Sold Down The River

Minneapolis's brave new riverfront will have parks, museums, and upscale condos. Who said subsidized housing was just for the poor?

In addition, the city plans to apply for $4 million from the Fannie Mae Housing Impact Fund--another program targeted at low-income housing. In its annual report, Fannie Mae touts the program as part of its "Trillion Dollar Commitment" to affordable housing. The Housing Impact Fund supposedly "invests in unique financing opportunities for affordable housing." But as it turns out, the opposite is true. "In urban areas," explains Fannie Mae's Gloria Bostrom, "we waive the income limits, because we recognize the need for cities to attract middle-income home owners to the urban core."

Minneapolis isn't the only city to consider "affordable housing" a concept malleable enough to include $700,000 condominiums. Tampa used Section 108 money to build an upscale shopping mall. Seattle was recently sued over a HUD application that exaggerated crime statistics and blight. According to American City & County, cities in New York and New Jersey are building hotels financed by Section 108. Detroit used the fund to build a sports arena. Boston is tapping it to build a World Trade Center.

For the moment, "mixed-income housing" remains a favorite phrase at press conferences touting the riverfront plan. But ask for specifics about what that will mean, and officials clam up. "It's not clear what their objective is," acknowledges the university's Morrish. "They have a general goal--'there should be a mix'--but no one has tried to create targets, which is what a lot of cities will do." Vancouver, for example, decreed that its riverfront would have one-third upscale, one-third midrange, and one-third low-cost housing.

Brian Barber

In Minneapolis, there is no detectable movement in that direction. "It would be hard to make any goals," explains MCDA senior project coordinator Ann Calvert, "because price is dependent on the overall market and on the banks and financing. It's different for each project."

Even if the city did make commitments, they might not be worth the planning documents they're written on--witness the recent about-face on the Hollman project. In 1992 residents of several North Side housing projects successfully sued HUD and the city claiming that the projects were a ghetto. The lawsuit was settled for a promise to tear down the projects, relocate the tenants, and build a new, "mixed-income" neighborhood full of "community amenities" like parks and creeks.

Three years later, only 20 of the hundreds of affordable-housing units promised under Hollman have materialized. And at a meeting just before the holidays, the City Council quietly voted to drop most of the affordable housing from the plan for the new neighborhood.

A NUMBER OF factors make up the official explanation for the future riverfront's upscale tenor. Developers naturally go for the highest profit; the city, too, is anxious to recoup its investment, make up for the losses from past failures, and pay for future improvements. And there's the old trickle-down argument--that projects like this improve the tax base and create jobs.

For now, Minneapolis taxpayers shouldn't hold their breath for any windfall. The Brighton deal is structured as a "pay-as-you-go" tax-increment-financing project, not unlike the bankrupt office buildings across the street. Taxes paid by owners of the new condos will go not for maintaining city services, or for the schools, but to repay the multimillion-dollar public investment in the project. ("Spinoff development" may spring up around the area, but no one knows how much or when.) As for job creation, the MCDA estimates that riverfront development so far has spawned 489 new jobs, which translates to a total public cost of $732,106 each.

Thus far, the arguments are familiar, having been trotted out in just about every development debate since at least the early 1980s. With the riverfront, however, there's one new twist: These projects, it is argued, will preserve an invaluable historical resource. And in a city that has cheerfully bulldozed thousands of structures, many with national significance, that should be worth something.

In fact, it's worth good money. "We'd like to feel that good history could mean good recreation and good business," explains Betsy Doermann, St. Anthony Falls district site manager for the Minnesota Historical Society.

Considering how the public sector has tended the riverfront, it's no wonder preservationists welcome private investors with open arms. So far, the city has buried most of the west side milling district under gravel fill, and the Washburn Crosby complex would surely have joined the slag heap if it didn't have protected status. (It is one of only a handful of sites in the state--Fort Snelling is another--to be designated a National Historic Landmark.) Under the "stewardship" of the MCDA, the A Mill, once the largest flour mill in the world, was gutted by fire in 1991 along with the only complete set of preserved milling equipment in the country. The Humboldt Mill was badly damaged by fire in February of '97.

It's been only a few years since government agencies started taking steps toward actively preserving what was left of the district. In 1989, the Minnesota Legislature created the St. Anthony Falls Heritage Board, through which a variety of city and state agencies are supposed to guide development and create interpretive sites and trails.

The board's plans are ambitious. Almost $3 million in (mostly state) money were spent on reopening the Stone Arch Bridge and laying out a self-guided "heritage trail" around the falls. The Minneapolis Park Board is working on creating a Mill Ruins Park, carved out of the now-buried remnants of the old flour mills on First Street. The Historical Society will establish an interpretive center to replace its shop-front museum on the east side of the river. The new center will probably go inside the ruins of the Washburn Crosby A Mill. Add the old warehouses and mills restored by Brighton and others, preservationists say, and you'll have a historic district like few others.

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