Erector Set

The Hollman redevelopment project is finally under way on Minneapolis's near north side. Now it's time to follow the money.

They're a contractor's dream, all those bulldozers pushing dirt around on the blocks and blocks of bare earth stretching northward from the corner where Highway 55 heads west out of downtown Minneapolis. Over the next six years, these 73 acres are destined to become a vibrant new neighborhood, complete with arts-and crafts-style homes, walking paths, lakes, shops, a million-dollar view of the city's skyline, and an inviting boulevard that flows into south Minneapolis's sought-after lakes district.

The 900 homes that will be constructed here, and the upscale amenities designers hope will make them attractive to urban professionals and young families, are the result of the settlement of a controversial lawsuit, Hollman v. Cisneros. In 1992 public-housing residents, aided by Legal Aid and the Minneapolis NAACP, sued the City of Minneapolis and federal housing authorities, claiming that local and national officials had segregated poor minorities into the dilapidated projects on the city's north side. As a result of a settlement three years later, 770 units of crumbling public housing were demolished, and $117 million was earmarked for Minneapolis to build replacement housing throughout the metro area.

Though the settlement was initially seen as a victory for the plaintiffs, it has left plenty of controversy in its wake. Critics have blasted the city for everything from its failure to find homes for the people who used to live in the projects--including the lawsuit's namesake, Lucy Hollman--to the north-side redevelopment's escalating price tag. (The cost of construction, originally estimated at $135 million, has since been upped to $200 million--more than half of it to be paid from public funds, including nearly $60 million from the City of Minneapolis.)

But as construction commences, the most prominent element of the project has managed to escape public scrutiny: the enormous taxpayer subsidy. That's largely because Minneapolis officials, led by city council president Jackie Cherryhomes, opted to turn over the prime parcel of real estate--along with control over what gets built there and who builds it--to a private developer, St. Louis-based McCormack Baron & Associates. Moreover, the city appears to have structured the deal in a way that obscures the process from public view.

A look at the few documents that have been made public, along with interviews with Twin Cities-area contractors, suggests that the lion's share of the work--and the money--is going to a small, well-connected group.


Dozens of public-housing projects were torn down nationwide during the 1990s. Though they were touted not too long ago as the most progressive way to house poor families, virtually all of the nondescript cement high-rises and row houses owned by public-housing agencies had slowly deteriorated into crime- and roach-infested slums. Officials in most cities have rushed to replace the projects with the new state-of-the-art: so-called mixed-income developments. Part of a public-policy strategy spearheaded by the U.S. Department of Housing and Urban Development (HUD), the redevelopments are intended to revitalize impoverished areas by "deconcentrating poverty"--i.e., scattering poor residents throughout cities rather than crowding them together. Inside the new communities, the theory goes, the lives of the poor will improve as they live in proximity to those who are more successful. (And, presumably, vice versa.)

Eager to replace the projects on the city's north side with something that would reverse migration to the suburbs, in 1999 Minneapolis officials organized a visit to the most talked-about of these mixed-income developments, Murphy Park in St. Louis, Missouri, built by Richard Baron, whom the St. Louis Post-Dispatch has referred to as the "Tiger Woods of urban redevelopment." Baron's firm, McCormack Baron & Associates, has made a mission out of turning blighted urban landscapes into inner-city oases where the poor and the well-heeled live side by side.

In 1996 McCormack Baron began replacing St. Louis's notorious Vaughn public-housing complex with streets lined by red-brick townhouses. Residents, regardless of income, now enjoy wall-to-wall carpeting, dishwashers, and garbage disposals, as well as amenities more commonly associated with upscale developments, such as community swimming pools, daycare centers, and gated parking areas. Trees shade the streets, many of which are broad boulevards broken up by medians filled with marigolds and petunias. When it is completed in 2003, Murphy Park will include 402 townhouses and apartments, just over half of which are reserved for low-income tenants.

But it's not enough just to build affordable housing, Baron has often told the media; if the new neighborhood is to succeed, the surrounding community must be improved as well. To that end, in addition to constructing housing, Baron pushed the St. Louis school district to revitalize the neighborhood's elementary school. He convinced local business leaders and philanthropic organizations to put millions into the flagging school to buy computers and textbooks and to better train teachers and raise students' test scores.

Baron, who began his career as a Legal Aid attorney working with public-housing tenants in St. Louis, has repeatedly explained his development approach as "the right thing to do" to ensure that all people, regardless of income, enjoy a quality place to live. That philosophy has translated into business success: In recent years McCormack Baron has been tapped to head up dozens of similar projects in Atlanta, Pittsburgh, Kansas City, and San Francisco, among others.

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