Minneapolis, MN
Minneapolis cuts red tape for developers turning office buildings into housing • Minnesota Reformer
Minneapolis Mayor Jacob Frey signed an ordinance Tuesday that will ease the regulatory burden on developers who want to turn empty office buildings into apartments.
The move is expected to cut costs for developers and signal to private investors that Minneapolis is “open for business,” said Michael Rainville, a Minneapolis City Council member representing parts of downtown.
U.S. cities are still dealing with the fallout from the COVID-19 pandemic. The number of people working from home is well above pre-pandemic levels, and the value of office buildings is dropping as companies opt to downsize or sell their spaces. That has significant implications for the city’s budget, which depends both on sales taxes and commercial property taxes.
Declining Minneapolis office tower values are pushing the city’s property tax burden onto homeowners. Homeowners paid around 47% of the city’s tax levy in 2023, and this year will pay more than 51%, Axios reports.
Nationwide, offices are increasingly becoming housing, but developers face city zoning restrictions, challenging construction and relatively high (but falling) interest rates.
Minneapolis leaders hope the conversion of empty office buildings into housing will increase the number of people downtown, stabilize tax revenues, attract more businesses and increase safety.
“This is no longer going to just be a place where people come in to work at 8 a.m. and leave at 5 p.m.,” Frey said.
Under the new rules, commercial-to-residential conversion projects will not be subject to public hearings — instead, the plans will only require approval by city staff. The ordinance will also exempt projects from intensive traffic studies and from an inclusionary zoning ordinance that requires developers to designate a portion of apartments as “affordable housing” or pay large fees instead.
Converting an existing office building into housing doesn’t need the same level of public input and traffic study as a brand-new building, Frey said.
“Time is money and uncertainty is money,” Frey said. “If we can cut down on the uncertainty and cut down on the time frame that it takes to get this done, more owners and developers will choose to make that shift.”
City leaders and developers also want more incentives from the state and federal governments. A bill (SF5194/HF5191) introduced in the 2024 legislative session would have created a tax credit for developers who convert vacant or underutilized buildings into housing or mixed-use spaces. The bill did not pass.
Minneapolis, MN
North Minneapolis shooting injures 2 near Logan Avenue
A shooting in north Minneapolis injured two men on Friday night.
Minneapolis police said officers responded around 9:30 p.m. Friday after multiple reports of gunfire near Lowry Avenue North and North Logan Avenue.Police said they found two men with gunshot wounds outside a home.
Officers said both men were outside when the gunfire started and a nearby hospital treated both men for non-life-threatening injuries.
Police are still investigating. Officers said no arrests have been made.
This is a developing story; check back for updates.
Minneapolis, MN
Man, 19, hospitalized after shooting in north Minneapolis; no arrests
A 19-year-old man is injured after a shooting in north Minneapolis on Friday, according to police.
Officers responded to the incident on the 2600 block of North Humboldt Avenue at 5:03 p.m. Officials said they found the man inside a home with apparent gunshot wounds that were not life-threatening.
The officers provided medical aid before the man was taken to the hospital, police said.
According to investigators, the man was outside the home when shots were fired and ran inside after he was injured.
Police said Friday night that no arrests had been made and that they were working to learn what led to the shooting.
Minneapolis, MN
Affordable senior housing revived at 600 Main St. SE
The Blueprint
A team led by Lupe Development Partners and Wall Cos. wants to bring more than 100 units of affordable senior housing to a triangular parking area near the Mississippi River in Minneapolis, the latest version of a yearslong effort to redevelop the site.
On Thursday, the Minneapolis Planning Commission Committee of the Whole reviewed plans for the five-story, 104-unit building at 600 Main St. SE. The project would require a comprehensive plan amendment, rezoning and other approvals.
Jess Olstad, a city spokesperson, said in an email that the committee took no formal action.
“The next step for the project team will be to conduct public engagement around their potential comprehensive plan amendment, and to prepare their land use applications for submittal,” Olstad said.
Steve Minn, vice president and chief financial manager of Lupe Development, said Friday that the project received “very positive feedback” from the committee.
“We’re just going to proceed with the rest of our application, which will be in the next week or so,” said Minn, who added that the proposed location is a “perfect site for housing” and that “senior housing is a need.”
A comprehensive plan amendment would require Metropolitan Council review. If the approval process goes well and financing comes together next year, the project could break ground in 2028, Minn said.
A 58-space “principal parking facility” currently occupies the 37,401-square-foot development site, which is framed by Sixth Avenue Southeast, Main Street Southeast, and a railroad property, according to a city staff report.
The project would primarily offer one-bedroom units, though the mix would also include some two-bedroom dwellings and efficiencies. Thirty-nine stalls of underground parking are also planned.
Located near the Stone Arch Bridge trailhead in the Mississippi River Critical Area Overlay District, the project would be “compatible with the surrounding neighborhood architecture,” according to a narrative submitted on behalf of the developer.
The plan includes site improvements such as structured parking and pedestrian spaces, and a new public trail, which would connect to existing Minneapolis Park and Recreation Board trails in Father Hennepin Bluffs Park.
According to the developer’s narrative, the project “represents a reinvestment in a privately owned, undeveloped parcel that is not used for park purposes and is not planned for acquisition.”
The project would align the property’s “land use, built form, and Mississippi River Corridor Critical Area Overlay District designations with the surrounding urban context and applicable regulatory framework,” the narrative states.
Wall Cos. and Lupe Development Partners, doing business as Bluff Street Development, have long wanted to redevelop 600 Main St. SE. In 2023, the developers pitched a plan for 80 affordable housing units on the site.
The developers’ history with the site goes back as far as 2009, when they proposed separate plans for a 98-unit and a 79-unit apartment project, as previously reported. In 2010, Bluff Street sued the city after the City Council rejected the plans. The lawsuit was dismissed in 2011.
When development efforts first started, the Mississippi River Critical Corridor Area rules and regulations had not been defined, and “there was a lot of angst in the community” about what those regulations would be, Minn said.
Those regulations are now “well defined,” clearing the way for development, he said.
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