A proposed 40-story condo tower along the banks of the Mississippi River faces another delay.

A Hennepin County district judge issued a stay that temporarily prohibits Twin Cities-based Alatus from tearing down a 90-year-old building to make way for the tower while Neighbors for East Bank Livability, a neighborhood group, appeals an earlier decision allowing the demolition.

As a condition of the stay, the neighborhood group posted a $100,000 surety bond.

Last week’s decision involves one of several attempts by neighbors to block construction of the 214-unit tower, which would occupy a quarter-block site that’s owned by Alatus.

That site is at the corner of Central Avenue and 2nd Street SE. in the Marcy Holmes neighborhood, which for decades has been occupied by a Tudor-style building that was once the St. Anthony Falls Commercial Club but most recently was a Washburn-McReavy Funeral Home.

Just across the Mississippi River from downtown Minneapolis, the building site is in an area that is dominated by low-rise storefronts built in the early 1900s. Because of its proximity to downtown and its strong sense of place, the area has been popular with developers who have already built hundreds of new rental apartments.

In 1971, a wide swath of neighborhoods on both sides of the river was included in the St. Anthony Falls Historic District, a national designation that restricts various aspects of development in the area, which includes St. Anthony Falls and the saw and flour mills that it once powered.

In November, Alatus planned to begin demolition of two buildings on the site, including the Tudor-style building. Neighbors for East Bank Livability, or NEBL, contend the building contributes to the historic district.

Late last year, William Griffith of the Larkin Hoffman law firm filed an appeal on behalf of NEBL, which has pursued two sets of claims that are focused on demolition of the building and the project’s incompatibility with multiple guidelines that govern development in the St. Anthony Falls Historic District and Marcy Holmes.

In September, the Minneapolis Planning Commission granted Alatus a conditional-use permit and variances to exceed overlapping regulations that limit height and density limits in the area.

NEBL contends that the approval is an “extreme departure” from the city’s own regulations, and would set a “dangerous precedent placing historic and residential districts across Minneapolis at risk.”

The group contends that by approving the project, the Planning Commission overruled the Minneapolis Heritage Preservation Commission, which rejected the zoning variance based on the height of the 483-foot tower.

The narrow tower will set atop a broader base that will include a lobby, parking, housing and retail.

The tower will have 40 floors of living space. A penthouse and elevator mechanicals extend an additional two stories.

At a court hearing late last year, Judge Daniel Moreno ordered the parties to a trial that would have happened in March. But it was canceled and the claims related to demolition of the structure, which were brought about as a Minnesota Environmental Rights Act (MERA) claim, were dismissed in a series of summary judgments. MERA is a state statute aimed primarily at protecting natural resources, but resources with historic designation have also been under consideration under the act.

NEBL appealed to the Minnesota Court of Appeals challenging the dismissal.

Jim Buchta • 612-673-7376