Two lawsuits challenge St. Croix River development proposals

Legal filings claim Osceola and Hudson violated state laws in approving buildings taller than allowed.




6 minute read

Lakefront Park, Hudson, Wisc. (jpellgen/Flickr)

A pair of lawsuits filed in recent weeks challenge the approvals of large apartment buildings on the edge of the St. Croix River. The suits target the Osceola Bluffs development in Osceola, and the Reuter Walton project in Hudson. Although filed by separate people and organizations concerning separate projects, the legal filings highlight concerns about how local governments are fulfilling legal commitments to protect the river and its historic communities.

Both suits allege that elected officials violated Wisconsin state law in approving the respective projects. They primarily point to a Wisconsin regulation enacted in 1980 to specifically protect the Lower St. Croix National Scenic Riverway, designated in 1972.

N.R. 118, Standards For The Lower St. Croix National Scenic Riverway, sought to “reduce the adverse effects of overcrowding and poorly planned shoreline and bluff area development” among other goals, and was enacted to fulfill the state’s obligation to protect the federally-designated Wild and Scenic River.

The Osceola project would include 99 residential apartments, a restaurant and retail space at the former hospital site on the edge of the village’s historic downtown. It is being proposed by Gaughan Companies of Forest Lake, Minnesota. The Hudson proposal calls for 109 apartments, in addition to a ground level commercial space and fitness center, adjacent to the city’s Lakefront Park. It’s being proposed by several partners led by Ron Gagnon of Hudson.

Both projects also required multiple variances from city officials to get past restrictive ordinances. Environmental groups say the officials ignored their responsibilities to the river in approving the projects. Long-time river advocate Peter Gove, who is not party to either legal action but knowledgeable about the filings, said the lawsuits are important.

“Kudos to the Wild Rivers Conservancy and St. Croix Scenic Coalition in urging the courts to enforce the riverway setback and height rules put in place more than 50 years ago to safeguard the experiences of those enjoying this protected border river,” Gove said.

Hudson height

Preliminary illustration of the proposed Reuter Walton development in downtown Hudson, viewed from the intersection of Second Street and Wisconsin Street. (Reuter Walton/ESG)

The Reuter Walton development project is on land owned by Ron Gagnon. The property was previously the site of Associated Bank and its parking lot. Proposed to occupy the entire city block, with the edge of the building up to the edge of the sidewalk on all sides, it will face both Second Street, Hudson’s main drag, and First Street, across which is Lakefront Park and the St. Croix.

Because the proposed site is in the Lower St. Croix National Scenic Riverway, it is subject to state and federal laws and local zoning intended to protect the river. Due to its height, mass, landscaping, and other components, the project needed eight variances from the city of Hudson.

Both the Wisconsin Department of Natural Resources and Wild Rivers Conservancy wrote to the board expressing their concerns and opposition. Both letters pointed out that construction can happen on the site without the variances, saying the developer chose to pursue a large structure out of place and in violation of laws.

“Nothing justifies why a 4-story building is a necessity. As presented the reasons are largely a circumstance or desire of the applicant, not an issue with the property,” wrote Mike Wenholz, DNR shoreland program coordinator. “The department recommends this request be denied.”

Nonetheless, after postponing the decisions last fall, Hudson approved the first variances in May of this year. At the time, it denied the variance allowing the building to be 12 feet taller than allowed. Then, in early July, the city approved the other requested variances — and reversed its earlier denial of the height variance. The building would be 52 feet tall, plus another five feet for an elevator structure on the roof.

Wild Rivers Conservancy recently filed a lawsuit against the city to overturn the permits.

“We do not take lightly the need to take legal action against any community,” said Deb Ryun, the group’s executive director. “But communities must know that we are serious about requiring that they respect the values stated in N.R. 118.”

In its filing, the organization says Hudson didn’t correctly calculate the building’s height, located on a hill. While it’s required to use a method of averaging the ground elevation and determining the maximum allowable height based on that, the board accepted the developer’s calculations based on a higher elevation.

“The Board based its approval upon a finding that the slope of this property is unique, which is patently untrue and not supported by the evidence,” the group wrote. “The Board found that the ‘unique’ slopes allow the use of an ‘alternate’ method to measure height, which shows again the Board’s disregard for the Ordinance standard that explicitly specifies the manner in which height is to be established.”

The suit was filed in St. Croix County court by Hudson attorney Einar Hanson of Strobel & Hanson law firm, who is a board member of Wild Rivers Conservancy and whose office is across Second Street from the proposed development. The city of Hudson has until Sept. 24 to respond to the lawsuit.

Osceola opposition

Mock-up of Osceola Bluffs apartment building (Courtesy Gaughan Cos.)

The proposed Osceola Bluffs development has been the subject of significant debate over the past few years. The village board approved the proposal in late July despite significant community opposition at public hearings and council meetings.

Similar in size and design to the Hudson proposal, Osceola Bluffs would have about four floors above grade and underground parking, as well as a restaurant and retail space on the ground floor. The village board both revised its zoning ordinances and issued three variances to make the proposed project possible.

On August 10, the St. Croix Scenic Coalition and several Osceola residents filed suit to stop the project.

”Plaintiffs do not oppose development within the Village, however, Plaintiffs oppose development which substantially impairs the natural, scenic, and historical qualities of Osceola and the St. Croix River,” the filing said.

The organization claims elected officials violated the same law as in Hudson: N.R. 118. In particular, the lawsuit is focused on whether or not the building would be “visually inconspicuous” from the river, as required. They say it will in fact be conspicuous, and should never have been approved.

“Based on engineering data provided by the Village and on visual evidence provided by the developer, [we] contend the developer and Village of Osceola (together) have manipulated ground elevation data in an effort to shoehorn in a building that is simply too tall to be compliant with N.R. 118 and the 1972 Lower St. Croix Wild and Scenic Rivers Act,” said Bill Nueman of the St. Croix Scenic Coalition.

While the village’s planning commission approved two of three needed conditional use permits, it did not approve the permit to allow the building to be up to 45 feet tall; the developer says its structure will top out at 44.5 feet.

The lawsuit claims Gaughan Companies provided “incomplete and/or misleading” information to downplay the development’s visual impact on the river. The St. Croix Scenic Coalition also says the village used incorrect elevation information to calculate the building’s height, letting it sneak under the limit. Calculated correctly, the building will be 51 feet and three inches tall on the side facing the river.

Despite this, on June 13, the council accepted the planning commission’s recommendation to approve the two permits, and then overruled the commission and approved the height permit.

The St. Croix Scenic Coalition is asking Polk County judge Daniel Tolan to reverse the board’s approvals for the project, and block any further action on the development “until the Developers provide adequate support, subject to input from the public and interested parties, about the Project’s anticipated financial impact on the Village and its residents, and the anticipated impact on the natural, scenic, and historic qualities of the Village and the St. Croix River.”

Nicks and cuts

The wild bluffs of the lower St. Croix River. (Greg Seitz/St. Croix 360)

The Hudson and Osceola proposals come on the heels of a controversial and ultimately withdrawn riverside project in St. Croix Falls last year by Stillwater-based Green Halo. With populations growing and expanding geographically, and developers seeking high-value locations, there is enormous pressure on the St. Croix River, at the edge of the Twin Cities metropolitan area.

Each proposed development has evoked repeated quoting of former vice president Walter Mondale’s words about the future of the St. Croix, that its biggest threat is “a thousand nicks and cuts.”

Advocate Peter Gove, who worked closely with Mondale and many other notable river defenders over his career, called for strict enforcement of river rules and regulations. He also said “Mondale would be furious,” and called out inaction by the two states.

“Osceola and Hudson officials seem eager to support the financial returns for two Minnesota developers over the experiences for decades to come of the hundreds of thousands of annual river users as well as project neighbors,” Gove said. “The Wisconsin DNR has been timid in their review of the Osceola proposal and the Minnesota DNR has been silent on both.”


3 responses to “Two lawsuits challenge St. Croix River development proposals”

  1. Sue Ames-Lillie Avatar
    Sue Ames-Lillie

    I don’t understand how and why this even got so far! The rules and regulations were put into effect many years ago to protect the St Croix River and its shorelines. Why does big business have any more right to ignore the laws than the average person who wants to build on their own property, but can’t due to the laws?

  2. Irene Qualters Avatar
    Irene Qualters

    Great article, Greg. Thank you.

  3. Michael Miller Avatar
    Michael Miller

    It is a relatively simple exercise to generate a 3d computer model of the river, landscape, and the proposed buildings. If the buildings are not significantly visible from the river, a variance could be considered. If visibile, current law should be followed.


You may republish this article online or in print under our Creative Commons license. You may not edit or shorten the text, you must attribute the article to St. Croix 360 and you must include the author’s name in your republication.

If you have any questions, please email


Creative Commons License Attribution-ShareAlikeCreative Commons Attribution-ShareAlike
Two lawsuits challenge St. Croix River development proposals