Days after St. Paul voters approved a new voting initiative that caps residential rent increases at 3% per year, Ryan Cos. informed the city that the development company will be halting construction on several Highland Bridge buildings.
All four projects are multi-family housing buildings where investors have balked at the prospect of moving forward under a rent control mandate, according to the developer.
“We were about to review the permits and we suspended it,” Maureen Michalski, vice president of real estate development at Minneapolis-based Ryan Cos. âIt’s in response to specific conversations with capital providers and conversations with our partners. We have partners who are owners and investors in the buildings. There are other places in the metro where people can invest their money. Regardless of the type of development, people have options.
PROJECTS STILL IN PROGRESS
That’s not to say that the former 133-acre Ford Motor Co. manufacturing campus won’t be turned into a residential hub in Highland Park. Other projects at Highland Bridge are already fully funded under construction or in planning, from a new Lunds & Byerlys grocery store to senior housing and a medical office building.
And given the demand for housing and the allure of developing a corner of town overlooking the Mississippi River, some critics have questioned whether investors will be returning to the table in the coming months.
Michalski declined to identify specific investors who pulled out, but stressed that there was a ripple effect.
Highland Bridge development funding is structured in such a way that market rate units subsidize affordable housing on the same streets, using property taxes on the spot. Overall, 20% of the 3,800 housing units on the site are expected to be affordable.
âWe think it’s convincing enough for people,â she said. âIf you lose the units at the market rate, you lose the affordable units. This is the financial mechanism.
Saint-Paul Mayor Melvin Carter has vowed to work with city council on a possible amendment to the ordinance that would exempt new construction from the “rent stabilization” mandate.
Council members, however, expressed concern that imposing fundamental changes to a voter-approved law could override the will of voters and open the city to litigation. Under the city charter, however, the ordinance could be repealed entirely after one year, and then replaced with a new ordinance.
Council member Chris Tolbert, who represents Highland Park, said the city is working to clarify aspects of rent control, which will come into effect in May, including how to request exemptions. This could further reassure investors.
âThe projects (Highland Bridge) that are already in the ground are still moving forward,â Tolbert said. âOne of the things that we have an obligation to do – and I think we are working on it – is to bring some certainty. I think most developers take a break to figure out the lay of the land. Based on the conversations I have had, I think the funding issues are legitimate.
Here is an overview of the status of the projects.
The Collections, Phase 2: Just south of Bohland Avenue at Cretin Avenue, Weidner Apartment Homes planned the second building in the series known as ‘The Collections’, a 180-unit apartment building next to the central water feature of Highland Bridge. Michalski said the project had gone through the city’s permit review process for construction to begin in December. It is now on hold.
Condos and apartments: On the other side of Avenue Cretin and the future Lunds & Byerlys, the Ryan companies have planned three residential buildings that would probably have been under construction next spring. They include two condominiums as well as a multi-family apartment complex in a north block along Ford Parkway. All three are on hold. Owner-occupied condominiums are affected because they are physically connected to tenant-occupied apartments.
The Collections, Phase I: On Cretin Avenue, the Lunds & Byerlys will be located in a mixed-use development covering 230 apartments and 56,000 square feet of retail space. Weidner Apartment Homes’ âCollectionsâ project will open next summer.
Presbyterian Homes Marvella retirement home: Construction is underway on 300 units of retirement homes. Completion scheduled for spring 2023.
Square and body of water: The construction of the Civic Plaza and a central water body should be completed by the end of the year. The Civic Plaza will be an outdoor staging area that will be used for small events. The central water feature and surrounding trails will span over 5 acres.
Parks: Two of the four planned parks will be completed by the end of the year. Gateway Park will span 3.65 acres and will include a water fountain, skate track, seating, walking trails, game tables and other amenities. Unci Makha Park will cover 6.39 acres and will feature volleyball courts, dog park, nature playground, walking trails, hammock area, outdoor fitness equipment , a park shelter and more.
Mississippi River Boulevard Crossing: Construction of the first phase of the Mississippi River Boulevard Crossing – a future tunnel connecting Highland Bridge to Hidden Falls Regional Park – is complete. The boulevard has reopened, but work under the boulevard will continue until spring.
Doctor’s office: Groundbreaking takes place in December for a future two-story, 60,000 square foot medical office building that will feature M Health Fairview.
Terraced houses Pulte model: A 15-block townhouse neighborhood will span 325 fully-built townhouses. The models will open in January. The first moves are due to begin next summer, with Pulte taking care of the sales himself. Six townhouses will be designated affordable housing through a partnership between Ryan and Twin Cities Habitat for Humanity. Pulte recently posted a 12 minute video explaining their development and sales process, which will begin with 22 units.
Custom homes: Since February 8, the Coldwell Banker Realty-Crocus Hill brokerage team has been involved in the sale of lots of custom homes along Mississippi River Boulevard. At least 20 of the 34 lots have been put up for sale. The fences are expected to start on December 1 and 2. “They will probably range from $ 1.5 million to $ 3 million,” real estate agent Jim Seabold said Monday.
Emma Norton Residence / Water restoration: Project for Pride in Living, a Minneapolis-based affordable housing provider, is planning a five-story community at 801 Mount Curve Blvd. which will serve as the organizational headquarters for Emma Norton Services, which provide social services to women in need. The building will cover 60 units of âsupervised housingâ attached to 6,700 square feet of administrative and social services offices.
Pride Project at Living’s Nellie Francis Court: This would be a five-story multi-family building covering 75 residential units for low to moderate income workers at 2285 Hillcrest Ave.
CommonBond Communities: By next summer, construction is expected to begin on 60 housing units for low-income seniors.