Built for Conflict
As he gazes across the steadily coursing Mississippi River toward the downtown Minneapolis skyline, Steve Minn indulges in a rare moment of repose. "It's breathtaking down here," he says to two his companions, Jim Hall and John Wall, who nod in agreement. "This is the perfect place for what we're trying to do."
The three men, the Minneapolis Stone Arch Partners, have a plan for this swath of riverfront land framed by Sixth and Eighth Avenues SE about a hundred yards east of the Stone Arch Bridge, where Main Street turns to dirt. They already own one parcel here, and assuming all goes well, they'll soon have two more. Wall unfurls an artist's rendering that depicts a matched pair of old-timey edifices, five stories high, perched on these very lots. "There is no affordable rental on the river," proclaims Minn. "This river is not just for the wealthy owners, but for everyone to enjoy."
This past December, the Minneapolis City Council endorsed the partners' vision, changed the zoning designation of the site to allow for housing, and approved the $33.5 million Minneapolis Stone Arch Redevelopment Plan. But the project has run into a few snags. The owners of Metal-Matic, a factory that abuts the site, raised concerns about safety issues and sued the city to get the zoning changes repealed. The University of Minnesota, which operates a steam plant nearby, protested as well. And the Marcy-Holmes Neighborhood Association complained that residents were being shut out of the process. Second Ward council member Paul Zerby has heeded the voices of dissent and has managed to stall progress, at least temporarily. (A public hearing was slated for Monday, April 8.)
The 40-year-old Minn, who commenced a new career as a developer after serving for more than six years on the city council, brushes aside the controversy. These are bogus roadblocks, he alleges, that have been erected to conceal a more insidious objection: Folks simply don't want affordable housing in the area.
"Zerby and others have come up with ludicrous ways to stop it, but it all boils down to the stigma," he says. It's no wonder his project has attracted attention, adds Minn: "One, I'm doing twice as much as other developers usually do, and two, I'm talking about a development that is all rental, with no owner-occupied housing."
According to the partners, Stone Arch is the largest affordable-housing development proposed in Minneapolis right now, with 40 percent of 221 planned units pegged at levels ostensibly affordable to people making about half of the metro area's $75,000 median income. According to Stone Arch's numbers, a studio apartment would rent for as low as $576 per month, a two-bedroom for $863. Rents would top out at $1,445.
Zerby says he's simply listening to his constituents. "It's opposed by the university, it's opposed by Metal-Matic, which is a big employer there, and it's opposed by the neighborhood association. There are substantial stakeholders voicing objections," he notes. "We do want affordable housing. But it's just arbitrary and capricious to squeeze it into an industrial area."
Beyond those objections, Zerby fears Minn will have a hard time finding tenants, owing to the amount of heavy industry in the area. "It could turn out to be kind of a tenement down there if it's a bad living environment," he suggests, noting the failure of the old Hollman site on Minneapolis's north side. "I don't want to say in any way that this is like Hollman, but at some point apparently someone thought Hollman was a good idea. We just need to be safe."
The Marcy-Holmes Neighborhood Association's Melissa Bean has her own laundry list of potential flaws: Too much noise from the steam plant and Metal-Matic; insufficient parking; roads that are already taxed by traffic; and a lack of mass-transit and retail amenities. "Our basic opposition is that it's inhospitable for housing at this time," Bean reasons. "People are largely unfamiliar with the site. They look at a map and say, 'That's great, it's right on the river.' But they don't see that there's a big steam plant down there, or noisy industry in the whole area."
Bean doesn't rule out housing on the site somewhere in the future, but says it should be done "incrementally." She also points out that while Minn persuaded city officials to rezone the parcels he intends to develop, the surrounding area will remain industrial for quite some time. "We've fought with the university on the steam plant, and now that's not going anywhere for 50 years," she notes. "Have you ever heard the steam plant venting, which they do once a month? That will knock your socks off. And the industry down there is very much alive. Metal-Matic is 24 hours a day, seven days a week."
Bean adds that the area already has "a preponderance" of rental units, and says the neighborhood association has earmarked $75,000 to hire a private firm to study riverfront development. "We have other places better suited for affordable housing," she says, mentioning a vacant lot across University Avenue from St. Anthony Main. "[Minn] had no interest in them."
Minn counters that what drew him to the location was the proximity to the downtown core, bus lines, and retail--not to mention the new Guthrie Theater site.
Minn and his partners have the money all lined up--a $3.2 million loan from the city, another $23 million from bonds approved by Hennepin County, plus $6.45 million of their own. They're still in negotiations with owner John Drummond over the two final parcels of land. Securing eminent domain on a rail line owned by Minnesota Commercial Railroad and used by Archer Daniels Midland Co.--the topic of the April 8 hearing--might prove a taller hurdle. Minn says ADM has agreed to stop using the line, and that getting the city's permission to condemn is simply precautionary.
That's precisely the sort of behavior that irks Paul Zerby. "It's just a bargaining chip for him, to say the city might condemn," Zerby asserts. "It may have been a commonly accepted way of doing business in the past. But I say negotiate with the landowner now and let the neighborhood be in the planning."
He'd be more than happy to negotiate in good faith, Minn counters, if Zerby would stop trying to scuttle his dream of "industrial-style" lofts on the riverfront. At one point, Minn notes, Zerby, along with fellow city council newcomers Dan Niziolek and Natalie Johnson Lee, attempted (albeit unsuccessfully) to derail a $750,000 check the city received from the State of Minnesota to clean up pollution on the site. "You never send money back to the state," Minn says incredulously. (Zerby says he was concerned because the money was directly tied to the development.)
While acknowledging that he has a financial stake in the outcome, Minn insists he's trying to do something to benefit the city. Besides, he says, the development is a fait accompli. "I've had the approval of the city council, the Met Council, and the Minneapolis Community Development Agency," he says. "It's not a question of whether we want to date, or even get married, or have a baby. The question is: Do we buy pink or blue, because the baby's coming."
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