A tower of economic strength

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July 2, 2002 // UPDATED 1:25 pm - April 30, 2007
By: Kevin Featherly
Kevin Featherly

Grant Park may expand the boundaries of upscale Downtown and boost the Elliot Park neighborhood.

It will be an impressive sight for commuters heading north into Downtown off I-35W. On their right, just as they hit South 10th Street, they will spy a towering 27-story red brick condominium complex, spreading huge shadows over places where shadows once were only cast by roadside shrubbery.

The 330-unit Grant Park housing development marks a turning point for a forgotten corner of Downtown, the Elliot Park neighborhood. It's an area that in recent decades has been known to outsiders for crime, poverty and rehab centers. But with the arrival of $140,000 to $445,000 condos, Elliot Park could well become Downtown's new development hot spot.

"It's kind of a springboard," said Tom Dillon, senior project manager at APEX Asset Management Corp, a co-developer on the project with Opus Northwest LLC. "It's hopefully an impetus that starts other development, whether it be commercial, retail, housing, whatever, in or around the neighborhood."

After three years of persistent efforts by neighborhood residents, city officials and developers, the $107-million complex has reached early construction stages. Excavation for its parking garage began June 27.

When completed in mid-2004, Grant Park will add 500 new homeowners to the neighborhood's population of 6,450, who are now mostly low-income renters.

Even unbuilt, Grant Park is hot property. Ninety days after going on the market, buyers had reserved 142 of its 330 planned units, developers said.

"It's going to create an interesting Downtown population, a real mix," said David Fields, community development director of Elliot Park Neighborhood Inc. (EPNI). "That is exactly what that area of town needs."

What sort of mix? A slew of city Planning Department workers are said to be buying in. The area's councilmember, Lisa Goodman (7th Ward), says she is purchasing a unit, though she hasn't decided if she will live there full-time. Former House Speaker Dee Long is seriously thinking about moving in and abandoning the well-heeled East Isles neighborhood.

Long cited being within walking distance of Symphony Hall and Downtown's other attractions. "I think it's a real welcome addition to that part of town," she said. "It's a very exciting development."

George Green, a 16-year neighborhood resident, said, "If they put that over here, it'll be good for the community," he said. "And maybe some of the people here can get jobs."

Neighborhood condominium owner Rick Miller also is picking up good vibrations from the project's buzz.

"The condo I own is only going to increase in value, which is great for everybody," he said. "Other than that, it'll get rid of some of the crime around here. The only thing I don't like about it is, around that (tower), I won't get any sun."

Some, however, worry that the gilt-edged project's benefits won't trickle down. Grant Park is receiving $7.3 million in public subsidy, with no affordable housing units pledged as part of the deal.

Margo Mitchell, a 20-year Elliot Park resident, said, "Get the people off the street, and help the people living in substandard housing with rats and roaches and crack dealers. Address the immediate concern."

Revivalist architecture

Grant Park, according to its proponents, will be the pivot point of the neighborhood's "urban revival."

Plenty of people think that the high-rise, along with its accompanying row houses and "city homes," will draw frustrated commuters from the moneyed suburbs and Minneapolis' tonier sections, along with the young and affluent hoping to get closer to Downtown's night life.

Once the building fills up, various sources say, the taste will be for further development.

Millie Schafer, an EPNI board member and a long-time neighborhood resident, says the project will fulfill her dream of a heartier neighborhood economy.

"We can bring the amenities of coffee shops and restaurants and a grocery store," she said. "A lot of studies have said this neighborhood can't support a grocery store. Well, as more things like this come, you can."

Brent Wittenberg, vice president at real estate consultants GVA Marquette Advisers, agrees with Schafer, mostly. He doubts Grant Park alone will support a grocery store, but he does think it could revitalize the area on a scale similar to what happened after The Landings condos went up on the North Loop riverfront.

"This project is generating a lot of interest," Wittenberg said.

Goodman said Grant Park's value is not just in attracting the wealthy from the suburbs. It also offers an opportunity for neighborhood renters finally to put down permanent stakes.

"I have talked to dozens in that neighborhood who desperately want to stay," Goodman said. "But there's nothing to buy. There are no options for home ownership in this neighborhood."

Goodman credited

Apex's Dillon, EPNI's Fields, and others pin the credit for Grant Park on Goodman's lapels.

"She encouraged us to look at the site three years ago," Dillon said. "She encouraged us to keep working on it, she introduced us to the Elliot Park neighborhood folks. She really is probably the reason this project is happening."

Goodman says she first became interested in developing the property at 10th Street and Portland Avenue after Jack Vilett, owner of a pair of industrial buildings on the site, put them up for sale.

Goodman says she had to argue a case for new housing after hearing from residents that Elliot Park needed new high-density residential development. She says the owner wasn't interested in selling the property on that basis for fear that no developer would be interested.

"I just basically held firm and said the neighborhood's position on this is that there is going to be housing on this block," Goodman said.

Over the next three years, Goodman found herself standing on the site 25 times, pitching the housing plan to financing organizations such as Prudential and the Federal Home Loan Bank board, and just about anyone "who had a vision for development on this block."

There were competing proposals to put up a parking structure or to renovate the old existing structures and create a headquarters for a nonprofit group, but Goodman says she soldiered on, insisting on high-density housing.

Then, in 1999, neighborhood representatives began talking with Apex's Tom Dillon and with Minneapolis city development officials. As an enticement, EPNI pledged its $300,000 in Neighborhood Revitalization Program funds to the project.

That not only brought Apex onboard, it attracted the attention of Opus, which kicked in a $750,000 equity share, taking part-ownership in the development and contracting to build on the condos.

Finally, the City Council authorized tax-increment financing to fund the project. Tax-increment obligates a development's higher taxes (the increment) to pay city debt for infrastructure improvements.

"This is a great example of how a neighborhood, the private sector, a council member and the MCDA can come together to make something awesome happen," Goodman said.

The subsidy

The complex is receiving $7.3 million in public subsidies through tax increment financing - about 8 percent of the project's overall costs.

However, the city's cost for issuing tax increment bonds will rise considerably higher than $7.3 million, according to Cynthia Lee, MCDA multifamily housing development manager. Including up-front and long-term interest and city administrative fees, tax increment financing could push the city's total cost to nearly $14 million, Lee said.

Developers will be required to use the tax increment money for site costs such as demolition and parking construction, Lee said.

No low-income affordable housing units will be included in the tower. Lee said the project was applied for before the city mandated affordable housing as a condition of public housing subsidies.

Lingering doubts

Some worry that gentrification will scatter the poor who now live there. Margo Mitchell, said she is "appalled" that the project is moving ahead.

Mitchell worries that when the tower's wealthier residents move in, more development will be spurred. Mitchell said calling a $170,000 condo "affordable housing" is just a cynical joke.

Goodman countered by saying a condo priced at $140,000 indeed is "affordable" by the standards of most people looking to buy a home. "You can't buy in practically any neighborhood in the city for that," she said.

Apex developer Dillon thinks residents such as Mitchell have a valid point. But it may be that what Mitchell fears is simply the cost of moving a community forward, he suggested.

"It is going to change in the neighborhood," Dillon said. "Anytime you bring 500 people into a neighborhood of 6,400 people, things are going to be different.

"I'm not saying that's going to be bad change or good change. But it's going to be change."