Union Depot project: Another development flop in St. Paul?

Using St. Paul’s Union Depot as a backdrop, federal transportation officials joined with Gov. Mark Dayton and local officials Monday morning in urging public support for President Obama’s $447 billion jobs legislation.

U.S. Transportation Secretary Ray LaHood hailed the renovation of the depot and the construction of the nearby Central Corridor light-rail transit (LRT) as “a model for the nation” in how to improve transportation infrastructure and put Americans back to work.

Ray LaHood
Ray LaHood

Flanked by dozens of construction workers, Federal Transit Administration chief Peter Rogoff said federal dollars are helping “rebuild the depot to the grandeur it will have again” as a regional transportation hub.

“These are the kinds of projects that we need to not only replicate, but accelerate, all across the country,” Rogoff said.

Ramsey County is sinking a hefty $243 million into the acquisition and renovation of the 85-year-old Lowertown structure, with more than $124 million coming from federal sources. Construction is scheduled for completion by the end of next year.

The depot has been closed to passenger rail traffic since 1971. At its peak, it served some 280 trains and 20,000 passengers a day in the 1920s.

As a native of St. Paul and an East Metro resident for most of my life, I would love to see Union Depot project succeed. But I fear it could easily become the latest and largest in a long line of economic development flops in St. Paul.

Proponents see the renovated facility as “the premier multimodal transportation hub of the region,” accommodating rail, bus, bicycle and auto transportation. In addition, they describe it as a “vibrant new civic hall” for community and cultural events, and “a new platform for growth in St. Paul.”

The depot has 95,000 square feet of retail and public space that the county hopes to use to attract visitors and “provide a revenue stream to support and sustain Union Depot operations.”

“It is a concept that has been implemented with great success across the country, including San Francisco’s Ferry Terminal, New York City’s Grand Central Station and Washington, D.C.’s Union Station, among others,” says HR&A Advisors Inc., a New York economic development consultant employed by the county.

As a former Washington correspondent, I am most familiar with Union Station, which was renovated in the late 1980s. Any comparison between that facility and the St. Paul depot seems like a bit of a stretch.

D.C.’s Union Station serves eight different Amtrak lines, with some 12,500 passengers who board or disembark from trains every day. In addition, it is the busiest station for Washington Metro’s rail transit system, with nearly 33,000 riders entering the station every day. All told, the Union Station attracts more than 90,000 visitors a day.

Located just a few blocks from the U.S. Capitol, Union Station has 210,000 square feet of retail space. It is home to more than 100 shops and six full-service restaurants. Despite all of the foot traffic, when I was last visited four years ago, about a third of this space appeared to be vacant. The leasing agents did not respond to my request for current occupancy figures.

In contrast, St. Paul’s Union Depot will serve two Amtrak trains a day that now utilize a spartan station in the Midway area. Trains operating on the $957-million Central Corridor LRT line, set to open in 2014, will stop on Fourth Street in front of Union Depot. By 2030, that LRT stop will serve nearly 4,000 riders per weekday, though most will have no reason to enter the depot unless there are very strong attractions.

Over the years, proponents also have talked about Union Depot eventually serving high-speed rail from Chicago, and commuter rail in the Red Rock corridor from Hastings and the Rush Line corridor from Forest Lake.

However, none of these projects appears to be very realistic at this time. High-speed rail hit a pronounced speed bump in the form of Wisconsin Gov. Scott Walker and Republican legislators in that state. And neither the Red Rock nor the Rush line is included in the Metropolitan Council’s 2030 transportation plan.

Studies indicate that the 2030 ridership for rail in the Red Rock and Rush Line corridors would be lower than the first-year ridership for the $317-million Northstar commuter rail line, which in itself was disappointing. In 2009-10, Northstar attracted fewer than 2,000 riders per weekday, far below the pre-construction estimate of 3,400. The public operating subsidy required was more than $20 per ride.

(At least Northstar ridership numbers are moving in the right direction. In August, the line averaged nearly 2,700 riders per weekday, according to Metro Transit.)

County officials say Union Depot also will be a stop for Greyhound and Jefferson Lines buses, serve as the terminus for nine Metro Transit bus routes and have charging stations for electric cars.

Josh Collins, communications manager for the Ramsey County Regional Rail Authority, says the county recognizes the initial transportation service at the depot “isn’t going to generate a lot of traffic” and that “it’s going to take some time” to achieve the county’s vision for the facility.

That’s where the 56,000 square feet of leaseable retail/restaurant space and 38,000 square feet of public space come in. Collins says the county hopes to attract an anchor tenant that will draw other retailers, develop a small-tenant marketplace and program the public space for community and cultural events.

“I don’t think anyone expects that as soon as we cut the ribbon next year, we’re going to have a bustling retail space,” Collins says. “It’s going to take some time to build up foot traffic.”

Unfortunately, the track record for new retail development in St. Paul is not encouraging. Town Square, Bandana Square, Galtier Plaza and the World Trade Center all had retail components — and all were unsuccessful.

In the late 1990s, the city of St. Paul subsidized the construction of a 13-story, $101-million building to lure Lawson Software from Minneapolis. The city owns about 15,000 square feet of retail/restaurant space in the building and has had considerable difficulty filling it, despite bargain-basement lease arrangements. Pop! was the latest restaurant there to flop.

A local wag once observed, all too accurately, “St. Paul is the only city in America where a McDonald’s located on the main street could fail.”

Today, local and federal officials can congratulate themselves for preserving a grand old building from St. Paul’s past. We’ll have to wait five, 10, maybe 20 years to see if they achieved their grander vision for the future.

Comments (24)

  1. Submitted by David Greene on 09/19/2011 - 11:09 am.

    Steve, why do you put Northstar’s increasing ridership in parentheses, as though it doesn’t matter?

    Northstar opened up pretty much at the height of the recession. It’s a commuter rail line. If people aren’t working, they aren’t going to ride it. The fact that it is gaining indicates some economic recovery.

    This whole article is way too pessimistic. No one is expecting Union Depot to be an immediate huge retail outlet. Myself, I am very excited about the public spaces being created below and next to the concourse area. St. Paul is turning back to the river after decades of neglect.

    These are 100 year projects. Let’s get some perspective here, ok?

  2. Submitted by Richard O on 09/19/2011 - 11:56 am.

    Skepticism duly and appropriately noted. In fact, a McDonald’s was indeed located on Wabasha between 5th and 6th streets back in the 80’s and it did fail.

  3. Submitted by jody rooney on 09/19/2011 - 12:05 pm.

    Now if we could only bring back Sugars.

  4. Submitted by Jon Commers on 09/19/2011 - 12:07 pm.

    It would be helpful to see additional thinking that is prospective instead of retrospective in this opinion piece. Much has changed since construction of Town Square (1980), Galtier (1986) and World Trade Center/Wells Fargo Place (1987). The renovation of Bandana Square, which is in an entirely different retail and commercial submarket, occurred in 1984. The most recent of these opened 24 years ago.

    Regardless of what “local wags” say about McDonald’s stores, we can’t be afraid to invest in the region and its cities based on real estate projects completed a generation ago (and, notably, effectively reprogrammed since).

    The rise in downtown residential living and documented preferences by younger people for transit accessibility are just two of many factors that suggest the future isn’t going to look like the past. Those are the factors that motivate both private developers working in St. Paul and public leaders as well.

  5. Submitted by TJ Jones on 09/19/2011 - 12:16 pm.

    …”100 year projects”…? Really? so we must suspend any analysis or criticism until the next century? How convenient.

  6. Submitted by Seth Rowe on 09/19/2011 - 12:45 pm.

    To make it work, they will need some beyond ordinary attractions. Kansas City spent about $250 mil on their Union Station in the ’90s and came up with a phenomenal result. To take a look at a transformed Union Station that turned out working very well and certainly had an enormous amount of foot traffic when I lived there, check out http://www.unionstation.org. We’re talking museums, theaters, a planetarium, restaurants and the best New Year’s Eve laser light show I’ve ever seen, as well as Amtrak trains. In sum, this KC Union Station’s website’s claim is actually reasonably accurate: “There is no place in Kansas City – or any city – quite like Union Station. This fully restored landmark is Kansas City’s most prominent destination for cultural and entertainment activities.”

  7. Submitted by Neal Rovick on 09/19/2011 - 12:50 pm.

    …”It is a concept that has been implemented with great success across the country, including San Francisco’s Ferry Terminal, New York City’s Grand Central Station and Washington, D.C.’s Union Station, among others,” says HR&A Advisors Inc….

    Now what do those 3 cities have that St. Paul doesn’t?

    Would the difference be year-round heavy-duty tourism? Or cities that have had massive reliance on rail-based transit for a century or more? Or cities where it is easier to not own a car?

  8. Submitted by David Greene on 09/19/2011 - 01:38 pm.

    @TJ

    That’s a straw man.

    I’m simply putting this in perspective. No one planned for Union Depot to be an immediate downtown magnet. These things take time to develop.

    Look at the riverfront in Minneapolis. It used to be one of the worst parts of the city. Redevelopment there started in the late ’80’s. Now it is a gem of the city. No one project made it that. It is the combination of projects over a long investment period that made it happen.

    We can’t look at one project in isolation and insist that it change everything all at one. These things are planned and take decades to accomplish.

    Steve doesn’t seem to understand that. Pity. I would hope a “Cityscape” columnist would see the long term big picture.

  9. Submitted by Teresa Fishel on 09/19/2011 - 02:13 pm.

    The article states that the Union Depot has been closed since 1971. I know when I took Amtrak across the country in 1976 I arrived at the Milwaukee Depot in Minneapolis. I’m positive that I left just a few days later from the Union Depot in St. Paul to head to Chicago. There were two distinctive stations, and the existing Midway station didn’t open until 1978.

    The current Amtrak station is out in the middle of no-where. The renovation of the Union Depot and restoration of a train station in the downtown will be a vast improvement. That alone will make it a success. The challenge will be to start to fund Amtrak in a manner that will help restore service to levels that made it a viable alternative to air travel. Cuts during the Bush years have left it gasping for survival, and service has suffered as a result.

    And for those of us who remain optimistic that there will be a high speed rail service to Chicago in our lifetimes, this will be the perfect hub. I congratulate all of our political leaders who helped to get this project started.

  10. Submitted by Mike Hicks on 09/19/2011 - 02:31 pm.

    I did end up being surprised by the cost of this when it was finally revealed — the city and county did a good job of hiding the total until the project was ready to begin. Still, this is 1/3 of the cost of the proposed Stillwater bridge, my favorite point of comparison these days.

    It’s probably out on the edge of being financially justifiable, but it’s better to do it now than to wait any longer to fix up the place. If it had been allowed to deteriorate further, there would basically be no option other than to tear it down within a decade or two. It isn’t the perfect spot for a train station and bus depot, but it’s not bad either.

    I do feel that this is an important investment for the future. The depot won’t quite be the hub that its boosters hope for (the Twin Cities is centered more around Minneapolis, so that city’s “Interchange” station planned at Target Field is undoubtedly going to be busier), but it’s an important cultural asset that should be restored and put to as much use as we can manage.

  11. Submitted by craig furguson on 09/19/2011 - 02:34 pm.

    The only thing that has been recently successful in the Union Depot was the Titanic Exhibit. $243 million is a crazy number for two generally late Amtrak trains and a light rail stop.

  12. Submitted by Neal Rovick on 09/19/2011 - 02:36 pm.

    From the Union Station web site:

    ….Union Station Kansas City, Inc. is a non-profit 501c3 organization. We are responsible for raising all funds to cover our many operating costs. Ticketing sales, memberships, retail sales, leases, facility rentals and corporate sponsorships currently account for only 36% of operating income. To cover this balance, the Station relies on endowments, contributions, grants and public support from you….

  13. Submitted by David Greene on 09/19/2011 - 03:02 pm.

    @Neal

    I think Seth has a good example with Kansas City that is more in line with the type of community we have in the Twin Cities. The King Street station in Seattle is another example, though Seattle is much more transit-friendly than we currently are. Indianapolis has a similar facility in its Union Station.

  14. Submitted by James Hamilton on 09/19/2011 - 03:56 pm.

    Both Ramsey County and the City of St. Paul have lousy records when it comes to investment and development.

    One of the county’s bigger mistakes is the RDF facility for which it and Washington County contracted years ago, on the assumption that all mixed solid waste in the counties could be required to be delivered to that facility. The courts around the country said it couldn’t, so they imposed taxes on residential and business waste generators, to be collected by the haulers. When Ramsey County was sued by the haulers, because the county hadn’t used the proper procedures in their attempt, the county found another way to force the haulers to dump waste at the RDF and still collected funds from local residents and businesses. We’re still paying for that today.

    Why a county with a population of 500,000 (down .5% from 2000) would spend $243 million dollars on this boondoggle is beyond me. But then, so were Galtier Plaza, Town Square, the World Trade and Bandana Square, when put on the table by a city that hadn’t seen a population increase in decades.

    At some point, isn’t it time to accept that government bodies simply aren’t good at development?

  15. Submitted by James Hamilton on 09/19/2011 - 04:05 pm.

    @Jon: When you say “effectively reprogrammed” are you referring to the multiple bankruptcies through which Galtier Plaza changed hands, each time at a lower fraction of the cost of construction? (If I recall correctly, the last sale was for about 10 cents on the dollar.) Hasn’t essentially the same thing occurred at each of the other facilities? How much did the City of St. Paul /Port Authority lose on each of these?

    By the way, are you this Jon Commers?

    “I run a small consultancy based in St. Paul, Minnesota US, providing public finance and strategic services to clients involved in urban planning, development, engineering, and public work.”

    If so, do you have a financial interest in this project?

  16. Submitted by James Hamilton on 09/19/2011 - 04:11 pm.

    While I’m at it, perhaps each of those commenting here would care to disclose their personal interest in the project, for those of us not in the know. For example, is Mr. Greene the same David Greene who sits on the City of St. Paul Transportation Taskforce chaired by a Jon Commers?

    FWIW, I’m simply a St. Paul resident and taxpayer, who fully expects to have to pay for this when it goes south.

  17. Submitted by James Stolpestad on 09/19/2011 - 04:12 pm.

    I agree that the article is entirely too negative. Believe it or not, Steve, there are examples of retail in Saint Paul that has not “flopped” but I haven’t seen any such positive coverage by your or your colleagues.

  18. Submitted by Patrick Seeb on 09/19/2011 - 05:07 pm.

    Steve,

    I am happy to see you writing for MinnPost. It’s good to have you back as a journalist and commentator.

    With respect to this editorial, I believe it would have been far stronger had you examined the Union Depot project in the context of the overall strategy for revitalizing the Lowertown neighborhood. Even the most pessimistic would have to admit that its transformation over the past 30 years is nothing short of remarkable. And it remains a work in progress…Union Depot is another big step forward.

    Observing the shortcomings of Town Square, Bandana Square, Galtier Plaza, and World Trade Center, might be reasonable, though an unfairly narrow and dated comparison. Why not reference the Xcel Energy Center/W 7th District, which is experiencing phenomenal growth? Or Grand Avenue, which is one of the strongest retail districts in the metro area?

    Both of these are more current examples of Saint Paul’s retail experience.

  19. Submitted by Ray Marshall on 09/19/2011 - 06:12 pm.

    I think it is an excellent, realistic, article.

    The vast majority of the riders on the Light Rail will get off at the State Capitol stop.

    There will be some who will save lots of money on parking if they work in downtown St. Paul and live along University Avenue or in Minneapolis.

    Some auto commuters might be able to find free parking along University someplace and then catch the train downtown. But if merchants and residents sense that is happening, the NIMBY movement will start putting limits on parking near University Avenue.

    Nobody ever says it, but St. Paul’s retail center is University between Hamline and Snelling, and that won’t change.

    The Excel Center is a wonderful asset for St. Paul, but it is a bit of a walk from the Light Rail Line. I doubt that it will contribute more development because events there.

  20. Submitted by Charlie Brose on 09/19/2011 - 07:11 pm.

    In order to properly service the Amtrak line that currently runs here they must be willing to provide retail and dining services during the hours that train passengers will be arriving. That is the early morning and late evening arrival/departures of the Empire Builder.

    Having been a passenger going either way on that line, it would be nice to have somewhere to have a meal either before my trip or upon arriving back.

  21. Submitted by will lynott on 09/19/2011 - 08:08 pm.

    I’ve been following Dornfeld for many years and he has never wavered from finding the most utterly negative way to present an issue. Consistent, yes, but also tiresome.

    The fact is that a lot of people want the Union Depot project to succeed, and they all have their (various) reasons. They’re also all taxpayers and they all vote. I know it deflates your conservative soul, but who are you to tell them how to spend their tax dollars?

    Tell me–would you rather go downtown and get on a high speed train to downtown Chicago, or fight your way to an airport parking lot three hours before take-off, get strip-searched, and take about the same amount of time to get to O’Hare, which is miles from downtown?

    The possibility that the dollars and cents, which is all you care about, don’t add up to your personal satisfaction, is mildly interesting but irrelevant.

    BTW, MinnPost, can you at least find an image that doesn’t make him look so angry?

  22. Submitted by Seth Rowe on 09/19/2011 - 08:32 pm.

    Good find, Neal. I did wonder about the finances there but didn’t have a chance to investigate further today. Still, they’ve been operating at a high level for more than a decade, at least in terms of activity, so it might be worth a look for planners studying St. Paul’s Union Station. KC really made an old abandoned station into a main attraction and destination there.

    Of course, I don’t know if the St. Paul station could offer this particular attraction (from KC’s mobster history):

    Q: Where are the bullet holes from the 1933 Union Station Massacre? A: There are marks on the front of the building that were supposedly created by bullets from the 1933 Union Station Massacre. You can find these marks near a sign about the massacre at the main front doors on the eastern end. If you can’t find them, ask at the Information Booth.

  23. Submitted by Brian Hutchins on 09/19/2011 - 09:17 pm.

    @david greene “though Seattle is much more transit-friendly than we currently are” That is really not accurate. I lived in Seattle for a dozen years up through the mid 2000s and while it may be true that the conversation around transit is better received, the wheels on the ground are what matters. The Twin Cities has a better organized, better funded transit system. There are a lot of great things about Seattle, but I would not be bragging on their transit system.

    As regards Union Station in St Paul, organizing it as a non-profit, as KC did, is probably the best idea.

  24. Submitted by Bob Spaulding on 09/19/2011 - 11:37 pm.

    As a close observer of downtown St. Paul and resident of downtown for the last dozen years, I’d offer a couple detailed insights.

    Each of the aforementioned less successful downtown retail malls followed a national trend. In the 1970s or 1980s, enclosed retail malls and festival marketplaces were built at the heart of downtown. But after a decade or two, as the economic models that underpinned these retail locations weakened, we saw them transition largely to office-service uses, which as the retailing industry changed, enjoyed a competitive advantage in bidding for the space. That same general transition has played out in downtowns across the United States, including Minneapolis – think City Center, Gavidaae Common, Riverplace, and the former Conservatory. There have been only a few exceptions, generally in the biggest of cities where national chains can find a sustainable foothold. Some cities have found ways to manage that transition more gracefully than others, but the same basic arc holds.

    It’s also very significant that each of the erstwhile downtown St. Paul malls had several times as much retail square footage as Union Depot’s 56,000 square feet of retail – in the hundreds of thousands of square feet apiece – Galtier was built with 120,000 square feet of retail; Wells Fargo Place/WTC about 170,000 square feet of retail; and Town Square a similar amount. And there were three of them simultaneously in downtown St. Paul, competing for a limited market. Union Depot is a paltry 56,000 in comparison, some of which has long been leased already.

    And so it’s wise to remember that the Union Depot was already home to a Christo’s restaurant (which is reopening soon) and a Lee Ann Chin restaurant (closed after its lease was not renewed a couple years ago by a former owner of the depot’s headhouse in preparation for a residential conversion project). Neither restaurant found endless crowds, but even pre-LRT and pre-rennovation, both found their business sufficiently lucrative in that very space to put down roots for many years.

    Downtown St. Paul, and Lowertown in particular, has seen a robust growth in the residential construction in the last 20 years, and in particular people with ample discretionary money to breed success in a place like Union Depot. This project represents just a fraction of the retail environment of the 1980s downtown, and already has shown the ability to attract long-term tenants. Reading and understanding those trends, it’s hard for me not to conclude the future will be ever brighter for Lowertown and Union Depot, and hard not to see this as the sort of project the marketplace can reasonably absorb in the years ahead.

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