The troubled Key Inn will soon be no more.

Woodbury City Council approved an application Wednesday evening for Minneapolis-based Lupe Development Partners LLC to redevelop the southwest corner of Valley Creek Road and Woodlane Drive. Plans include demolition of the motel, located at 1806 Wooddale Drive, along with a multi-tenant office building at 6949 Valley Creek Road.

Key Inn is "one of the largest generators of calls for police service" in Woodbury, according to city documents.

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The motel and existing office building were determined to be "functionally obsolete and structurally substandard" after an evaluation by engineering firm LHB. The structures, along with many of the surrounding office buildings, were constructed in the late 1970s and early '80s.

The company's proposal includes a fast food restaurant with a drive thru and a multi-tenant retail building in the north area closer to Valley Creek Road. A 34,000-square-foot medical building would replace Key Inn in the south area off of Woodlane and Wooddale drives.

“The Valley Creek project is a once-in-a-generation site assembly opportunity in a high-demand market,” said Steve Minn, vice president and chief financial manager of Lupe Development, in a news release. “The city of Woodbury has a forward-thinking vision for more employment, retail and services at this key site and we are enthusiastic about the project’s ability to meet that vision.”

Early renderings of buildings planned for the Valley Creek redevelopment project. Top: a 34,000-square-foot medical building; bottom: a multi-tenant retail building containing a fast food restaurant, a credit union and space for other retail. Courtesy of the city of Woodbury
Early renderings of buildings planned for the Valley Creek redevelopment project. Top: a 34,000-square-foot medical building; bottom: a multi-tenant retail building containing a fast food restaurant, a credit union and space for other retail. Courtesy of the city of Woodbury

Two small office buildings located at 1800 and 1802 Woodlane Drive will also be "significantly renovated."

City planner Eric Searles said at a recent Planning Commission meeting that surrounding businesses were supportive of the plans, which the city hopes will be a "catalyst" for further redevelopment south of Valley Creek Road.

The city had "positioned this area for redevelopment" while forming the 2040 Comprehensive Plan, he said.

"We are pleased that Lupe was able to assemble the various properties and are excited to transform this ‘gateway’ area into a vibrant new commercial development," Searles said in the release.

Cowboy Jack's at 1690 Woodlane Drive is not part of the current redevelopment plan.

Work on the site, including demolition, is set for spring 2020. The first buildings are scheduled to open in September.

City administrator Clint Gridley commended community development staff for their work in finding redevelopment partners.

"This has been a long process. A lot of work has gone into it," he said at the Oct. 9 City Council meeting. "We're very excited about this possibility to redevelop a part of Woodbury that this will be very beneficial for."

Mayor Anne Burt echoed Gridley's words.

"Now go celebrate," Burt told city staff.

Reputation for criminal activity

The motel became Key Inn after the Red Roof Inn chain terminated a lease agreement with the location in 2016. Though its owner hoped for a new start at the time, the newly-minted Key Inn continued to draw the ire of residents for its reputation as a crime hub.

A map showing the location of the Valley Creek redevelopment project. The areas outlined in blue indicate zones slated for redevelopment in spring 2020. Courtesy of the city of Woodbury
A map showing the location of the Valley Creek redevelopment project. The areas outlined in blue indicate zones slated for redevelopment in spring 2020. Courtesy of the city of Woodbury

The first high-profile incident may have occurred in August 2012 when Demetrius Ballinger held 11 people at gunpoint and raped several young women at the motel. Woodbury police shot and killed Mark Henderson, 19, as he attempted to escape the hostage situation.

A lawsuit filed against the city by his mother, Tawana Henderson, was settled in April. Ballinger was sentenced in 2013 to 36 years in prison for five separate counts, including attempted murder and rape.

The release of data from the Woodbury Public Safety Department shortly after the 2012 incident prompted calls for the motel to be shut down from concerned community members. Up until Aug. 12 of that year, when Ballinger committed his crimes and Henderson was killed, police had been called to the motel more times than the city's five other lodging establishments combined.

The motel was also the site of underage sex trafficking stings conducted by Washington County and Woodbury public safety in 2014 and 2015, which resulted in the arrests of more than a dozen men.