Central Corridor related redevelopment well underway

A plan was announced in December for American Bank to sell its building at University and Snelling to Minneapolis-based Semper Development, which develops stores for Walgreens. With about 50 commercial, retail and housing developments in various stages of development along the Central Corridor light line, it appears that the promised transit-oriented development is well underway. (Photo by Stefanie Berres)

By JANE MCCLURE

With about 50 commercial, retail and housing developments in various stages of development along the Central Corridor light line, it appears that the promised transit-oriented development is well underway. How that continues to unfold could affect area neighborhoods almost as much as the past few years of rail construction have.

The projects are expected to bring new buildings, new jobs and more than 5,100 housing units. The Central Corridor Management Committee reviewed the projects in December. Projects discussed are either completed, under construction or in the planning stages.

St. Paul Planning Director Donna Drummond said the city positioned itself for redevelopment with the Central Corridor Development Strategy, a comprehensive plan for future land uses all along University Avenue. That plan was followed by a zoning study, which was implemented in 2011.

“We did a lot to prepare for redevelopment and that has paid off,” Drummond said. The strategy and many of the zoning changes it led to are meant to promote transit-oriented mixed use development. Areas around transit stations are a key focus of the plan.

“Transit-oriented development is a major focus of the Metropolitan Council. We’re pleased that the new projects along the Central Corridor rail line are providing residential and commercial opportunities up and down the line so that individuals can live and work on Central Corridor,” said Metropolitan Council Chair Susan Haigh. One goal for redevelopment is to increase population density along the rail line.

“It’s exciting to see projects take shape,” said Metropolitan Council Member Jon Commers. He chaired the Planning Commission during much of its work on Central Corridor-related zoning and land use planning.

Most of the developments thus far haven’t encountered staunch community opposition. Most have gone forward with support from area district councils and business advocacy groups including Midway and St. Paul Area Chambers of Commerce.

“I think what we’re seeing is positive and has met a good response from the community,” said Anne White, chair of Union Park District Council’s Land Use Committee. That neighborhood is seeing redevelopment including the new 25,000 square foot Habitat for Humanity headquarters at the southeast corner of University and Prior avenues, and the expansion of the Episcopal Homes campus at University and Fairview avenues.

But there are a few red flags. In Hamline-Midway neighborhood, some residents were unhappy with the Midway Commons development on University north of Midway Center, saying they wanted to see a larger, mixed-use development. It includes a Culver’s restaurant, which opened last year, and a 10,000 square foot office/retail building that is still being renovated.

A more recent concern is a plan announced in December for American Bank to sell its building at University and Snelling to Minneapolis-based Semper Development, which develops stores for Walgreens.

Another issue being raised is how all of the new development benefits the property tax base. Jack McCann, president of University Avenue Business Association (UABA), said some of his group’s members question the amount of nonprofit development proposed along University. “Redevelopment is great and in some places it is needed, but we have to ask what that does to the tax base and how those costs are spread out among the other property owners.”

Frogtown Neighborhood Association Executive Director Tait Danielson-Castillo said there are concerns in his neighborhood about a focus on affordable housing. Some residents welcome the idea of new affordable units right on University, convenient to transit, jobs and shopping. But others question whether Frogtown, Summit-University and Aurora-St. Anthony already have their share of affordable units.

“In some ways that’s a balancing act,” said Danielson-Castillo. Residents in that neighborhood are also concerned about so many nonprofit developers and the tax base implications.

The number of nonprofit developers, especially east of Lexington Parkway, is something city officials are mindful of, Drummond said. That may be a function of where clients for programs and service live.

City officials expect overall that Central Corridor-related economic development will be a boon to the property tax base. Corridor management committee members said that is a trend that bears watching.

Committee members are also interested in tracking the number of development-related construction jobs, as well as permanent jobs created through redevelopment.

Another issue being watched is how redevelopment is financed. The Metropolitan Council has awarded nearly $8 million in various grants to help with site design and acquisition, environmental investigation and cleanup, demolition or public improvements.

The grants have been in the form of Livable Community Development Account (LCDA) grants and Tax Base Revitalization Account (TBRA) grants.

Jim Stolpestad, chairman of Exeter Realty, said light rail is the reason his company is developing the Chittenden & Eastman building near the Raymond Avenue Station. The building, which was constructed in 1917 as a furniture warehouse and store, will become the C&E Lofts historic apartments. The market-rate apartment building project has been recommended for $128,000 in TBRA funding to assist with asbestos and lead-based paint removal abatement. The Met Council will vote Jan. 11 on the grant.

“We would not be there trying to do something with that property had it not been for the light rail line,” Stolpestad said.

Funding for many of the proposed projects is an ongoing challenge city officials acknowledge. While Metropolitan Council can offer grants, city of St. Paul assistance is limited largely to tax increment financing (TIF), Neighborhood Sales Tax Revitalization (STAR) and other grants. The city has an affordable housing trust fund, but at most that could provide only several hundred thousand or even $1 or $1 million toward a project.

“For the size of projects we’re talking about, all of which are good and worthwhile projects, this would just be a drop in the bucket,’ said Council President Kathy Lantry.

Yet another issue, raised by the development group University UNITED, is to not ignore the need to preserve the city’s industrial land base. “All of the development we’ve seen happen so far is positive but we can’t forget the need for manufacturing, especially green (environmentally friendly) manufacturing and jobs,” said UNITED Executive Director Brian McMahon. “It’s often been said that St. Paul can’t become a city of condos and coffee shops. We need to remember how important it is to promote job creation, especially in areas with good transit access.”

Of the projects recently touted in a Metropolitan Council press release, not all can be ascribed directly to the light rail line. One listed project that raised eyebrows was the newly opened Regions Hospital mental health facility, a $63 million, 100-room hospital addition.

Some of the downtown St. Paul housing projects, for example, probably owe as much to former Mayor Randy Kelly’s Housing 5,000 initiative as they do to light rail. For example, what is now the market-rate, 58-unit Lofts at Farmers Market apartment building at Fifth and Wall streets was discussed for many years before the site was developed. While the apartments have been quickly snapped up, its 3,500 square feet of commercial space is vacant. This project received $361,000 in LCDA funds.

Other renovated or new downtown St. Paul mixed-use buildings near the rail line include the Minnesota Building, Renaissance Box, the Penfield and Commerce Apartments.

One developer with two projects along University is Episcopal Homes. The senior housing and services provider was a partner in Frogtown Square/Kings Crossing at Dale Street and University. This building has 11,000 square feet of retail and 50 units of senior housing, Episcopal Homes is also planning to expand its University and Fairview campus, building on the former Porky’s restaurant site.

Other projects are in the planning stages. Project for Pride in Living plans to build about 120 units of housing and 13,000 square feet of retail on the former Midway Chevrolet site at University and Hamline. This project was awarded $750,000 in LCDA funds in December. Redevelopment of the former Old Home Dairy site at the southeast corner of Western and University is also on the drawing board, with new housing and commercial development.

Minneapolis and the University of Minnesota area also have more than 20 housing and commercial developments along Central Corridor, including several warehouse to housing conversions.

Opus Development Corp. has more than $125 million in new development on the light rail corridor with the Stadium Village Flats near Stadium Village Station at the University of Minnesota and Nicollet Residences at Nicollet Mall Station in downtown Minneapolis.