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Riverside Plaza: One more effort to revive a ‘new town — in town’

Riverside Plaza circa 1975
Photo by Steve Plattner/Courtesy of the Minnesota Historical Society
Riverside Plaza circa 1975

The Strib’s James Lileks admires the complex of high-rise buildings in Minneapolis’s Cedar Riverside neighborhood, but only from a distance.

“The size is impressive, and the colored panels … give it a lively appearance, like the world’s largest Mondrian painting,” Lileks writes. But when he gets closer to the complex, now known as Riverside Plaza, the columnist takes a decidedly different view: “Close up, it’s ugly gray concrete in amounts usually used to describe the Hoover Dam.”

Riverside Plaza is back in the news these days because the developer who manages the massive housing complex is seeking city assistance to refinance the project and reorganize its ownership structure.

The origins of the project extend back to the early 1960s, when Keith Heller, a faculty member in the University of Minnesota’s School of Business, teamed up with Martin Segal, a U of M Medical School professor, and his wife, Gloria, to establish a real-estate investment venture.

Dr. Segal became a silent partner in the venture, but Gloria Segal emerged as the public advocate for their investment group. Calling themselves the Cedar Riverside Associates (CRA), the partners began buying up property around what would soon be the university’s West Bank campus in the historic but dilapidated Cedar Riverside neighborhood.

Lofty goals
CRA aimed to make money for its investors, but it had loftier goals. Heller and Segal believed they were promoting community improvement through their ambitious plan to eliminate the Cedar Riverside slums and replace them with a modern new high-rise development that could provide mixed-income housing adjacent to a rapidly expanding public university.

By 1968, CRA had received backing from HUD for its plan and commissioned Ralph Rapson, the head of the university’s School of Architecture, to design its “New Town — In Town” in Cedar Riverside.

Heller and Segal were ambitious developers, but they were also landlords for a group of young people who crowded into the dilapidated CRA-owned properties that were slated for demolition as redevelopment of the area got under way. 

Many of these new residents were former and current students at the university who considered themselves part of the counterculture of the 1960s. “Minneapolis’ own Haight-Ashbury,” some would call this down-at-the-heels neighborhood, controlled in large part by the Heller Segal group.

A prolonged struggle with young tenants
When CRA tried to raise rents in its buildings, that action sparked a rebellion. Soon, the real-estate developer was engaged in a prolonged struggle with its young tenants, who were caught up in the social and political ferment of the era. Even with its professed goals of social and economic uplift, CRA was viewed with disdain by the ideologically committed young activists who had protested against U.S. involvement in the Vietnam War and now were organizing against what they saw as another oppressive institution that was much closer at hand.

CRA was able to complete construction of its development’s first phase, known as Cedar Square West, but its financial empire eventually collapsed in the face of lawsuits by neighborhood residents and the economic pressures caused by a declining real-estate market in the 1970s.

After the collapse of CRA, Cedar Square West was reorganized through a series of complex public-private partnerships that sought to maintain the project’s federal housing subsidies. East of Cedar Avenue, where the Heller Segal group had hoped to build the next phase of its ambitious development, the student activists were able to take control of the redevelopment process. There, working through their own nonprofit organization, the West Bank Community Development Corp., they proceeded to build and operate a series of small infill residential projects, many of which were organized as moderate-income housing cooperatives.

Today, the former Cedar Square West, renamed Riverside Plaza, has more than 4,000 residents, many of whom are East African immigrants. The project, which opened in 1974, is in poor condition and needs a major overhaul. Last month, the Minneapolis City Council moved ahead on a revitalization plan for the once heralded “New Town – In Town” by authorizing the city’s development arm to issue tax-exempt revenue bonds for the 1,300-unit rental development.

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Comments (10)

  1. Submitted by Bill Schletzer on 08/04/2010 - 09:33 am.

    As in the 60s, no one who could afford it would want to live in this high-rise dump. I remember my friends back then who had to pay rent to Heller-Segal for other “dilapidated” housing in the area. My friends considered them to be slum lords out to make a buck and it had nothing to do with being “caught up in the social and political ferment of the era”. It had to do with greedy real estate pigs coming in, buying up all the property, raising rents and mistreating tenants in order to clear the area for their publically subsidized cash cow. Now, once again, their boondoggle comes back to bite the public in the rear.

  2. Submitted by Hénock Gugsa on 08/04/2010 - 11:29 am.

    This is a wonderful article, Mr. Nathanson. Thank you.

    Indeed, today, the Cedar Riverside Complex does look like a dilapidated urban renewal project. But back in the Seventies and even thru the early Nineties, the place was a thriving hub of various ethnic communities living side by side in harmony. Every summer (in August) the whole neighborhood used to hold a festival that everybody remembers with fondness.

    Sadly, the whole neighborhood is now overrun by mostly one ethnic group that is always in the news for one thing or another (mostly negative.) In effect, CRA is mostly a section 8 housing community that has been nicknamed “Little Mogadishu.”

  3. Submitted by Hénock Gugsa on 08/04/2010 - 11:44 am.

    Please tell me that Keith Heller is (was) no relation to Walter Heller.

  4. Submitted by Bill Schletzer on 08/04/2010 - 12:19 pm.

    It has been a hub for ethnic communities because it is a cheap, crowded place to house poor people who have no other choice. It is a vertical ghetto. The people and the life they brought may be remembered with fondness but this human warehouse has never been remembered so. I knew some people there in the 80s and it was a pit that I felt nervous entering after dark.

    Why is it sad that the Somalis are here now? Little Mogadishu sounds a little condesending. Was it once referred to as Hmong World or Little Hanoi or the Plymouth Avenue annex?

  5. Submitted by Hénock Gugsa on 08/04/2010 - 01:53 pm.

    It is a perplexing thing to find oneself … on the one hand indignant and irritated at the absence of political correctness … while on the other hand, professing to feeling ‘nervous entering [this neighborhood] after dark.’

    A few friends and I used to live in that neighborhood, and would like to see it get revived and thrive. However, let’s face reality. It will not be condescending to say that a community reflects its residents, and should not depend on outside forces (including the landlords) to flourish. As things stand, the residents there, themselves, probably want to move somewhere else nicer.

  6. Submitted by Bill Schletzer on 08/04/2010 - 02:22 pm.

    So the people of little Mogadishu are sad? You lament it and say it is reflection of who lives there. What do you dislike about them?

    I had friends in that neighborhood and lived there for awhile in the early 70s, during its dilapidated prime and I always felt safe. When I visited friends in those high rises later in the 80s, those silent, empty corridors and news reports of shootings in the lobby and things my friends said made me cautious there at night. I believe my friends who lived there felt the same way at times, nothing politically correct or incorrect about it. There are neighborhoods in every big city where black or white, it can be dangerous to walk those streets at night. That has nothing to do with political opinion or skin color. Maybe you have never been in such a situation.

    PS, slum lords can make a difference in the liveability of a neighborhood. Just being a poor population doesn’t make it unliveable. Look at the north side now with all the abandoned homes due to crooks stripping value out of the area with their realty scams.

  7. Submitted by Greg Kapphahn on 08/04/2010 - 02:37 pm.

    The Riverside Complex has always looked like a Soviet Housing block to me. If you took away the colored panels, which are strictly cosmetic, it would look even more like that. Never having entered the buildings I wonder if their interiors are as starkly cold and uninviting.

    There are many underlying questions regarding the function and functionality of this complex, however: Even if were completely rehabbed, would it be at least a reasonably desirable place to live? If it were gone, would there be other, reasonably adequate housing available for its residents?

    Considering the various populations that have dominated as residents over the decades, has it not been a useful stepping stone; a place for newly-arrived folks to start before those folks move up and out into better quarters and more prosperous lives?

    Could we provide alternative housing that was any better for its residents if the Riverside Complex were redeveloped into something else?

    Although you and I might not want to live there, it’s possible, even likely that the Riverside Complex serves a useful purpose in the city of Minneapolis, a purpose that needs to be served for a population that would be hard pressed to find anything like adequate housing if the Riverside Complex disappeared.

    Of course, there are those in the area with the Lino Lakes mentality who might like to see Riverside disappear in the hopes that “those people” wouldn’t come to Minneapolis in the first place and who believe that the city would be better off without them.

    Those folks need to take a look at places like Nicollet Avenue north of Lake Street and take notice of what the arrival of new immigrants has done to restore what had been nothing but empty store fronts and urban blight.

  8. Submitted by Hénock Gugsa on 08/04/2010 - 03:47 pm.

    Yes, the people of “Little Mogadishu” are sad because they know that they cannot really lay roots here. It is only a temporary place for them, sort of an oasis. They would relocate elsewhere at the drop of a hat. I don’t have to profess here whether I like them or dislike them, and I’ll confess that political correctness is not my strength. I think hypocrisy is a worse sin.

    I do not know why offense is taken at the term, “Little Mogadishu.” Aren’t there other places called Little Prague, Little Italy, etc. in other parts of the country?

    As for the “sad” part, I was commenting about the fact that the neighborhood consists largely of one group that is not trying very hard to improve its image in the media. I did not say that it is sad that Somalis are here now. I did not even specify the group I was talking about, and yet you jumped on it. That seems to have strengthened the point I was making, however. Heck, this is not just local knowledge. But, let me stop … we are digressing to an area that is outside the domain of this blog.

    A final point: I don’t remember the CRA itself as “dilapidated” in the mid Seventies. True, the surrounding neighborhood was not that great-looking; the place has always looked old. And, as you say, ” …[you lived there] during its dilapidated prime and [you and probably a lot of folks] always felt safe.” But do you feel safe there now? And do the Somalis who fled big Mogadishu?

  9. Submitted by Beryl John-Knudson on 08/05/2010 - 08:59 am.

    Cedar Riverside was once originally,main street Mpls where Bohemia Flats became a home; a stopping place for Swedish, Danish, Irish immigrants; Conamara Flats etc..

    When McCosh left his infamous bookstore in Dinky Town, he moved into the old fire hall off Cedar and for a time it looked like the West Bank was sucking the life out of Dinky Town…but it didn’t, totally and Bob Dylan legends refueled it for awhile…

    Cedar-Riverside has had so many ‘growing pains and stages of deconstruction and reconstruction; destructive concepts over the years but stubbornly always knew who or what it was intended to welcome…it always embraced the root culture of a developing city whatever the time period.

    Must have been a curse by a few Irish immigrant banshees or Scandinavian trolls that turned high-rise into project-blight.

    Cedar-Riverside has had its day many times but always recognized the bohemian culture; the creative, non-conformist within an urban social structure who are, desperate to survive no matter what…

  10. Submitted by Gib Ahlstrand on 10/25/2016 - 05:52 pm.

    Heller Segal properties

    Wow, old blog! I’m the latest to weigh in since 6 years! Oh well, better late than never, eh?

    I lived in the neighborhood, east side of Cedar near 5th St and 19th Ave S that never got developed into high rises. I too was against the hi-rise development, but I just gotta say that my 2 roomies and I rented a nice 2 Br apartment in an old house that had been divided into a 4-plex for a lousy $95 (split 3 ways!) per month INCLUDING utilities, including HEAT during the Minnesota winters. OK, it was just a gas space heater, but it served us well. So, I will give Heller and Segal credit for cheap rent. Now, they may have had an ulterior motive for renting so cheap, but I’ll leave it to others to look into that (buy down any opposition to their master plan?).

    Those were some of the best days of my life at that time. Cheap affordable housing for 3 college students in a vibrant and progressive neighborhood. We watched Cedar-West being built from our west facing 2nd story window. Our old house is still there on 19th, new exterior, but still standing strong. I’m so glad that the concrete hi-rise development stopped at Cedar Ave. Still, I recognize the need that the west side high rises serve for new communities arriving in our state, just repeating the pattern of immigrant movements into and then throughout our state and nation, as many other ethnic groups have done before.

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