St. Paul officials and civic boosters understandably were excited last week when Gov. Mark Dayton allocated $25 million in state bonding to help build a new Saints ballpark in the city’s already bustling Lowertown district.
The 7,000-seat, $54 million facility, which also will serve amateur baseball, will complement the bars and restaurants springing up in Lowertown. It also will generate event ridership for the Central Corridor light-rail transit (LRT) line now under construction between downtown Minneapolis and downtown St. Paul.
“The ballpark will bring hundreds of thousands of people to downtown, will create hundreds of new, well-paying jobs, and its construction will represent our community and our values,” said Mayor Chris Coleman. “This is a defining moment for our city.”
It will build upon the success of Xcel Energy Center, the NHL hockey and entertainment venue secured by another Mayor Coleman (Norm) in another defining moment for downtown.
But the new ballpark — slated for completion in 2015 — hardly spells the end of the serious economic challenges facing the downtown area of the region’s smaller twin. Among the daunting questions:
Will Macy’s remain open?
As of Dec. 31, Macy’s will be free to close its downtown St. Paul store without being required to repay a $6.3 million city loan, plus interest. In 2001, to retain its only remaining major retailer, the city gave what was then Dayton’s a forgivable loan to help renovate and downsize the store in the heart of downtown.
However, the St. Paul store often resembles a ghost town, even during the holiday shopping season, with clerks almost as hard to find as shoppers. Earlier this year, the store reduced its hours, closing at 6 p.m. on weekdays and all day on Sunday.
Cecile Bedor, director of the city’s Planning and Economic Development Department, says she and her staff are in “constant contact” with the management at Macy’s and “we don’t have any indication today that they plan to close.”
While not making any grim predictions, longtime Twin Cities planner John Kari says, “I think they need a Plan B” for the Macy’s site.
Will Union Depot succeed?
Ramsey County and its project partners have sunk a hefty $243 million in public funds into the acquisition and renovation of St. Paul’s historic Union Depot. They have touted it as “the premier multimodal transportation hub of the region,” as well as “a new platform for growth in St. Paul.”
The county has hired the Chicago firm of Jones Lang LaSalle at $300,000 a year to manage and market space in the building, which has 56,000 square feet of leasable retail/restaurant space and 38,000 square feet of public space.
The challenge will be building up enough foot traffic in the depot to make it attractive to prospective tenants. The depot will be served by just two Amtrak trains a day, plus Metro Transit and Jefferson Lines buses. Greyhound has decided not to stop at the depot and instead will operate all of its buses out of downtown Minneapolis.
LRT trains will stop at a station in front of Union Depot, but riders will have little reason to enter the depot unless there are attractions to entice them.
While construction is scheduled for completion this fall, county spokesperson Josh Collins said this week they are not yet prepared to announce when trains will start using the depot or whether any new tenants have been secured. (The lobby area long has been home to the Greek restaurant Christos.)
Will LRT attract downtown development?
During the final stages of LRT planning, city officials persuaded the Metropolitan Council to re-route the rail line diagonally through the block bounded by Fourth, Fifth, Cedar and Minnesota streets and locate a station there.
The Met Council’s original plan was for the line to make a right-angle turn at Fourth and Cedar. But city officials and consultants saw the block with an LRT station as “an unparalleled opportunity for new development in the heart of downtown,” possibly attracting “a high profile national headquarters.”
The change in plans added $8 million to $10 million in costs to the LRT project, including the acquisition of four properties, the demolition of the former Bremer Bank and the construction of a new, block-long skyway.
Bedor and city planner Lucy Thompson say they continue to believe Central station is a prime site for redevelopment. Thompson says there has been “a little bit of interest” in the site so far and that she expects a lot more interest once light rail begins operation in 2014.
In the meantime, they say they are focusing on developing a vertical connection from Central station to the skyway system. Thompson says they have identified a location on Fifth Street and developed a schematic design for this structure but still are working on the financing. “We are really committed to it and intend to have it built, probably next year.”
Kari, a planning consultant and the Met Council’s leading planner for several decades, believes downtown St. Paul’s days would be numbered in the absence of light rail, but he sees little likelihood of the city landing an office tower at the Central station site. “I think what they need to do is make it into a really nice transit plaza — a central plaza for St. Paul.”
Indeed, Kari believes city officials would be well advised to start thinking about downtown as an “activity center” rather than a traditional downtown, capitalizing on its strengths as a government, entertainment and cultural center, and as a place to live.
While downtown employment has declined and retailing has all but disappeared in recent decades, the downtown population has more than doubled since 1980, climbing to more than 7,000. Downtown also has prospered as an entertainment center with the Ordway Music Theater, the Science Museum of Minnesota, the Children’s Museum, the Xcel center, the nearby Minnesota History Center, plus smaller attractions.
“I think downtown St. Paul has a bright future,” Kari says. “But the economy has changed. Banking, retailing — so much of it is done online. It is never going to be the downtown it was in the 1970s.”
Like many of its peers, downtown St. Paul has had considerable difficulty attracting new development. For most of the last decade, Ramsey County has been marketing the site of its former jail and the former West Publishing building on Kellogg Boulevard overlooking the Mississippi River as a major redevelopment opportunity.
Opus Northwest briefly had an option to purchase the six-acre site, hoping to build a $200 million office, hotel and housing project. But the firm relinquished that option in 2008, and not much has happened since.
In addition to the depressed economy, there simply is no shortage of office space in downtown St. Paul. The latest report from the St. Paul Building Owners and Management Association (BOMA) indicates that 21.1 percent of the competitive office space in downtown is vacant. That includes 14.3 percent of the Class A space.
In the last several years, city government has become the developer of last resort for downtown. The city rescued and completed The Lofts at Farmers Market, a 58-unit, $13 million apartment project at Fifth and Wall Streets in the Lowertown area.
The city also took over and downsized the troubled Penfield development just south of I-94 between Minnesota and Robert Street. With the help of a $41 million federal loan, the city is now building a $62 million development with 254 apartments and a 27,000-square-foot Lunds grocery store.
Bedor says these two projects were “very unique.” In the case of the Lofts project, she says, the city already had “a hole in the ground” when the developer fell by the wayside. Bedor says the city stepped in and “really proved the market” for high-end apartments in the downtown area.
In the Penfield project, Bedor says, it provided an opportunity to not only expand the supply of high-end apartments, but also “capitalize on Lunds’ interest in being downtown.”
Nonetheless, she adds, “We don’t have any interest in being a developer. We think the private sector does a really good job at that.”