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Everything you need to know, for now, about Minneapolis’ Upper Harbor Terminal project

On Friday, the Minneapolis City Council will vote on a massive plan to turn 48 acres of riverfront land into housing, businesses and an outdoor performance venue. 

Concept rendering of the community performing arts center
Concept rendering of the community performing arts center at the Upper Harbor Terminal.
City of Minneapolis

On Friday, the Minneapolis City Council will vote on a massive plan to turn 48 acres of riverfront land into housing, businesses and an outdoor performance venue. The project — the Upper Harbor Terminal is city officials’ No. 1 construction priority right now.

Here’s what you need to know about the first phase of the plan, including the costs, the challenges — and what’s likely to happen after the council’s vote.

The project is located in a critical area

The plan lays out preliminary designs for the land between the Mississippi River and Interstate 94 in north Minneapolis that once served as a barge shipping terminal. Federal authorities closed the terminal to avoid the spread of invasive carp in 2014, and the city of Minneapolis has been studying what to do with the T-shaped piece of property since. It includes portions of Washington and North Dowling avenues and old industrial buildings that now serve as storage, with an Xcel Energy plant as a neighbor across the river.

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The site is also near residential areas (Webber-Camden, McKinley, Hawthorne, etc.) with median household incomes below the city’s and metro region’s levels. And, according to Erik Hansen, the city’s director of economic policy and development, that number is dropping, while the neighborhoods’ population of renters is growing. Because of those trends along with high rates of unemployment, gun violence and high-school dropouts federal authorities have designated the section of Minneapolis as a Promise Zone, in need of more public investments.

At a meeting last week to discuss the redevelopment plan, Council Member Alondra Cano said the community is “rich in culture, rich in language, rich in diversity — but low on capital.”

The plan’s design is likely to change

In its current form, the 34-page plan is a “general land-use concept” including renderings that establish a framework for more detailed designs and construction plans, pending the council’s vote. No engineering has happened, and the project is essentially divided by these five kinds of uses:

  • 300 to 500 units of housing. The conceptual plan does not lay out any building requirements, but it does require nearly half the project’s housing units to qualify as affordable housing with costs lower than market rate. Project leaders want those units to serve people who earn 60 percent of the area’s median income (AMI) and, potentially, those in the 30 percent AMI, too — the latter of which is about $28,300 for four-person family, according to officials. “We will work with the project team and the community to find ways to further subsidize units so that the rents are comparable to what we see for families in the area,” Hansen said.
  • New park space. Project leaders want to eventually transfer ownership of 19.5 acres, including the 1-mile waterfront, to the Minneapolis Parks and Recreation Board for it to turn into at least two parks and trails — new infrastructure totaling about $12 million. The land exchange would happen at no cost in lieu of park dedication fees.
  • Retail businesses. The plan sets aside 40,000 to 85,000 square feet for shopping and restaurants along Dowling Avenue to the river parks. That could accommodate up to 20 businesses, Hansen said at last week’s meeting. He and others want the new commercial spaces to foster local entrepreneurship and wealth building.
  • Office space and (maybe) a new hotel. Again, the concept plan does not fully define these properties’ building requirements, since Hansen said they need to have a better idea of the spaces’ tenants before finalizing these and costs. Instead of a hotel, for example, the plan’s “hospitality” component could be a community banquet center or a hostel.
  • A first-of-its-kind utility hub. The plan sets aside a 2.5 acre parcel south of Dowling Avenue for a system that transfers solid and liquid waste into energy and other materials, as well as other environmentally focused spaces, such as marketplaces and a greenhouse. (Council Member Phillipe Cunningham, a leader of the conceptual plan, told his colleagues last week that he wanted to include a legal cannabis business incubator here, but legally he could not add that to the city document.)
  • An outdoor performance venue. It is this idea that has generated the most public feedback, Hansen said. Right now, project leaders are weighing three possible designs for the event space, with costs ranging from $26 to $49 million. The city would have a long-term interest in owning land and help secure construction money from the state, while First Avenue Productions would run the space a setup much like the Guthrie Theater and other venues around the city, Hansen said. As part of the agreement, First Avenue has promised to collect fees on tickets to fund free community programs, hire Step-Up interns and contract with northside businesses for things such as posters and beverages. The event center could potentially hold up to 10,000 people.
Upper Harbor Terminal land use
The Upper Harbor Terminal project encompasses 48 acres in total.
Source: City of Minneapolis

The city needs more money to do everything it wants

For the first phase of construction, the plan calls for about $25 million to redevelop the public right-of-way and install utility systems — about $9 million of which the city has secured from state lawmakers in bonding dollars. But even with other local funding, there is a gap in the Upper Harbor Terminal project’s budget, the city’s Chief Financial Officer Mark Ruff told council members. It is not a surprise “to have this level of need,” he said, and the council could decide to use a different pool of money — “available redevelopment dollars” — to fill the hole. With the public spending, project leaders estimate the first phase of construction to generate at least $125 million in private investment.

Multiple designations make up the site context for the Upper Harbor Terminal.
City of Minneapolis
Multiple designations make up the site context for the Upper Harbor Terminal.

The plan has been years in the making

Minneapolis leaders started talking about this section of the city’s riverfront and how more people should be able to access it some 20 years ago. The effort ramped up in 2016 when the Park Board and city agreed on broad characteristics for the project, including goals around community ownership and sustainability. They also established a timeline for design planning.

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Cunningham, who represents the area on the City Council, said he’s worked on the conceptual plan almost every day since his election in fall 2017, and he wants the project’s primary beneficiaries to be people of color.

David Frank, Minneapolis’ director of Community Planning and Economic Development, also emphasized the project’s potential for improving the area’s economy. “We believe this is the city’s top development priority, and we expect to get as many benefits here for the public on your behalf, on the city’s behalf, as we can.” Frank told council  last week.

The  plan’s path to the council was not smooth

Early on, city and Park Board officials picked United Properties as the project’s master real-estate developer, overseeing big-picture concepts and designs. In addition to First Avenue, United Properties added the Minneapolis-based construction firm THOR Companies to its team. Earlier this year, however, THOR notified Minneapolis officials of financial difficulties and said the company is restructuring businesses, Hansen said.

He did not provide further details on the problems and how they could affect the Upper Harbor Terminal project, though he said the business leaders “deserve the benefit of the doubt” and things are likely to work themselves out. The council will get another update on the issue in July.

Adding to the hurdles for project leaders are critics within the northside community. Waving signs and yelling, dozens of people filled council chambers last week to criticize the city’s process of writing the conceptual plan saying it had not adequately sought the public’s feedback, nor taken concrete steps to make sure rising property values don’t push people out of their homes. Several signs read: “Vote no. The plan promotes alcohol, beer, noise, traffic, part-time jobs, public pissing.”

To help quell those concerns, council members made slight amendments to the plan and highlighted the upcoming work of a 15-member community group, which will research the project’s specifics and weigh pros and cons. The city will begin taking applications for the group this spring.

Assets and constraints of the Upper Harbor Terminal design.
City of Minneapolis
Assets and constraints of the Upper Harbor Terminal design.
Council Member Jeremiah Ellison, who represents parts of north Minneapolis, said he has connected with leaders of cities including Austin, Portland and San Francisco to learn what they are doing to avoid housing displacement from similar developments. The work is part of a national “anti-displacement policy network,” he said, in which the Upper Harbor Terminal project will serve as a pilot to “help us address other displacement pressures that are happening across the city.”

“They [critics] feel they are heard,” Cunningham said in an interview Tuesday. “It’s an exciting hurdle to get into the next phase of work.”

There’s still a long way to go

If the council approves the conceptual plan, project leaders will spend roughly 12 months writing what they are calling a “coordinated plan” that will detail the project’s impact on the community and environment, as well as its financial feasibility.

“That’s where the actual meat is,” Cunningham said.

Then, the city will host public hearings as it considers contracts for construction. Project leaders hope to begin an initial phase of building, which includes the performance venue and housing, in 2021 or 2022.

Even with so much of the work still ahead, Cunningham is proud of what’s been done so far to reshape the critical part of his ward. “This is a very high-stakes project because it is not only so costly and so involved, it’s potentially destructive and detrimental to the community” without fair and equitable goals, he said.