What’s Happening with the Most Prominent Pieces of (Formerly) Underused Real Estate in the Twin Cities
For each of the last three years, MinnPost has taken a look at some of the region's most conspicuously underused parcels of land in the Twin Cities. Included were not necessarily the most high-profile sites, but places that had been vacant for a while, that seemed to be well located — and had the potential to transform a neighborhood, if done right.
For this year, we have decided to do something different: to revisit some of those previous picks to see which have been developed — and which are still waiting for something to happen.
Minneapolis has produced more of the completed projects, but also has its share of those that are still in the planning stages. St. Paul hasn’t seen as much development, though there's also a good reason for that. More of the west metro sites are single properties in private hands, while many of the St. Paul sites are larger, sometimes with multiple owners and often with a government role in their progress. Still, none have fallen off the radar of potential development sites and most are likely to be first-step catalysts for adjacent development.
The site: Superior Plating
The location: 1st Avenue NE and University Avenue NE
This site was once the home of a streetcar barn and then — for half a century — a metal finishing company, an operation that created a hazardous waste problem. With the help of Minnesota Pollution Control Agency grants, the site was cleaned up, but initial redevelopment proposals didn’t impress the neighborhood, which wanted high-quality, high-density development there. All of which eventually led to the recently opened NordHaus residential complex, which features a six-story lower rise building fronting the street and a 20-story tower to the rear. Together they offer 280 rental apartments, 22,000 square feet of retail and a space for a restaurant.
The NordHaus residential complex features a six-story lower rise building fronting the street and a 20-story tower to the rear. (Rendering by Lennar Corporation)
The project's developer, Lennar, has discussed building a second phase, which would involve another 26-story building and 260 apartments. Jason Wittenberg, manager of land use, design and preservation for the City of Minneapolis, said the developer has had informal conversations about the project with the Planning Commission but that there have been no applications for land use approvals submitted yet.
The site: the former home of the Nicollet Hotel
The location: 3rd Street South and Hennepin Avenue, downtown
There was a lot of excitement among the elected and city officials when they announced the winner of a competition to develop a choice-but-troubled piece of downtown property adjacent to the Minneapolis Central Library. A site that was once home to the elegant Nicollet Hotel had been purchased with federal transit money to become surface parking for a bus transfer center.
“Take a good, hard look out the window because it’s not going to look like this for long,” Mayor Betsy Hodges said of the lot in February of 2015. United Properties had been chosen for a mixed-use development that met all of the city’s demands: There would be a signature tower with public plaza space connected to the Skyway system, all positioned on the block to accommodate future streetcar tracks.
But if you looked at the site three years later, it looks pretty much the way it did that day in 2015 when Hodges made her comment. United Properties has been granted a series of extensions (at a price) to keep trying to put a deal together to develop the hotel and residential aspects of the tower.
A site that was once home to the elegant Nicollet Hotel has been purchased with federal transit money to become surface parking for a bus transfer center. (Photo by Peter Callaghan)
Emily Stern, a senior project coordinator with the Minneapolis Department of Community Planning and Economic Development, said the city is continuing to work with United Properties on the project, which includes plans for a 30-story tower with 300,000 square feet of commercial office space with Royal Bank of Canada as a potential tenant. Those negotiations are part of the reason the city council agreed to a third extension of United Properties’ $10.4 million purchase deal until the end of January, she said.
The plan also calls for a Four Seasons hotel on 11 floors and condominiums on the top three floors, and Sheila Thelemann, the vice president of marketing for United Properties, said the company hopes to have an announcement for a lead office tenant early next year.
The site: 2622 Lake St.
The location: north shore of Lake Calhoun/Bde maka ska
The Lakes Residences have now been open for nearly two years on a key location overlooking Lake Calhoun/Bde maka ska’s North Beach. That happened because Greystar, a national residential developer, finally came up with a plan that made financial sense and met the wishes of neighbors. The 90-unit, market-rate building rises eight stories along Lake Street but steps down to three stories on the Greenway and along Thomas Avenue.
The site: 100 Hennepin
The location: Hennepin Ave, between 1st and 2nd Streets North, downtown
The six-story Maverick Apartments have been open to tenants for nearly a year, complete with a Starbucks in one of two large retail/restaurant spaces fronting Hennepin Avenue. Along North 1st Avenue are a series of 13 walk-up townhouses, and the two buildings together — with nearly 200 units — wrap around a previously existing parking ramp, all of which neighbor the apartments that include the Whole Foods store and the Federal Reserve Bank. Developed by Shorenstein and Ryan Companies, the project managed to redevelop what had for decades been a surface parking lot in the part of town still known by some as the Gateway.
The site: the Minneapolis Farmers Market
The location: 322 E. Lyndale Avenue
We know there’s at least one kind of project that will not be built at the farmers market site, located between Target Field and I-94: a soccer stadium. The property was the site of choice for a stadium when Bill McGuire obtained a Major League Soccer franchise. But resistance from then-Mayor Betsy Hodges pushed McGuire into the arms of St. Paul. Today, Allianz Field is now rising in that city’s Midway area, on property that once held a Metro Transit bus barn.
So what of Minneapolis’ Farmers Market? As transit-oriented development sites go, this one has more potential than most. It is close to both downtown and the North Loop and it is near both the Blue and Green light rail lines, which could still be extended to Brooklyn Park and Eden Prairie respectively.
The Minneapolis Farmers Market (Photo by Peter Callaghan)
A study commissioned by the city reported a year ago that the city should make modest investments in the area but should wait for the outcome of planning for Southwest Light Rail before doing more. And the city has heard from developers who either own property in the area or are looking to acquire property that they are awaiting certainty regarding Southwest LRT before they do larger scale redevelopment. “We’re hopeful that when Southwest starts making some more measurable progress and seems more certain to happen shortly that development will follow,” said David Frank, director of economic policy and development for the City of Minneapolis.
But the Met Council announced last month that Southwest LRT will be further delayed by the need to build a barrier to separate light rail from BNSF freight rail (plus an environmental study on the impacts of such a wall). The agency now doesn’t expect to open bids for the project's largest construction contract until May, and doesn’t expect to be carrying passengers until 2023.
The site: the Washburn-McReavy funeral home
The location: the corner of Central Avenue and 2nd Street SE, Marcy-Holmes
This is a project that was once commonly referred to by the funeral home that sat at 200 Central Avenue since 1929. But that building has been demolished and the empty lot has been sodded as it awaits the result of another legal challenge, this one against the city grant of a variance to permit the construction of a 40-story condominium project by Alatus.
The project has the support of the Nicollet Island-East Bank Neighborhood Council but is opposed by Preserve Minneapolis and a group of residents from nearby condos, who have problems with the height and density of the proposed project. That group, Neighbors for East Bank Livability, has appealed a lower court decision that upheld the Planning Commission’s approval of the variance. Opponents have also argued before the courts that the height of the building damages historic resources in the neighborhood and violates the Minnesota Environmental Rights Act.
“The city is just waiting to see how that litigation is resolved,” said the city’s Emily Stern.
One of the more interesting aspects of the project is that Alatus is venturing into the condo market at a time when most multifamily in the city is rental. If it’s built, the project will have 214 units for sale.
The site: Kraus-Anderson headquarters
The location: Portland Avenue and South 8th Street
Construction is now well under way on a project that will eventually include a complex of buildings on a large downtown lot that once held a small office building and a ton of surface parking. Kraus-Anderson, the Minnesota-based construction and construction management company, had wanted to build a larger headquarters on the site that would have consolidated workers from around the Twin Cities. After some back-and-forth with the city about what could be done there, a project was approved that includes a five-story building to house KA's HQ, a 17-story apartment building along Portland Avenue, and an eight-story Marriott hotel. When completed, the block also will include a three-story Finnovation Center, a three-story Finnegan’s brewery, event center and a center to help startup social entrepreneurial businesses.
The site: the Ramada Inn
The location: just west of the Greyhound station, downtown
If you look carefully at the mostly vacant lot on Hawthorne Avenue across 10th Street from the Greyhound bus terminal, you can still make out the footprint of a building long-ago demolished: the former Ramada Inn. A Las Vegas-based company now owns that lot, as well as the one between Hawthorne and Hennepin Avenue.
The broker for the property, Nick Carmichael, said the status has not changed in the last year. A hotel developer has an option on part of the property and has been trying to work with city planners on a design. So far, however, it has not reached the point of moving forward.
Bordered by N. 11th and N. 10 streets and Hawthorne Avenue, the land once held a Ramada Inn. (Photo by Peter Callaghan)
Wittenberg said city staff has been in discussions with the development team, but the developers have not yet met with the Planning Commission and have not submitted applications for land use approvals.
The owners have to decide whether to give the hotel developer more time or to work instead with other potential buyers who want both lots, Carmichael said. He said they do, however, have some users who want to use the land during the Super Bowl for events.
The site: the Nicollet Avenue Kmart
The location: Lake Street and Nicollet Avenue
It might appear that the city is taking baby steps in reopening Nicollet Avenue. But while such steps might not seem like a big deal to observers, they are for the baby.
Minneapolis has now become the landlord of the Kmart that notoriously straddles Nicollet between Lake Street and W. 29th St. But Sears Holding Corp., which holds a lease on the store that still has 36 years to run, has not heard an offer from the city yet that would move it to allow the city to reconfigure the blocks and reopen the street.
“No movement,” wrote Darin Broton, a public affairs consultant who represents Sears locally. “The city hasn’t submitted anything to Sears Holding. They are hoping to have a conversation with the new administration once in place.”
This should be easier than it has been. Sears has been struggling nationally and has been closing and selling stores. In some locations, it has replaced larger stores with smaller ones similar to City Target stores.
But the Minneapolis store has a very generous lease dating back to when the city was desperate for development in the area. The city already owns the half of the property, and Frank said the city has tried to find a deal with Kmart and Sears that would relocate a new store on a reconfigured lot but Kmart “continues to tell us they are happy with their store, they want to be on site.”
“We took a serious run on trying to move them to a new store elsewhere on the property that would allow for the street to reopen but we are way, way apart on how much that was worth,” Frank said. “We will continue to try to make a deal with them. The thing the city has now bought is certainty that the street will go through. Of course, we’re just not sure when.”
The site: Calhoun Square
The location: the corner of Lake Street and Fremont Avenue
This fenced-in property just behind Calhoun Square shopping center and near some of the newest apartment buildings in Uptown looks a lot like it did a year ago. Also unchanged are the hopes the owner, Ackerberg Group, has for its potential. “It continues to be an amazing parcel for development,” said Stuart Ackerberg. “We’re still trying to figure out how and when and what we do there.”
Ackerberg said the recent development news involving the Sons of Norway building and adjacent property down Lake Street removes the other large potential development site in Uptown. But the addition of 600 new units in that project makes him concerned with the absorption of rental housing.
Ackerberg also said he is open to either developing the site or working with buyers. “We’re trying to figure out what’s the right time and what’s the right product mix there,” he said. “The good news is we’re running out of parcels. The uncertainty is will rents stay their level and continue to grow and will we see a dip in vacancies.”
The site: Rice Creek Commons
The location: east of I-35, Arden Hills
This massive site (about 320 acres of developable acreage) is better known as the Twin Cities Army Ammunition Plant, which once fabricated small arms ammunition. By comparison, the Ford Site in St. Paul is 135 acres.
Private developers weren’t initially interested in the site, and it was once the leading locale for a new Vikings Stadium before being purchased by Ramsey County in 2013 for $28.5 million. The county took the lead in the environmental cleanup (which cost $21.4 million). The marketing and management are now the responsibility a joint development authority with Arden Hills, and the whole site is now dubbed Rice Creek Commons. The land will likely be developed by Alatus, and the joint development authority is negotiating a master development agreement for an Alatus plan that includes commercial buildings, multi-family and single-family housing as well as 50 acres of parks, trails and open space. The site was also included in Minnesota’s bid for Amazon’s HQ2.
Sara Thatcher, a spokesperson for Rice Creek Commons, said the next deadline is March 8 for the two sides to decide whether progress is being made toward reaching an agreement. In the meantime, prep work continues on the site, she said. Work on surrounding highway infrastructure is underway or completed. Internal site construction will be put up for bid in 2018 and should get underway in 2019. Thatcher said initial construction of commercial and residential buildings could begin by 2020.
Ramsey County Commissioner Rafael Ortega said there are still some details to be worked out with the federal government, but said the overall plan is coming to fruition. As much as the county would like to recover its investment and put the land on the tax roles, he said commissioners are also interested in a good project. Development, he said, “all depends on the market. If you started today, they’d still be building in 10 years. People don’t realize how big it is.”
The site: the Ford plant
The location: Ford Parkway/Highland Park
It has been quite a year for the 135-acre site where Ford assembled cars and trucks for a century. After a decade of meetings and planning and studies and environmental remediation, Ford’s real estate division, Ford Land, finally placed the property on the market.
But before that could happen, the city had to draft and approve a zoning plan as well as a plan for what is called the public realm: streets, trails, stormwater and open space. The zoning calls for up to 4,000 residential units as well as commercial and retail spaces.
Proposed zoning and public realm plan for the Ford site. (From the Planning Commission for St. Paul City Council)
Objections to the development plan from some neighbors have been loud, aimed at densities, heights and traffic. The city council approved the bulk of the proposal in the fall and a move to put the matter on the ballot was rejected by the city council. Litigation is still possible.
Mayor Chris Coleman, who learned of the closure of the Ford plant after his first election but before taking office, celebrated the plan's approval, which coincides with his departure from city government. “The master plan passed this fall outlines a vision for the future — a site that integrates innovative environmental protections, multi-modal transit opportunities and affordable housing,” he said. “I can think of no finer bookend to my terms as mayor of St. Paul than this once-in-a-generation opportunity going to market.”
The site: Central Station
The location: 5th Street and Cedar Avenue, downtown
The Central Station location is what's been left behind from the construction of the Green Line through downtown St. Paul: the spot where the tracks make their diagonal crossing from Cedar Street to 4th Street East, and where a number of buildings had to be removed for the tracks and the station.
The vacant land, however, is in the middle of the city’s business-financial district and is seen as a key to adding commercial density and connecting the area to Lowertown. Ownership is in the hands of the city housing authority and the Met Council. Both agree it should be consolidated and sold. (The historic St. Paul Athletic Club is owned separately and will be retained on the block.)
“We’ve just approved a memorandum of understanding between the two of us how we’ll work through the pre-development and the sale process,” said former St. Paul Economic Development Director Jonathan Sage-Martinson, who recently left that job.
Central Station (Photo by Peter Callaghan)
The city has adopted design guidelines for whatever is built on the site and is moving toward marketing it to private developers. “The hope is to have it out on the market as soon as we can (in 2018),” Sage-Martinson said.
The city and Met Council will do appraisals and a market feasibility study before offering it to developers.
“It’s right in the middle of the job center of downtown and right on the busiest light rail stops for the Green Line,” Sage-Martinson said. “It’s a great site for a fairly large, iconic building and we have an expectation that there will be an office component and that it will likely be mixed-use — whether that’s retail, office and housing, there’s a mixture likely involved. We think it’s a special site and it deserves a special building.”
The site: West Publishing
The location: Kellogg Boulevard, overlooking the Mississippi River
If they unbuild it, will they come. Yeah, we’ve used that line before. But it remains apt for Ramsey County’s hopes of redeveloping a site that is potentially very cool but practically very awkward. Hugging the bluff between the heart of downtown and the Mississippi River, the site once included a series of seven buildings that held West Publishing before it moved to Eagan. Then it was a branch of county government. Oh, and a pretty homely county jail was built there as well.
All are now gone at great expense to the county: $15 million, not just for demolition but also to build a retaining wall to hold up the bluff. What remains is a nearly four-acre site with unobstuctable views of the river. There's also the potential of being tied into what the city calls the pedestrian River Balcony, which would link the buildings on the bluff to the river and downtown. Residential, commercial, retail and a hotel are all on the wish list.
View from the Wabasha Bridge of the West Publishing buildings and county jail at the beginning of demolition. (Photo from the Work Zone Cam)
A request for development interest was issued by the county in November with a schedule to select a preferred responder by the end of March and approval of a development agreement and final design by the end of September. “The preference would be mixed-use,” Ramsey County Commissioner Rafael Ortega said. “We need more retail activity so it’s not all residential. We need to bring some jobs downtown.”
But Ortega said the board is adamant in its desire to wait for the right project. “The vision is to increase the tax base and increase the economy but it should be an iconic site for the city. Would I sell it for a warehouse? No. We won’t sell it for the sake of selling it.”
The site: Seven Corners/Gateway
The location: Across 7th Street from Xcel Energy Center, downtown
Now that Catholic Charities is well on its way to building its new St. Paul center and new apartments and a hotel are open along West 7th Street, the lot across the street from Xcel Energy Center is even more … obvious? Now a parking lot with a grove of mature trees on Cleveland Circle, the site has been on the city’s development wish list for two decades. An agreement between the city, its housing and redevelopment authority and Opus Development Co. includes plans for a hotel, residential and retail development. But that was signed three years ago. “It’s getting closer and closer,” Sage-Martinson said. “Opus is looking at an early spring start.”
The components are the same as they were in 2014, including a hotel, housing with entertainment and retail on the ground floor and a privately owned but publicly accessible plaza across from Xcel, though the developer is now working with a new hotel partner. “It’s really important to that portion of downtown,” said Sage-Martinson. “We have so many visitors coming to the Xcel Energy Center. It would really create a wonderful development there with an iconic public space. It is important for the expansion of the entertainment district down West 7th. The connections to the hospital and to Travelers and Ecolab.”
The site: West Side Flats
The location: Just east of Harriet Island
Between the Wabasha and Roberts Street bridges across the Mississippi River from downtown St. Paul is an open area historically known as the West Side Flats. In recent years, city planners and some pioneering developers have been reclaiming the land for residential projects with a master plan that calls for the restoration of a traditional street grid and a district stormwater system that also provide green space and trails. “West Side Flats is a big site with a couple of different moving parts,” Sage-Martinson said.
In mid-December, the city’s housing authority approved bonding to help fund one of two buildings planned by Sherman Associates on the riverfront edge of the site. Sherman has plans for two buildings: a market-rate building with 182 units and an affordable housing building with 82 units. The affordable building is what the city is helping finance and it will be built to ultra-high energy efficiency standards. Both are expected to start construction in 2018. Sherman Associates opened the West Side Flats apartments along Wabasha in 2012.
West Side Flats (Photo by Peter Callaghan)
Weidner-Hunt, a partnership of two developers, has proposed a 600-unit building on the Plato Avenue edge of the core of the West Side Flats’ 40 acres. The city is negotiating a development agreement with the partnership and Sage-Martinson expects that be completed in 2018.
The site: the St. Paul Sears
The location: just west of the state Capitol building
Sears is fighting through the same challenges facing traditional retail as most other companies … only worse. It has closed dozens of stores and in an attempt to make money off the real estate it holds across the country, it spun off real estate investment trust called Seritage Growth Properties, which bought Sears and Kmart land and stores for $2.5 billion and leases them back to the retailer.
Seritage is trying to market those stores and the land around them to developers. In some cases, Sears stays on site with smaller stores. Sometimes it does not.
One of the properties that Seritage is marketing is the two-story Sears off I-94 near the state Capitol complex. There have been no announcements about the redevelopment of the 17-acre-site, which sits close to I-94 and the Green Line with views of the state Capitol, the Cathedral of St. Paul and the downtown. “From what we know they’re still exploring the market, looking for opportunities,” Sage-Martinson said of Seritage.
Nick Carmichael, a St. Paul-based real estate broker, said he has contacted Seritage on behalf of clients who are parking lot operators. Their interest is in the parking lot closest to the state capital buildings that is already leased out to capital parking clients. “They were respectful and cordial but the answer was ‘not now,’ ” Carmichael said.
Darin Broton, a government affairs consultant who has been working with Sears on the Minneapolis Kmart site said he has heard nothing about the St. Paul store. The company, however, has been experimenting with smaller footprint stores. “That is something that could work at both sites in a redevelopment,” Broton said.