strong local economy : Development News

Under new ownership, the Radisson University Hotel near the University of Minnesota campus in Minneapolis will soon be re-imagined as an "upscale, independent, lifestyle" destination, according to Susan Weinberg, the university's director of real estate.

Recently the university's Board of Regents approved a new 50-year lease on the land, the Minnesota Daily reports.

The 1985-built hotel has 304 guest rooms, more than 20,202 square feet of meeting space, and a fitness center, according to a Minneapolis/St. Paul Business Journal story from late last year. An Applebee's restaurant, University Lounge wine bar, Great Clips, Starbucks Coffee, and a TCF Bank branch are housed in the building, it states.

Platinum Equity, a California private equity firm, plans to renovate the entire place, from top to bottom, including guest rooms, public spaces and conference rooms, though the specifics are unknown at this time, Weinberg says.

She hopes that the changes "will better serve the university community."  

Improved conference facilities, more attractive rooms, and a good mix of first-floor retail could generate higher occupancy rates, which is to the school's benefit, she says. The university frequently hosts events in the hotel's conference spaces and it puts up faculty and staff recruits and visiting athletic teams at the hotel.

She says the university has been advised that Platinum Equity will spend more than $6 million upon acquisition of the hotel, which sits on college property. Minneapolis-based Maddux Hotel Corp. is the current owner, she says. Richfield Hospitality Inc., from Denver, will run the hotel.

The hotel is likely to get a new name, but that's still up in the air, says Weiberg, adding that renovations will need to wrap up by the spring of 2014 when the Central Corridor Light Rail Transit line, which will run through campus, will be operational.  

Once the purchase agreement is closed on, "There'll be a lot more information," she says.

Source: Susan Weinberg, director of real estate, University of Minnesota
Writer: Anna Pratt

As the University of Minnesota's Lind Hall in Minneapolis approaches 100 years, the College of Science and Engineering is making plans for the building's future.

The $6 million renovation involves a full reworking of the school's layout, while also maintaining its historic integrity, according to Paul Strykowski, who is a professor of mechanical engineering and associate dean of undergraduate programs at the college.

He says the place needs to be more inviting to potential students and better serve undergraduates. "This is a way to say that they're incredibly important, by investing in resources to make the space nicer."

The building's new layout reflects changing thinking about how to prepare students for the workforce, he says.

For example, while students need solid math and science credentials, they should also develop their creative, artistic, and leadership abilities.

In the past, students took a bunch of classes and didn't start looking for jobs until they were seniors. "That compartmental way of thinking isn't helpful," he says. "It's more important to help students early on," while taking a more holistic approach.

Advising and career planning offices have been brought together to help people they "find out 'what can I do with this, what kind of future might I have,'" he says.  

A welcome area will make it easy for prospective students and their families to explore careers and tour campus. "It's important to explain what everything means and to have it all in one place, that shows what we're trying to accomplish," he says.  

Electronic signage and other kinds of technological tools that will be donated by 3M will inform students about exam times, scholarships, and meetings.

Additionally, the building will have spaces for student organizations, including shared conference rooms that facilitate collaboration.  

In general, the building will be more open, with glass walls that let people see what's going on and "create community and energy around these [science and engineering] fields."

The school hopes to break ground early this summer and construction could take six to nine months, he says.


Source: Paul Strykowski, professor of mechanical engineering and associate dean of undergraduate programs
Writer: Anna Pratt

Right now a good portion of the Cowles Center for Dance and the Performing Arts in downtown Minneapolis is still under construction, but much of the structural work is done. 

The $40 million project brings together the Hennepin Center for the Arts and the former Shubert Theater, with a newly constructed atrium connecting the two historic buildings.

It's complementary to the Hennepin Theatre District, which includes several historic theaters farther down Hennepin Avenue. 

Construction at the center started January 2010 and will continue through this summer, while a grand opening is planned for September 2011, according to Troy Linck, a center spokesperson, who adds that its progress is being documented on its website and on social media sites.

The Cowles Center includes a 500-seat theater in the renovated Shubert building and a new Entry Hall, while all kinds of arts programming will continue to operate in the renovated Hennepin Center for the Arts space. "It'll be a diverse experience walking through the three-building campus."   

For starters, the historic Shubert theater, which moved from 1st Avenue to Block E over a decade ago, is being fully refurbished. "A lot of stuff needed serious work," he says, including a reconstruction of the balconies.

Although the design is intended to respect the historic structure, because the Shubert was gutted previously, the renovated building will be quite state-of-the-art, he says.

At this point, most of the concrete work in the building is done. "Workers are framing out the walls and sheetrocking as we speak," he says.

Similarly, inside the new lobby and atrium, where the box office will go, "you can get a feel for the space when you go in now, instead of it being a big empty room," he says.

The education center on the second floor of the atrium has a spacious dance studio and rehearsal area that'll be equipped with state-of-the-art technology. Through its distance-learning program, dance experts teach classes that are recorded and streamed to viewers outside the room, live--a feature that's unique to the center. "There really isn't any other program like it," Linck says.   

At the same time, a big picture window will offer passersby a view of rehearsals. It's just another way of demonstrating that "dance at the center is living and breathing," he says.

Additionally, offices throughout the Hennepin Center for the Arts part of the complex are undergoing plenty of cosmetic improvements. "Tenants are excited," he says. "The space looks better and everything feels sharpened up."

Source: Troy Linck, spokesperson for the Cowles Center for Dance and Performing Arts 
Writer: Anna Pratt

When the TLS/KVA team of landscape architects and designers strolled a 5.5-mile stretch of the Mississippi River starting at the Stone Arch Bridge in Minneapolis and heading north, they climbed over fences to get a better view of the landscape. It almost got them arrested for trespassing. 

TLS/KVA is a partnership between the Berkeley-based Tom Leader Studio and Kennedy & Violich Architecture from Boston.

Sheila Kennedy, one of the team members leading the charge, says too much of the river is off the beaten track. "We felt the river edge is where people should be," adding, "It's so difficult to get there now."   

TLS/KVA, which has a partnership with nine local firms, was announced as the winner of the Mississippi Riverfront Design Competition on Feb. 10. The contest, jointly held by the Minneapolis Park and Recreation Board, Minneapolis Parks Foundation, Walker Art Center and University of Minnesota College of Design, solicited proposals from four finalist teams from across the globe.

TLS/KVA stood out for its proposal, titled RiverFIRST, which focuses on water, health, mobility and green economy.

The goals were to re-establish the parks as an economic engine for development and make the river�one of the three great rivers of the world�a connector, not a divider, and reorient the city around that focus, according to contest project manager Mary DeLaittre.    

Whether it's about rediscovering the Northside Wetlands or establishing floating "habitat islands" that happen to be formed from recycled water bottles, "RiverFIRST design initiatives function at multiple scales to link larger natural, social, civic, and economic ecologies and raise citizen awareness about the impacts of consumer choices on the Upper Mississippi River," a prepared statement reads.  

TLS/KVA will be awarded a riverfront parks commission, the details of which will be determined over the course of a four-month transitional phase.

 
Source: Sheila Kennedy, KVA, Mary DeLaittre, Mississippi Riverfront Design Competition  
Writer: Anna Pratt

Through a $243 million renovation that has long been in the works, the historic St. Paul Union Depot will become a multimodal transit hub, providing access to the region, Milwaukee, Chicago, and beyond.

The project broke ground on Jan. 18.

St. Paul policy director Nancy Homans says it'll be a center of transportation activity akin to transit hubs in New York City and Washington, D.C. "It's a strong element of the regional economy."     

Amtrak, metro area buses and express buses, the Central Corridor Light Rail line, and pedestrian and bicycle traffic will run through the depot. Greyhound and Jefferson bus lines might also come into play, according to city information.

It harks back to the 1881 depot's early days, when it was known as the transportation center of the Upper Midwest and the gateway to the Northwest, according to historical information from Ramsey County Regional Rail.

Financing for the renovation comes from a combination of county, state, and federal funds, including $50 million from the last federal transportation bill and $35 million in Transportation Investment Generating Economic Recovery (TIGER) grants through the American Recovery and Reinvestment Act, according to city information.

Ramsey County is studying what kind of activity should go on there to make it more than a pass-through. After all, Homans explains, "It's an economic center, in and of itself."     
 
As the region grows and develops over the next several decades, having more people taking advantage of public transit will lead to less congestion. "Businesses today say there's a congestion tax," with trucks sitting in traffic.

The project represents a shift away from highway building, which she characterized as a drag on the economy. "It frees up the resources that would be put into roads and highways and draws it to the center," she says. "It's much more efficient for the long term."

A more efficient system can "set a pattern of activity to save the planet and support the economic prosperity of the region."  

Trains last ran at the depot 40 years ago. It was mothballed and then part of it was used by the U.S. Postal Service. Eventually the county acquired it for the transit project.

"It's a very cool building," she says, adding that the renovation will make it a "wonderful asset."

The renovation project is planned to wrap up in 2012.

Source: Nancy Homans
Writer: Anna Pratt

Last month the Twin Cities branch of LISC, which mobilizes corporate, government, and philanthropic support for local community development organizations, announced it was giving out $705,000 to a handful of local nonprofits to grow what it calls Financial Opportunity Centers. (LISC is a sponsor of The Line.)

The Twin Cities recipients include CommonBond Communities, Communidades Latinas Unidas En Servicio, Emerge Community Development, Lutheran Social Services, and Project for Pride in Living, according to information from Twin Cities LISC.

The financial opportunity centers take a bundled approach with financial coaching, employment, and training that goes beyond job placement, according to Andriana Abariotes, who is the Twin Cities LISC executive director.

Two of the nation's 33 Financial Opportunity Centers were piloted in the Twin Cities in 2007 through the East Side Lutheran Services and the Project for Pride in Living. 

"It's not about the basic need of a job but issues of budgeting and financial aspirations," such as owning a house or starting a business, she says.  

Someone who already has a job but wants to find a career path out of an entry-level job could come to one of the centers to get help. Staffers also work to ensure that people are taking advantage of various kinds of government assistance that they may qualify for, such as low-income tax credits and food stamps.   

On the other end, "It's an opportunity for trusted community organizations to work in a longer-term way" with people with whom they've already built relationships, she says, adding that the centers will track results. 

Nearly half of the grant money comes from the federal Social Innovation Fund that directs public and private funds to "expand effective community solutions related to economic opportunity, healthy futures, and youth development and school support," according to a prepared statement from the organization.

Funds will begin to trickle in next month while the program officially launches in April, according to Abariotes.   


Source: Andriana Abariotes, Twin Cities LISC executive director
Writer: Anna Pratt

Minnetonka-headquartered Opus Development Corp. will soon begin construction on a high-end, 120-unit student apartment complex near the University of Minnesota at Washington Avenue Southeast and Southeast Ontario Street in Minneapolis.

The Stadium Village Flats will be within walking distance to the east and west bank sides of campus, Dinkytown, and the forthcoming Central Corridor light rail train that's planned to run down Washington Avenue Southeast by 2013, according to Dave Menke, a senior vice president and general manager at Opus.

"We consider it to be the best location down at the edge of campus," he says. 

The $30 million building's units, which have a range of one to four bedrooms, will come fully furnished and will boast upscale finishes, according to company information. There will be two levels of underground parking and street-level retail, most of which CVS Pharmacy will occupy, he adds.

Inside will be student lounges, business and fitness centers, and Internet access throughout--while an eye-catching glass feature will run down the exterior on the northwest corner of the building, where Oak Street and Washington Avenue Southeast intersect.   

A couple of existing buildings that housed the longtime Harvard Market and additional commercial space and a parking lot will be demolished at the end of February, with construction beginning in March.

Initially the development involved the Oak Street Cinema and was to have twice as many units, the Minnesota Daily reported earlier, but it has been scaled down since then, due to economic factors.   

The flats will be ready in August 2012. "It'll be a first-class student housing project, he says, adding,  "There's a strong demand from the students." 

Source: Dave Menke, senior vice president and general manager for Opus Development Corp.
Writer: Anna Pratt

As part of a broader effort to encourage healthy eating and local food growing, the city of Minneapolis is crafting an Urban Agriculture Policy Plan, which it's asking for public feedback on via a couple of community meetings this month.  

The plan deals with land use, zoning codes, access to land, and design as it pertains to urban agriculture, according to city information.

It's an extension of Homegrown Minneapolis, another initiative that the city started in 2008 to "improve the growth, sales, distribution, and consumption of healthy, locally grown foods within the city," the program's webpage reads.

The plan outlines various recommendations for zoning changes that would allow for commercial food growing and full-fledged urban farming, explains city planner Amanda Arnold.  

For instance, it calls for urban farms in industrial areas and in certain commercial districts; allowing market gardens to be located on rooftops and the ground, and setting maximum lot areas so that market gardens fit into neighborhoods.   

Other recommendations emphasize urban agriculture in long-range planning and in conjunction with new development, as part of the landscaping.  

In general, she says, "The idea is to make it more feasible for growing in the city."

A number of other cities around the country, she says, are undergoing similar initiatives to address the growing trend toward urban agriculture. Seattle recently revised some aspects of its zoning code to allow for more local growing and Chicago is in the middle of doing the same thing. Meanwhile, urban farming has caught on in Milwaukee, Detroit, and Cleveland, according to Arnold.  

"Efforts around the country vary a lot," she says, adding that although the concept has been around for a long time, "I think the formalization and promotion of urban agriculture is a recent movement."   

The plan will go before the City Council in February.


Source: Amanda Arnold, Principal Planner, City of Minneapolis, Department of Community Planning and Economic Development
Writer: Anna Pratt

As its name suggests, the Flux Apartments complex targets a group of upwardly mobile young professionals whose lives are, well, in a state of flux.

The $38 million apartment complex that Greco Real Estate Development is building at the intersection of Fremont Avenue South and the Midtown Greenway will connect with people who may have been attracted to Minneapolis for a job offer, and who may not know where they'll end up in five years, explains Brent Rogers, a vice-president of development at the company.

The 216-unit complex is the city's largest housing project since Greco's 242-unit Blue apartments, which opened in 2008 in the Lyn-Lake area, according to Rogers.

Blue, he says, is 96 percent occupied, demonstrating a demand for this kind of housing. In the past, "there hasn't been a whole lot of new upscale housing in Uptown," he says.   

Flux will have studio alcoves and two-bedroom penthouses that will be mixed throughout six- and four-story interconnected buildings. 

It'll offer plenty of amenities, including an outdoor pool, courtyard, grilling area, private dog park, fitness center, cafe and bar, so that "when they're not at work [tenants] can enjoy life and have fun," without the worries of home-ownership if they later decide to move on, he says.  

The location offers easy access to the bike and walking paths along the Greenway, and to light rail. 

Another interesting aspect of the project, he says, is that in addition to financing from NorthMarq Capital and PNC Realty Investors, the AFL-CIO Building Investment Trust is pitching in--meaning that "union retirement pension funds are putting union workers to work."

Even though it's still a challenging time for development in general, Rogers says, the project speaks to the "belief that the rental market continues to be strong and gets better over the next few years."

The Flux Apartments will open in January 2012.

Source: Brent Rogers, vice president of development at Greco Real Estate Development
Writer: Anna Pratt

A sizable rock-climbing community in the Twin Cities is underserved, according to Nate Postma, the founder and president of the locally based company Vertical Endeavors. Numerous area rock-climbing gyms have gone out of business through the years, he explains. 

Vertical Endeavors runs several indoor rock-climbing gyms in St. Paul, Duluth, and Warrenville, Ill. In St. Paul, it offers indoor and outdoor lessons, youth programs, and group events, along with a pro shop, weight equipment, showers, lockers, and year round climate control, its website states.

As an indication of the sport's popularity, the St. Paul Vertical Endeavors location sees over 100,000 individual climbers a year. Many of them become repeat customers, Postma says.
 
For years the company scoped out various sites for a potential Minneapolis location.

Postma was pleased when Mark Krogh, the principal of Java Properties, approached Vertical Endeavors about the possibility of bringing an indoor rock-climbing gym to 26th and Nicollet Avenue in Southwest Minneapolis, as a part of a larger proposal to revamp a couple buildings on the block.

With the help of Minneapolis-based DJR Architecture, developer First & First LLC is heading the $5 million project.

The gym will go into an 11,000-square-foot space that once housed the Ice House Studio in the Whittier neighborhood.

Postma says the $2 million state-of-the-art facility will be among the largest in the country. It could be as high as 60 feet, with 25,000 square feet of climbing space. Many climbing gyms are half that size, or even smaller, he says.

It'll accommodate different styles, abilities and ages, with top-roped climbing, bouldering, and auto-belays (which allow people to go solo). "This will put Minneapolis on the map," he says, adding, "Our customers are destination-oriented."  

A branch of St. Paul's well-known burger joint, the Blue Door Pub, will be the second-largest tenant next to the gym, while the popular Azia restaurant is returning to the corner with a new concept, according to Krogh. Thirteen apartments, another restaurant, coffee shop, offices, courtyard and parking are also part of the plan.

Krogh says the rock-climbing gym will draw many new people to the restaurant-filled avenue, dubbed Eat Street. "I really believe this is going to be the next Uptown," he says. "It should be exciting. I think it's going to bring a lot of energy to Eat Street."

Source: Nate Postma, founder and president of Vertical Endeavors
Writer: Anna Pratt

Class C office space--the kind craved by startups and nonprofits--saw a big occupancy-rate jump over the last year in downtown St. Paul. But that's something of an illusion, according to Eric Rapp, one of the commercial real-estate professionals behind a report released this week by the St. Paul Building Owners and Managers Association (BOMA).

The Class C market actually held relatively steady in 2009�10, says Rapp, co-chair of BOMA's marketing and leasing committee, which is in charge of producing the organization's annual Office Market Report. But the total amount of Class C space shrunk significantly with Ramsey County's purchase last year of the Metro Square Building on E. 7th Place. That moved nearly 400,000 square feet of office space from Class C to BOMA's Government classification, and bumped up downtown St. Paul's Class C occupancy rate from 63.9 percent to 83.3 percent.

In reality, Rapp says he suspects "nothing major" has changed in the amount of space available in Class C buildings in areas such as Lowertown, where many small companies go in search of economical leases close to the heart of the city. One other change is the addition in this year's report of the Southbridge Office Center at 155 S. Wabasha St. With that addition of 22,000 square feet and without the Metro Square Building, about 140,000 square feet of Class C office space remains ready for new occupants.

The overall occupancy rate in downtown St. Paul inched up from 90 percent in 2009 to 91 percent this year. It's an increment of progress that BOMA's Office Market Report can point to with confidence. "Saint Paul BOMA prides itself on developing one of the most accurate, first-hand, and detailed office market reports in the region," writes BOMA chair Fred Koehler.

Source: Eric Rapp, St. Paul Building Owners and Managers Association
Writer: Chris Steller

It took only 90 days for a Minneapolis neighborhood food co-op to raise $1.5 million in member loans earlier this year to fund a building renovation at a new location. That commitment on the part of 200 member-owners helped the Linden Hills Co-op Grocery and Deli attract $2 million more in financing from outside sources, including the City of Minneapolis, Peoples Bank and Northcountry Cooperative Development Fund.

The new store opened last week with 50 percent more retail space to accommodate a growing customer base, says Allie Mentzer, the co-op's marketing and member-services manager. That increase was reflected in sales as soon as the second day in the new location, when the store took in $43,300. That's a 46 percent increase over the sales for the same day a year before, Mentzer says.

Customer enthusiasm for the new store also showed up in the number of members the co-op enrolled in the first two days: more than 30. That's as many as sign up in the average month. Membership now stands at more than 5,000.

The opportunity to stay in Linden Hills yet gain room to grow in an existing building was rare: the neighborhood boasts only a couple of commercial buildings of sufficient scale. So the co-op's board acted quickly when the owners of the former Almstead's Sunnyside Market made their building available for lease in the summer of 2009. They signed on for 15 years, with first crack at purchase when the lease is up or before if the owners decide to sell.

The new location is seven blocks away, at Linden Hills' other commercial node.  

The co-op took on higher renovation costs to bring the building up to LEED certification standards for environmental sustainability, with green coolers, freezers, lighting and the like. (The board opted to leave its rooftop solar array behind for the next occupants of its former building, saving an anticipated $30,000 in moving costs.)

But the co-op, in the far southwestern corner of Minneapolis, continues to draw increasing numbers of customers from nearby suburbs as well as from other parts of the city. "We saw sales go up even in the economic recession," Mentzer says. "It's pretty remarkable."


Here's a video from Linden Hills Co-op's opening day last week:

One of the might've-beens about the Central Corridor light rail line that's now under construction is a route not taken at its Minneapolis end. University of Minnesota officials pushed hard for an alternative plan that would have seen trains skirt campus by swinging through the Dinkytown commercial district rather than plowing down Washington Avenue, close to vibration-sensitive research facilities. (The university dropped a lawsuit over the vibration issue last week.)

One of the advantages offered by the alternative route to downtown via Dinkytown was a proximity to land ripe for a wave of development of the sort it seemed only LRT could bring. But redevelopment is happening in the area in a big way anyway, even despite a lousy lending environment. One firm, Doran Companies, has just broken ground on its second big Dinkytown project, the 412 Lofts at Fourth Street and 13th Avenue SE.

It's to be a five-story, 102-unit apartment building with two levels of underground parking, says Jim LaValle, Doran's vice president of development. It's not student-only--that would be illegal under fair housing laws--but LaValle says the 412 Lofts will cater to the close-to-campus environment.

A year ago, Doran broke ground on Sydney Hall, a similar project that also included renovation of the Dinky Dome, built in 1915 as the Minnesota Bible College but now better known for its signature glass dome skylight. The development is now fully leased, LaValle says, including a ground-floor CVS, Dinkytown's first drugstore after a decade or more without. Plans to lease space directly under the dome for commercial use didn't find any takers, LaValle says--so lucky residential tenants will enjoy the spectacular interior instead.

How do two big developments take off within two blocks when construction is stalled elsewhere? Doran credits "efficient design that works financially"--along with a "captive audience."

Source: Jim LaValle, Doran Companies
Writer: Chris Steller

When a big city loses a homegrown Fortune 500 company, it hurts. It hurts less when the company moves its operations only as far away as a nearby suburb, since jobs stay close. But either way, the city can be left with land that once cradled a world-class business but now sits idle or underused.

Examples in Minneapolis include the former General Mills sites on the downtown riverfront and on the city's East Side. After General Mills decamped to the west to establish a new corporate campus in Golden Valley, both areas required years of redevelopment effort to get back to their current states of economic vitality.

On its own East Side, St. Paul has 45 acres that once were home to 3M, before the company originally known as Minnesota Mining and Manufacturing moved its world headquarters further east to Maplewood. The sprawling former 3M site along the Phalen Corridor--together with two smaller, adjacent sites--has been rechristened Beacon Bluff.

The sprawling former 3M site along the Phalen Corridor has been rechristened Beacon Bluff and is being marketed for industrial redevelopment by the St. Paul Port Authority and commercial real-estate firm Cassidy Turley. On 4.5 of those acres now stands a new HealthEast Medical Transportation facility. It opened for business this summer with 120 jobs and a $5.1 million investment in construction.

"It's really an important step to reclaim the jobs that were lost when businesses like 3M and Whirlpool went away," said Mayor Chris Coleman at a ribbon-cutting event last month to dedicate the building. "This marks the beginning of the reshaping of the whole East Side."

Source: Tom Collins, Saint Paul Port Authority
Writer: Chris Steller

Steering a kayak through a whitewater rapids within a stone's throw of downtown Minneapolis has been a longtime dream of local paddling enthusiasts.

The idea has been to take advantage of some of the Mississippi River's approximately 50-foot drop at St. Anthony Falls along the river's east bank. A manmade course of restored rapids could be controlled, according to plans, so as to provide the right flow for a range of recreational users, from leisurely rafters to competitive racers.

The concept has received both state and federal support over the last decade or more. Now a redesign of the project by consultants for the U.S. Army Corps of Engineers is underway, with a draft report due this fall.

Designers are considering a continuous, looping course--using a conveyor to return paddlers back to the beginning --as an alternative to a linear course with start and finish far apart. They are also taking into account changed conditions on the ground like the new piers of the replaced I-35W bridge.

At a progress meeting last week, an expert on whitewater courses presented encouraging numbers: restored rapids in Minneapolis could attract 62,000 people annually. Even the least lucrative of four business models shows that most costs of operation could be recovered. (Construction costs are another matter.)

Project Manager Russel K. Snyder calls the course that the Mississippi River whitewater park concept is taking through the federal system "unusual." But like the whitewater rapids it would restore, the project keeps moving, stirring passions and possibilities.

Source: Russel K. Snyder, U.S. Army Corps of Engineers
Writer: Chris Steller