A Downtown developer has pulled the plug on a proposal to replace a metal-finishing factory on the East Bank with new condos.
Ryan Cos. had planned as many as 600 condo units in a 20-story tower at the site of Superior Plating, 315 1st Ave. NE, but negotiations ended after Ryan was unable to court a development partner for the project.
“With the glut of condominium projects now, it doesn’t make sense from a timing standpoint,” said Tony Phelps, development director for Ryan, noting that his company is not a traditional housing developer, rather they bring in partners on their projects.
Ryan and Superior Plating had been in talks since last year about the land purchase — a $20 million deal that was to include the industrial metal finisher’s relocation to a new facility.
Predevelopment costs would also have included an estimated $800,000 to $1.8 million to clean up soil and groundwater pollutants on the 5.4-acre site.
Phelps said the relocation and remediation costs did not factor into the decision to end talks. “It was really just developers — specifically housing developers — being a little more cautious right now,” he said.
“You can go into Edina Realty right now,” Phelps continued, “and — especially in central Minneapolis, depending on the price range and size of the unit — you can find anywhere from 200 to 400 available [units].”
Superior Plating will stay for now, said Mike McMonagle, the company’s president. He is still looking at relocation options, however, and has not ruled out the idea of finding a developer for the site.
Last spring, Superior Plating approached five major developers about the project and caught the interest of Ryan.
Asked if other prospective developers are now in the picture, McMonagle replied: “None that I can speak of right now.”
Superior Plating has been in business since 1919 and moved to the East Bank facility in the mid-1950s. The building was constructed in 1900, McMonagle said.
“It’s a good neighborhood; it’s our neighborhood,” he said. “It’s been our neighborhood for 50 years, but it has changed in character. We’re pleased people have come in and joined us.”
During the past year’s negotiations, both McMonagle and Victor Grambsch, president of the Nicollet Island/East Bank Neighborhood Association (NIEBNA) said that Superior Plating has historically been a good neighbor but that the industrial use has become less appropriate in the increasingly residential neighborhood.
“The time has passed when that’s an appropriate site for industrial,” Grambsch said last year when the potential project was announced.
Ground and water pollution
The Minnesota Pollution Control Agency (MPCA) defines brownfields as “abandoned, idle or underused properties where suspected environmental contamination complicates redevelopment or expansion.” The agency says Superfund sites are those with “known or suspected environmental contamination” that “threatens public health and welfare.”
Because of pollution — some of it from when the site housed streetcars, before Superior Plating’s arrival, McMonagle said — the land is designated both a Superfund and brownfield site.
Ryan did some soil testing late last year. According to Phelps, consultants felt that soil contamination has not reached beyond the limestone bedrock beneath the site, but the extent of soil pollution cannot be known while the building stands.
McMonagle said Superior Plating has been controlling groundwater pollution in the one polluted well of the 15 monitored in the area for nearly 14 years. The source of the contamination, somewhere to the north, has not been identified, McMonagle said, adding that the pollution has not reached the river.
He said the remediation process is 99 percent efficient and was recognized with an award in 1999.
A market barometer?
The aborted Ryan project is the largest, if not the first, to drop off the Downtown development pipeline for apparent market concerns. Phelps wondered if other developers would become similarly conservative, although he noted other projects that seem to be moving steadily along.
“I think people are going to sit back a little bit,” he said.
It remains to be seen if the Superior Plating project is an anomaly or the first leaf to fall from the Downtown development tree, which may be entering its autumn days.
“It will be interesting to watch and see what happens in the next year or so,” Phelps said.