Leaders say this is just the start of Downtown East
City leaders recently took a moment to look back on the rapid development of Downtown East, a neighborhood that has quickly replaced its surface parking lots and underutilized space with dense buildings.
The ascent of the area has come with the name East Town, which also includes Elliot Park. Led by the building of U.S. Bank Stadium, the Downtown East development brought in nearly $570 million in private investment thanks in part to $91 million in public investment, the city estimates.
Council Member Jacob Frey, who represents the neighborhood on the City Council, said the public-private partnership’s replacement of an “ocean of surface parking lots” with new structures like the two 17-story Wells Fargo towers is a “massive benefit.”
“This is a gigantic deal,” he said at a July 27 panel.
Rising over four years, the development has brought in 375 new apartments, 1.28 million square feet of office space, 347 hotel rooms and 56,000 square feet of retail, according to the city. The city estimates the boom will bring in $14.1 million in new property taxes in 2018, including $3.5 million in city property taxes. Wells Fargo brought approximately 5,000 jobs to the area with its office towers.
The development includes several new buildings surrounding the area’s nucleus, The Commons. The two-block park in front of U.S. Bank Stadium, a fulcrum for the area, is bisected with Downtown East on one side and the rest of downtown’s center, officially known as Downtown West, on the other.
The City of Minneapolis issued about $62 million in 30-year bonds to buy the land, design the Commons and build much of the park. The funds, which will be paid back with revenues from two parking ramps near U.S. Bank Stadium, also supported the construction of a nearby public parking ramp. While the Minneapolis Park and Recreation Board technically owns the land beneath the Commons, the City of Minneapolis has a long-term lease to oversee the park.
Popping up around the park have been the 195-unit Edition Apartments, the 164-room Radisson Red Hotel and a 174,000-square-foot office building dubbed the Millwright Building. Sherman Associates is currently constructing a 183-room Canopy by Hilton Hotel in the Thresher Square building and, on the same block, a Trader Joe’s grocery story and the 180-unit East End apartment building.
Mayor Betsy Hodges said the story of Downtown East is a “story of having a vision, seizing an opportunity, building partnerships, working very hard and creating transformation.”
“This is a brand-new neighborhood created out of almost nothing with the best transit, bike and pedestrian connection of any neighborhood in Minneapolis and a world-class green public amenity unlike few others in the country that everyone in Minneapolis and everyone who comes to Minneapolis can enjoy,” she said.
One of the main arbiters of development is Ryan Cos., which moved its headquarters to the Millwright Building earlier this year. Mike Ryan, market leader of Ryan’s North Region, said the project, a “major leap in the right direction,” is building connections between downtown Minneapolis to the east side of the city.
“I really look forward to, in 10, 15 years from now when you can seamlessly walk from the University [of Minnesota] to City Hall to Nicollet Mall,” he said.
Of course, there’s a lot more slated for the neighborhood, including a physical connection between Downtown East and Cedar-Riverside via Fifth Street called Samatar Crossing.
George Sherman of Sherman Associates, the developer behind the Thresher Square and East End projects, predicted that the more than $500 million in investment will only be a quarter of the investment the neighborhood will see in the next decade. Sherman recently opened the Encore, an approximately 125-unit luxury apartment building in the Mill District, and is planning mixed-income housing at 205 Park Ave. S.
Dan Collison, executive director of the East Town Business Partnership, said a groundbreaking is expected in March on workforce housing on the same block as First Covenant Church where he works as the lead pastor. The project, dubbed East Town Apartments, would be built by Ryan and would feature 169 units of housing for people making 50 percent and 60 percent of the area median income.
Interest in development has spilled into the far corners of the neighborhood. Shamrock Cos. is currently building a roughly 374-unit condo building called Legacy at 2nd & 13th following the opening of Portland Tower, a 17-story condo building in Elliot Park.
Further surface parking lots are being replaced by a full-block hotel, housing and brewery development from Kraus-Anderson in Elliot Park and Ironclad, a hotel and apartment project from Graves Hospitality now going up at Chicago & Washington.
“This side of town, I think, is really ripe for every available space to become something,” Collison said.
Ryan is still planning its final piece of the Downtown East project, a large office tower known as Block One. The building, the developer’s seventh project in the area, is expected to rise 17 stories and will be above the Minnesota Sports Facilities Authority parking ramp at 4th & Park.
Frey said the project is “primed for something extraordinary.”
“The investment is not going to stop here. There’s a whole lot of potential still in the pipeline,” he said.