The Minneapolis Park and Recreation Board voted 8-0 to deny giving Graco Minnesota Inc. exclusive development rights for Northeast Minneapolis riverfront parkland where it planned to expand its headquarters.

The board will now seek additional proposals for a parcel of the Scherer site intended for development, which would help pay for a future park.

As they noted in a previous committee vote, commissioners took issue with Graco’s two-phase headquarter expansion plans because it included too much surface parking, too few public amenities and wouldn’t generate enough rent for the future park. Despite the criticism, Graco did not have a different proposal for the board’s July 15 vote.

“I was a little surprised that they didn’t respond,” Commissioner John Erwin said. “I would rather see nothing go there for a period of time rather than see something that the community and the Park Board find unacceptable.”

The board is now seeking other proposals for about 3.6 acres of the 11.7-acre Scherer site, though Graco may also submit a different proposal. The company was planning two 50,000-square-foot office buildings to expand its riverfront headquarters in Northeast Minneapolis, in addition to a 133-stall surface parking lot.

The company, an industrial abrasive manufacturer, tried tying its expansion plans to negotiations for an easement of riverfront land where the board will extend its East Bank Trail.

The City of Minneapolis and commissioners contend that Graco agreed to provide the easement in 2000 when it received more than $1 million in tax-increment financing (TIF) from the city to expand its manufacturing facilities. However, the board and Graco didn’t agree on the terms of the easement.

Though the company recently uncoupled the issues, the board ignored Graco’s conditions related to the Scherer site, including a restriction on residential development on the parcel, and vacating 10th Street Northeast, which the company largely uses as a service road. The board moved forward with a condemnation request for the easement, which has been filed under a judge’s order. Commissioners also voted to set aside the easement’s appraised value of $622,300, but the exact cost is now being determined.

Following the board’s last meeting, Superintendent Jayne Miller said Council Member Jacob Frey (Ward 3), Council President Barbara Johnson (Ward 4), parks commissioners and planning staff have been in negotiations with Graco and developer Ryan Cos. Miller said they offered to support Graco’s conditions in return for the company providing the easement at no cost, in addition to keeping its headquarters and 90 percent of its living-wage jobs in the city.

While she said they initially received a good response, the company did not move on its plans.

“They were not putting anything differently forward that they didn’t put forward at the end of June,” she said.

Graco spokesman Bryce Hallowell could not discuss the company’s next steps. “We remain confident in our proposal and felt that it offered a great solution for development along the river,” he said in a statement.

The company could submit another proposal for the Scherer site, or open or expand its offices elsewhere. While Graco has its corporate headquarters in Northeast Minneapolis, it has expanded its operations in other cities before, opening facilities in Rodgers and Anoka, Minn. It also has locations in South Dakota and Ohio, as well as number of international facilities.

Michael Schroeder, assistant superintendent for planning services, told the board that staff will be seeking proposals from those more aligned with the board’s interests and planning goals.

“What we see before us is essentially what we started at three years ago,” Erwin said. “I’m excited to see what other options are out there and look forward to new proposals.”