A local company thought to be considering moving out of Austin due to flood concerns is going forward with an addition — a sign that the business may be in fact staying put.

Austin Packaging Company, 1118 North Main St., will be adding on roughly 8,900 square feet to the building’s northeast corner for storage and loading, a project that will cost the company approximately $450,000.

Because APC rents the building from the Austin Port Authority, the project needed the authority’s approval, though the authority will not be funding the expansion. The approval was granted unanimously on Wednesday.

Following a major flood in Austin in 2008, several companies, including APC, were forced to shut down for hours or days. Gov. Tim Pawlenty, who submitted a major disaster declaration for the area, wrote that “delays in planned mitigation projects may lead at least one large local company to relocate,” referring to APC.

Such a mitigation project has been planned out, but some funding still needs to be secured. That project would entail construction of an “invisible wall” on Main Street, combined with a road raise that would lift the street up. The invisible wall would be filled in with planks if a flood became imminent.

This approach, which would leave the best sightlines of the Mill Pond from Main Street, is favored by City Council, and on June 7, council authorized an engineer’s assessment in the area — a necessary step in going forward with the plan.

The wall is part of a bigger group of flood-related projects that are slated to cost roughly $9 million. City engineer Jon Erichson said the city has committed $3.75 million from its local-option sales tax program, which was created specifically for flood mitigation, toward that figure. Another $3 million came via a Minnesota Department of Natural Resources grant.

However, the last chunk of funding has not been secured. The city has been trying to obtain a $2.5 million federal grant, but to date, no funds have come Austin’s way.

Though the last bit of funding remains in doubt, Erichson said his department’s goal is to break ground on the wall this year and finish it sometime in 2011, possibly with the help of state bonding dollars.

With the city getting closer to building the wall, APC’s expansion plan seems to indicate a belief on the part of the company that future flood problems should be minimal.

“I think they would truly like to stay in Austin and utilize the current facility,” city planning director Craig Hoium said Wednesday.

Port authority news and notes

Two Austin Main Street Project plans received conditional approval Wednesday, and both would bring residential space to downtown.

The renovations would bring second-level apartment space to Marty’s Hobbycraft building, located at 416 Main St., and to the Nemitz building, at 407 Main St. Marty’s Hobbycraft is currently vacant due to damage sustained in the January 2009 fire, while the lower level of the Nemitz building houses a retail tenant.

With the Marty’s Hobbycraft project, the idea is to get a tenant in the lower part of the building in addition to renting the second level. Details on who the tenant could be have not been disclosed.

Combined, the projects would cost $600,000, with funding coming from the Main Street Project, state loans and the owners.

City Council would need to approve of a technical modification to a state grant agreement for the projects to go forward.

Council next meets on Monday.

The port authority agreed to purchase a building located at 1805 14th St. NE for $200,000. No specific use or tenant has been identified, although the city is looking at partnering with the Development Corporation of Austin, which reported Wednesday that a tenant is likely to be in the building by the end of summer.

Further details were not provided.