When the Hiawatha light rail line went up in the early 2000s, scarce attention was paid to real-estate development and other potential benefits along the corridor. The new trains were seen mainly as a transportation choice and, indeed, they’ve been wildly popular.
In contrast, the Central Corridor has been intensely driven by hopes (and fears) about development, probably because the line is more intimate to its surroundings and because St. Paul and Minneapolis see more clearly the missed potential along Hiawatha. When trains begin running in 2014, planners vow that the new corridor will be poised for private investment even if the market hasn’t fully recovered.
Most dramatic, perhaps, are the plans for changes around the West Bank station in Minneapolis.
The station, originally destined for the trench between the University of Minnesota Law School and the Humphrey Institute near the foot of the double-decked Washington Avenue Bridge, was moved nearly two blocks to the west, to a spot between 19th and Cedar avenues. The new location brings the station closer to the heart of the Cedar-Riverside and Seven Corners communities and opens up 12 vacant sites for new housing, retail and other infill possibilities. (Click here for the city’s latest report. Select the September Open House Presentation to see an assessment from the Ellerbe Beckett architectural firm. Select slide 40 to view a map of potential redevelopment sites.)
Accompanying the development pads are city and county commitments for new streetscapes, landscaping, bike lanes, plazas and public-safety strategies to dress up the forlorn district and make it more attractive for investment. A new pedestrian connection between the West Bank station and the Cedar-Riverside stop on the Hiawatha line would also be forged.
Pending renovation partnership
Topping the list, however, is a pending city partnership with developer George Sherman to renovate the vintage Riverside Plaza apartment towers that dominate the West Bank skyline. The City Council could approve the deal as early as next month. Included are a $1.9 million loan from the city’s Affordable Housing Trust Fund and $80 million in revenue bonds to be repaid by the developer.
All in all, the package of improvements could bring $14 million in public benefit, including construction jobs for neighborhood residents, according to Mike Christenson, Minneapolis’ planning and economic development director. “This is like a Marshall Plan for Cedar-Riverside,” he said.
Reconnecting the West Bank
The West Bank has an especially colorful history. Settled by Scandinavian and Bohemian immigrants in the late 1800s, the district developed a racy reputation before falling to decay when Prohibition closed its bars in the 1920s. Freeway construction further scarred the area in the 1960s, leaving it an island hemmed in by the Mississippi River on one side and deep roadway trenches on the other, cutting off the West Bank from the rest of the city.
By the early 1970s, the area had become a Midwestern Haight-Ashbury, home to hippies, perpetual students and a lively music and arts scene bubbling up from its string of bars, coffee houses an head shops. That aura lingers but now shares the neighborhood with a spread of campus and medical buildings and an influx of East African immigrants.
But there’s another dimension to the West Bank station. It’s intended as a kind of surgery to begin healing the wounds left by the gaping freeway and roadway trenches. Several potential redevelopment sites sit atop roadway embankments where off- and on-ramps are slated for removal. Two bridges in particular (Cedar and 19th Avenue) will be “shortened” by landscaping, station entrances and other design features as a way of knitting the community closer together. Fixing the desolation caused by 1960s-era highway engineers is a huge challenge. But Minneapolis hopes one day to reconnect the West Bank to downtown by infilling the freeway trench with human-scale walkways, parks and other features much in the way that Target Plaza stretches over Interstate Hwy. 394 to connect downtown with the North Loop.
“The idea is to make these freeway areas part of the urban fabric again,” said Haila Maze, a Minneapolis planner working on the West Bank project. “This a chance to make the best of the big mistakes that were made in the past.” The changes aren’t urban renewal or gentrification, she explained. While the project intends to stabilize and expand the community, it’s not designed to dramatically raise rents or incomes in one of the city’s poorest neighborhoods.
Pushing transit-oriented development
In a broader sense, the West Bank station is also part of a move to raise the profile of transit-oriented development (TOD) in the Twin Cities metro. TOD is the modern-day equivalent of the freeway interchange, which, as every driver knows, has spawned a vast array of fast-food joints, big-box retail outlets, motels, strip malls and gas stations, all geared to the auto. TOD is a condensed, urbanized version of that, with housing tossed into the mix. The idea is to rediscover traditional, walkable urban neighborhoods near transit stops as a reasonable and more energy-efficient alternative to the car monoculture.
The trouble with TOD is that the deck is stacked against it. Even with big investments in public transit, the freeway interchange model enjoys financial advantages built into the economy and the tax code. The result is that a new light rail line isn’t good enough on its own to attract large-scale development. Some housing may follow, as it has along Hiawatha (more than 7,000 units by one account). But major retail, office and other benefits can’t compete with the artificially cheaper model along the freeways. An offset is needed.
That’s where “TIF for TOD” comes into play. If local governments could capture a portion of the expected tax value increase near stations and use it to retrofit the neighborhood for redevelopment (streetscapes, landscaping, lighting, storefronts, etc.) then TOD would have a better chance to compete. To accomplish that the Legislature would have to tweak current law governing tax increment financing (TIF) in Minnesota.
“It would be an invisible thumb on the scale to make the invisible hand of the marketplace more efficient,” said Jim Erkel, an attorney for the Minnesota Center for Environmental Advocacy. The problem with current law is twofold, he said: It lacks the flexibility needed to help TOD, and its “blight standard” is obsolete. The point of redevelopment is no longer to eradicate blight, he pointed out, but to increase land-use efficiency.
The point is to maximize the return on investments like the Central Corridor line by attracting private capital, Hennepin County Commissioner Peter McLaughlin explained. With a more even playing field for development, the nearly $1 billion public investment on Central could return $6 billion in private investment, he said.
The Legislature may take up the proposed TIF changes next year with an eye toward similar changes enacted recently in Texas, Maryland, Pennsylvania and Maine. In recent years the Legislature has moved to limit TIF because of perceived abuses in the 1990s. However, with funding tight, it’s hard not to consider borrowing from the future tax values produced by TOD. Denver’s Southeast LRT line, for example, cost $879 million in public funds. But, with a menu of planning incentives, it generated an estimated $4.25 billion in private real estate investment. Numbers like those will be hard to ignore as governments think harder about getting the most long-term bang for the buck.