy to pay a little more.”