Will St. Paul’s Lowertown get the upper hand?

Mears Park: part of Lowertown's makings for an urban boomtown.
MinnPost photo by Steve Berg
Mears Park: part of Lowertown’s makings for an urban boomtown.

Since the economy’s crash in 2008, more than 50 projects, most of them condo towers, have stalled or vanished from the skylines of downtown Minneapolis and St. Paul. With them, expectations of livelier streets and new urban-style neighborhoods have quickly faded as both cities hunkered down to wait for better times.

Now, clearly impatient, St. Paul Mayor Chris Coleman has announced a “Rebuild St. Paul” initiative aiming, as he put it, “to put cranes in the air and shovels in the ground.”

Coleman’s bet is that $15 million in city money, coupled with bonding and other financing tools, will leverage $100 million in private investment to jumpstart 15 projects across the city. That would put 3,000 people to work, mostly in the construction trades. It would also link directly to major rail and bridge projects already under way, and it would show private lenders that St. Paul is, in Coleman’s words, “open for business.”

Nowhere, perhaps, in either city are the redevelopment stakes higher than in Lowertown, the bundle of majestic brick warehouses that form the eastern edge of downtown St. Paul.

Lowertown has all the makings of an urban boomtown: A redeveloping Union Depot, the Central Corridor light-rail line now under construction, a commanding view of the riverfront, a superb collection of historic buildings, an exquisite public square (Mears Park) and a thriving farmer’s market, a budding arts and music scene. Still, the district often has the lonely feel of an Edward Hopper painting, of a place that has yet to reach its potential.

Coleman’s initiative, however, could push Lowertown over the top. The key ingredient is an urban-style Lunds supermarket at 10th and Robert streets, part of the long-delayed Penfield project. The 30,000-square-foot market, slightly larger than the urban prototype that Lunds opened on the edge of downtown Minneapolis in 2006, would offer the best evidence that Lowertown and the adjoining Northeast Quadrant are moving onto the Twin Cities’ main stage.

Penfield is scaled back
It’s disappointing that a Hyatt hotel will not accompany the supermarket, as first planned, and that 33 floors of luxury condos will be replaced by 253 units of midrise, market-rate rental apartments. But that’s the new normal.

“Lowertown is one of the great destinations in the Twin Cities, and people are starting to recognize that,” Coleman told me on Tuesday. “It just needs a couple of sparks.”

Assuming that the Department of Housing and Urban Development (HUD) agrees, the $55 million Penfield/Lunds project would benefit from $44 million in Build America municipal bonds, part of President Barack Obama’s stimulus package.

The city will also help restart the $13 million Lofts at the Farmer’s Market project, 56 rental units and 2,400 square feet of retail at 5th and Wall streets, on the west side of the St. Paul Farmer’s Market.

Both projects are being developed by Minneapolis-based Alatus, which built the Grant Park and Carlyle luxury condo towers in downtown Minneapolis and recently purchased Block E.

"Lowertown is one of the great destinations in the Twin Cities, and people are starting to recognize that," Mayor Chris Coleman said Tuesday. "It just needs a couple of sparks."
MinnPost photo by Steve Berg
“Lowertown is one of the great destinations in the Twin Cities, and people are starting to recognize that,” Mayor Chris Coleman said Tuesday. “It just needs a couple of sparks.”

“I’m very bullish on residential development in downtown St. Paul,” said Bob Lux, a partner in the Alatus firm. The prospect of Chicago-Twin Cities high-speed rail terminating at the Union Depot is particularly exciting, he said. Lux sees a good chunk of the real estate moving toward attractive city districts like Lowertown.

Lux said it’s important for St. Paul to show private lenders that a large-scale project like Penfield/Lunds can succeed. “There’s a herd mentality among lenders. Once they see a major project succeeding, they’ll be inclined to support others.”

A new phase for Lowertown
Coleman sees Lowertown as entering its third phase. First came artists to occupy the old warehouses. Then came the new residential towers on the Northeast Quadrant. Trains and groceries will validate the neighborhood, he predicts.

The mayor’s initiative is hardly large-scale by historic standards. Still, it’s significant that St. Paul has taken a leap into the development business at this critical point. Cecile Bedor, the city’s planning and economic development director, has been “unwilling to take no for an answer,” Coleman said, complimenting her staff for cobbling together a package of development incentives that, he hopes, can get construction moving again.

St. Paul’s redevelopment record has been far from perfect. “We do two things pretty well — infrastructure and housing,” he said. “Retail is tricky. I can’t change people’s retail patterns.”

Coleman and Lux said that the most important thing at this point is to get housing units into downtown to match the big infrastructure investments, especially in rail. Restaurants and entertainment often follow. And other retail could follow that. Coleman also sees a new St. Paul Saints ballpark in Lowertown’s future.

“All of these things are coming together — finally,” he said. Impatience can be an attribute in a mayor. St. Paul just plain got tired of waiting for the recession to be over.

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Comments (16)

  1. Submitted by Thomas Swift on 09/15/2010 - 09:33 am.

    No one would be happier with a re-vitalized St. Paul than I. There are several venues in the city that seem tailor made for the type of exciting development that the author alludes to.

    Smith Avenue, on the West Side, has exactly the mix of residential and commercial properties, tree lined streets and ease of travel that made Grand Avenue grand.

    Millions have been spent on the Pahlen corridor, making it a pleasant place to be, and to do business.

    The west side of the Mississippi river remains primed, and empty.

    Sadly, the citizens have elected, and continue to re-elect a leadership that is wholly unsuited to the task at hand.

    Mayor Coleman’s $15 million “carrot” is not only embarrassingly naive, according to the Mayor’s own annual, tear stained laments to the legislature; it’s not even financially feasible. And as I’ll explain, the mayor couldn’t get an investor to listen to him for twice that amount.

    In addition to proving themselves utterly incompetent fiscal managers, the leadership of Saint Paul has positioned the city as an extremely unattractive place to do business.

    Since Coleman has joined the leftists on the city council, property taxes, raised a cumulative 42% over the past 6 years, have reached the point where even spendthrift Democrats realize there is not much more candy in that jar.

    That leaves the business sector poised for the big squeeze Coleman et. al. need to continue to fuel their leftist agendas. And business people know it.

    Coleman’s administration has the worst relationship with the people that build businesses of any in the past 25 years. The mayor, and especially councilman Dave Thune, have built their political careers around the most venom laced diatribes against the Chamber of Commerce you’ll ever hear…bashing the people that are crucial to the sorts of plans described in this article.

    Saint Paul has much to offer. But as long as the city remains in the hands of immature incompetents, the Capital city will remain an unfulfilled promise.

  2. Submitted by Joe Schweigert on 09/15/2010 - 10:02 am.

    Sounds like a really awesome plan. Kudos to the heartless lefty socialists who are brining the central corridor and the revitalization of the union depot to lowertown! been a long time coming if you ask me. I’m not sure that all of Mayor Coleman’s plans would work out without using that as the cornerstone.

    Also, thanks to the stimulus! i feel like i read about new projects quite often that are made possible by Barack Obama *gasp* re-investing our tax dollars back into the economy.

    I agree that Smith Ave would be a good spot for some investment as well. Very pretty area.

    Here’s to a mayor building something in St. Paul besides a Hockey Arena!

  3. Submitted by Susan Lesch on 09/15/2010 - 10:37 am.

    Mr. Berg, do you happen to know the difference in potential between Lowertown in Saint Paul and the North Loop (Warehouse District) in Minneapolis? You say Lowertown has “all the makings of an urban boomtown”.

  4. Submitted by Thomas Swift on 09/15/2010 - 10:48 am.

    Yeah Joe, I hear you…that hockey arena was a real flop. *facepalm*

  5. Submitted by Dan Landherr on 09/15/2010 - 10:53 am.

    “property taxes, raised a cumulative 42% over the past 6 years”

    That couldn’t have anything to do with drastic cuts in Local Government Aid, could it?

  6. Submitted by Thomas Swift on 09/15/2010 - 11:56 am.

    Dan, given the fact that there are hundreds of towns in this state that have never received one red cent of LGA, but have somehow managed to keep the lights on without quadrupling the tax burden on their citizens, I think it had more to do with stuff like the triply redundant Human Rights Division, the bicycle advisory board, district council sweepstakes, union mandated overtime to cover the pot hole crew’s convenience store runs…

    ….you know; Democrat meat and potato stuff.

  7. Submitted by James Hamilton on 09/15/2010 - 12:48 pm.

    As a St. Paul native and returnee-resident for more than 25 years, I would very much like to see each of these projects succeed. I can’t shake the memory of the World Trade Center and the Galtier Building, however. Nor can I ignore the current litigation between the Port Authority and its bondholders. What, pray tell, is the city’s potential downside for each of these projects?

  8. Submitted by Joe Schweigert on 09/15/2010 - 12:54 pm.

    I wasn’t hating on the hockey arena. I saw Weezer there and it was pretty cool. Just, you know, it’d be nice to have other stuff too. Stuff that keeps people there longer than a Friday evening.

  9. Submitted by Ken Paulman on 09/15/2010 - 12:55 pm.

    @Thomas Swift: The cities of St. Paul and West St. Paul are currently working together on a redevelopment plan for Smith Avenue (I’m on the task force). The Strib did a story about the project last month: http://www.startribune.com/local/south/100163289.html.

  10. Submitted by Thomas Swift on 09/15/2010 - 04:22 pm.

    That was an interesting piece, Ken. I had missed it, so thank you for pointing it out.

  11. Submitted by Ray Marshall on 09/15/2010 - 06:12 pm.

    People have been promoting downtown for 40 years. The only reason exist at all is because of the explosive growth of city, county and state government employees and the financial support of the St. Paul Housing and Redevelopment Authority, the socialist organization that purchases and develops land and tries to sell it if it becomes successful.

    But you notice, I’m sure, that those tens of thousands of government employees don’t shop, dine or drink in downtown St. Paul to any great extent.

    Now more millions are being spent building light rail past all the government offices down to the Union Depot, another government project

    It will probably work well during rush hours as employees save tons of money on parking by parking on lots and in residential streets in the Midway. It will do well feeding the Excell Center, too.

    It remains to be seen if it will be needed during other hours.

  12. Submitted by James Hamilton on 09/15/2010 - 07:40 pm.

    @Ray Marshall: IMO, the downtown promoters of the ’70s killed downtown St. Paul when they cut off 7th St. and routed traffic to the periphery. Skyways and blank street level storefronts didn’t help, either.

  13. Submitted by Steve Berg on 09/16/2010 - 08:13 am.

    Susan Lesch asks me to compare Lowertown’s potential with the North Loop’s. Lowertown has far superior building stock and far greater walkability. It has, perhaps, the nicest park in the Twin Cities and a great-looking farmer’s market. It’s like a movie set. What it lacks is people. The East Metro — especially East Side neighborhoods and the eastern suburbs — lack the numbers and buying power in the West. (think of all the affluent suburbs attached to the west side of Minneapolis.) So, in that sense, Lowertown is badly located and suffers, as James Hamilton suggests, from a history of questionable public investments (Galtier, World Trade Center, etc.).

    The North Loop has far less to work with architecturally. It’s a very grim and primitive area. Walkability is terrible. It has no public space to match Mears Park. By comparison, the Minneapolis Farmer’s Market is an eyesore.

    Despite all of that the North Loop’s potential is probably greater. It has Target Field and a site for a “union station” (Interchange) that, if built, would outdraw Union Depot. It already has a bustling restaurant/bar scene including some of the best eateries in the TC. According to developer Chuck Leer, the North Loop contains probably 100 “pads” for future private development … if the market ever comes back. It’s bones aren’t nearly as good as Lowertown’s, but its location and proximity to the prosperous western suburbs gives the North Loop an edge in the long run. Here’s hoping BOTH areas succeed.

  14. Submitted by karl karlson on 09/16/2010 - 12:10 pm.

    Its a stretch to say the Penfield is in Lowertown.

  15. Submitted by Bernice Vetsch on 09/16/2010 - 03:45 pm.

    Lowertown’s late 19th- and early 20-century buildings, flush with character and charm, are the ones that succeed in downtown St. Paul. Galtier Plaza and the World Trade Center both seem out of place.

    I don’t recall the exact number, but downtown’s population of permanent residents is steadily growing, perhaps largely due to the new supply of housing. This should lead to more demand for restaurants, shops and entertainment in their “neighborhood.”

    May I suggest that the City find someone to re-open the closed top-floor Galtier movie theater as an art house that would feature old movies and new documentaries. (And, please, daytime showings for us fogies who leave our cars at home and take the bus downtown.)

  16. Submitted by Matthew Steele on 09/21/2010 - 02:12 pm.

    Is it only obvious to me? The reason why downtowns have struggled in the second half of the 20th century is that we’ve actively subsidized every other option. We built freeways that remove people from the true cost of having a 70 MPH commute from the far burbs. We’ve given companies TIF, and fast freeway access to “free” parking lots, which causes them to build suburban office parks and campuses. We fight wars abroad to ensure cheap oil. We keep pushing the true cost of maintenance of our state onto local governments, which makes people more likely to live in the burbs where they can have their cake and eat it too (of course, they drive into at least a beltway suburb for their job, and they drive into our beautiful Minneapolis to enjoy sports, culture, and world-famous parks). But clearly people have chosen what they want; it’s not social engineering at all…

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