Construction of St. Paul is strong in 2020 with new locations, development of the green line – Twin Cities

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Despite social unrest and a pandemic-induced economic recession, builders large and small continued to build in St. Paul’s last year.

Landowners secured $ 692 million in building permits in 2020, up from $ 550 million the year before and 2% more than the city’s six-year average, according to a Pioneer Press analysis.

New multi-family apartment buildings have paved the way, and properties along the Green Line have seen a surge of activity, six years after the tram extended to the capital.

“That story that cities are dying, and nobody wants to live here, and nobody wants to do business here?” I can’t find any evidence that is true, ”said Mitra Jalali, a member of the city council, who represents Ward 4, the northwest corner of the city, which was the starting point for the new real estate development in the year. last.

Jalali has heard all kinds of comments about construction activity around Raymond Avenue and University Avenue near the Minneapolis border. Some voters are celebrating the addition of new housing, while others lament the high monthly rents and construction noise associated with apartments that have yet to open to the public.

With an estimated construction price of $ 43.5 million, this affordable five-story, two-building development at 1845 University Ave. W. in St. Paul will expand to 243 apartments, as well as 2,500 square feet of retail space on the ground floor when it opens in a few months. Developer Reuter Walton and the Frana Companies predict a total investment of $ 64 million ultimately, pictured on Wednesday, June 2, 2021 (Scott Takushi / Pioneer Press)

Nearby, the Vandalia Tower near Vandalia and University avenues in Ward 4 recently completed an 18-month renovation that has attracted tenants from the North Loop and beyond to Minneapolis. Of the 15 properties his company runs in the metro, “most of our rental business is there,” said Michael Wendorf, rental agent at Principled Real Estate Advisors. “We are pleasantly busy here. And that’s good for St. Paul.

Further east along the Green Line, around Snelling and University avenues, several apartment buildings with a few luxury units are under development or ready to be let. The largest building permit obtained in the city in the first 12 months of the pandemic was for a mixed residential and commercial development under construction in front of a Goodwill factory outlet near University and Fairview avenues.

The five-story, two-building and affordable housing development at 1845 W. University Ave. will offer 243 apartments and 2,500 square feet of retail space on the first floor when it opens in a few months. Developer Reuter Walton and Frana Cos. expect a total investment of $ 64 million when it opens.

“A significant increase in the complexity and size of development projects contributes to the increase in permit assessments,” said Ricardo Cervantes, director of the department of safety and inspections at St. Paul, in a written statement.

The Green Line corridor also remained warm during the first months of 2021.

At Raymond and University Aves. in St. Paul, the Minneapolis-based Kraus-Anderson Development Company is building 222 apartment units at market rates on the former U.S. bank site across from Key’s Cafe on Wednesday, June 2, 2021 (Scott Takushi / Pioneer Press)

At the end of February, on Raymond and University avenues, Kraus-Anderson Development Co., based in Minneapolis, inaugurated 222 apartment units at market rate on the former US bank site across from Key’s Cafe. Three months later, the company began redeveloping the vacant Walmart Supercenter east of University and Snelling avenues into a big box decorating hub.

“I think the Green Line brought different opportunities, and there was a good number of older real estate that had lived their useful lives and were ripe for redevelopment,” said Matt Alexander, senior vice president at Kraus- Anderson.

NEAR CITY CENTER BEHIND

From early 2020 until March of this year, Ward 4 had 14 major projects representing some $ 245 million in construction activity, eclipsing most other neighborhoods combined.

Ward 2 was also busy with 20 major projects valued at $ 215 million spanning downtown St. Paul, the West Side, part of West Seventh Street, Cathedral Hill and the eastern stretches of Grand Avenue. .

Elsewhere, master planning documents call for thousands of additional housing and business units in Highland Park on Ford’s former auto manufacturing site, now known as Highland Bridge, and the city is working on planning for the redevelopment. of the old Hillcrest Country Club. It may not be long before these political quarters, 3 and 7, start showing similar levels of real estate activity.

The Highland Bridge development is under construction at the site of the former Ford automobile plant in the Highland neighborhood of St. Paul on Wednesday, June 2, 2021 (Scott Takushi / Pioneer Press)

Meanwhile, the Greater East Side and Payne-Phalen remain calm, with Ward 6 landing just three of the city’s 62 major projects allowed from January 2020 through March 2021. The other neighborhoods each only had a handful of major ones. projects. In the three neighborhoods with the least construction activity, the most significant new projects were public school additions.

The East Side, North End and Como neighborhoods are “very single-family residential,” said City Council President Amy Brendmoen, who represents Ward 5, which spans much of Rice Street and the surrounding area. Como district. “But I think we will see investments on Larpenteur Avenue and Rice Street in the years to come.”

Overall, construction projects of all sizes increased across the city over the past year, from new terraces to renovated office buildings. Homeowners have likely reacted to low interest rates, a stubbornly strong stock market and healthy housing demand in central cities, as well as a resilient white-collar employment sector across the metro area. of Twin Cities.

That said, the first months of 2021 were milder than 2020 and 2019 when it comes to the construction of multi-family buildings and mixed commercial-residential structures in Saint-Paul. From January to May this year, construction companies withdrew only 10 building permits for these types of projects, up from 25 a year ago at the same time and 20 the year before.

Industry experts warn that comparing permits for short periods may not be particularly meaningful, especially given vagaries such as weather and pandemic staffing in permitting departments.

Madison Equities director Jim Crockarell has been optimistic about renovating his downtown properties during the pandemic, even as office workers zoom in from afar.

“Rumors were that people were leaving St. Paul – residential and commercial tenants. We didn’t see that to be true, ”he said. “We have surprising success with rentals, despite the fact that the city center still seems empty. “

In 2020, Madison Equities renovated three floors of the Lowry Building on Fourth and Wabasha streets, or 60 of the 150 units. Over the past four or five months, the company has managed to fill most of these vacancies. Just down the street at 325 Cedar St., Madison Equities spent most of the pandemic on a $ 25 million top-to-bottom renovation of the Degree of Honor building into 78 upscale apartments. Rents there are priced higher than the Lowry, and units move slower.

“We’re not renting them out as quickly as the cheaper units at the Lowry, but we’ve had a good reception,” said Crockarell, who plans a similar conversion of the Park Square Court building to Mears Park if inflation doesn’t rise. construction costs too high. “So far this looks promising for St. Paul.”

AFFORDABLE HOUSING

Even with all the new apartments, St. Paul still has a serious need for affordable housing, and city officials don’t always agree on how to get more.

Reports from apartment listing agencies show that the pandemic has not affected rents as much as one might expect. In St. Paul, a median two-bedroom apartment was rented for $ 1,335 a month in April, down from $ 1,200 a year ago, according to HousingLink.org. The year-over-year changes were less dramatic across the river, with the same home renting for $ 1,400 in Minneapolis, an increase of 2%.

Alarmed by rising rents, the St. Paul Planning Commission is now considering inclusive zoning – the possibility of requiring affordable housing to be included in major new construction – and eliminating parking minimums, which would further facilitate the construction of real estate for developers. in neighborhoods to which they previously had limited access due to zoning.

City council and the mayor have fought for a housing development project off Lexington Parkway and University Avenue that Jalali and other critics say should offer cheaper units.

The 288-unit Alatus project, Jalali said, is not really affordable, although half of the units would be studios and bedrooms meeting the technical definition, at around $ 1,000 to $ 1,100 per month. She acknowledges that this position has put her at odds with voters who see greater housing density as a partial response to housing shortages.

“We cannot remedy our housing shortage without supply. We also cannot have equity without a broader anti-displacement strategy, ”Jalali said. “We have to do both and everything, yesterday. We cannot rely on goodwill as a public policy. We need real strategies and tools as guarantees. … And I think Alatus’s situation revealed that very clearly.



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