Uptown Girl

Third Stone owner Tari Sullivan questions McDonalds plan
Teddy Maki

There are telltale signs of rapid development where Lake Street meets Lyndale Avenue in south Minneapolis. New bars and restaurants have popped up in once abandoned buildings, façades have received face-lifts, theaters and gift shops have leapfrogged from corner to corner. If some feel that what once made Lyn-Lake a distinctive neighborhood is being lost, a possible harbinger hangs in the front window of the Falafel King restaurant: A photograph from Wing Young Huie's "Lake Street U.S.A." series captures a crowd on a sunny afternoon in front of Calhoun Square, Lyn-Lake's wealthier, sexier sister to the west.

Next month the Minneapolis City Council will decide whether Lyn-Lake will live in the evening shadows of Uptown or cast some of its own. In the spring of 1999, the city purchased aging houses and a retail building that stood on Aldrich Avenue and Lake Street, relocating Fantasy Gifts and Tai Peng restaurant in favor of a pay-box parking lot. Meanwhile Lyn-Lake improved from what was once considered a seedy corner into a destination area for shoppers and diners. This past August, hoping to capitalize on the good times, three city council committees granted approval to pursue plans for a multilevel, upscale housing development in place of the parking lot.

The development, a year in the making, was the brainchild of council member Lisa McDonald (who represents Lyn-Lake's Tenth Ward) and Village Green, a Michigan-based developer that has renovated apartments in the Minneapolis suburbs. The developer is footing the bill to the tune of more than $600,000 and plans to include room for 60 units, ranging from $1,000 to $3,000 a month, with resort-quality amenities--such as a concierge service and a fitness center. McDonald and Village Green planners also hope to expand to two other sites in the neighborhood, eventually building 150 additional units. Neither the council member nor the developers will disclose where these units are to be located, though, until the deals have been sealed.

Tari Sullivan owns Third Stone, a hemp and head shop that has been in business in the area for six years. She says the housing proposal is "ridiculous": "It won't fit here. People who live here can't afford that kind of rent, and it's been nice that people have been able to live here. It's full of the younger crowd, people who are just starting out on their own. The businesses here are geared to that."

Sullivan's business was relocated in 1995 when the city bought Third Stone's original building on Garfield Avenue and Lake Street to build a parking lot. Since the city opened the Aldrich parking lot (now the Village Green site) across the street from the hemp shop's current location, Sullivan says property taxes have increased, causing her landlord to raise the rent $500 a year. Now she fears that an upscale apartment complex will make it impossible for merchants to stay in the area. "I'd really rather see something that's more affordable," she says. "We already pay so much just for the parking."

"What I know about the project is that it will demand a certain kind of business," offers Tom Borrup, executive director for Intermedia Arts, which has a space two blocks north of Third Stone. "What's at work here is part of a larger phenomenon--the upscaling of the neighborhood." Borrup also notes that the Aldrich parking lot came at the expense of some dilapidated, low-income housing behind the boxy retail building. "The parking lot is rarely full," he claims. "Parking was a priority, low-income housing was not."

Adds Borrup: "What's really at stake here is a working neighborhood, with a very rich community in terms of income and racial mix. The housing proposal seems to say that the city is fine with the removal of diversity."

Others affiliated with Lyn-Lake see McDonald's pet project as the last step toward creating a more vibrant neighborhood, where high-end housing and street-level retail can coexist comfortably. "It would be stretching the envelope for our rental rates," says John Meldahl of the Lyn-Lake Business Association. "Our price-point would be the same as the Calhoun Beach Club. We are upscaling, and from that standpoint I am tickled to death." Meldahl, who owns the building that houses Bryant-Lake Bowl, notes that many developers are flocking to Lyn-Lake, and that in one neighborhood meeting over the summer there appeared to be no opposition to McDonald's proposal.

When the project was initially discussed in committee meetings downtown, however, council members Joan Campbell and Joe Biernat and council president Jackie Cherryhomes voiced concern that the plans seemed to be short on affordable housing. The affordable housing policy adopted by the Minneapolis City Council more than a year ago requires that any rental housing projects of more than ten units built with financial help from the city or Minneapolis Community Development Agency have at least 20 percent of their units set aside for affordable housing. (To qualify for affordable housing, a family of four must be making less than 50 percent of the metro median income, which is $68,600. Rent should then cost no more than one-third of their income.) Because Village Green is asking for no city money to complete the development, just permission, the project does not have to meet this requirement. "It seemed to me like a perfect project to have a 20-percent set-aside" offers Campbell, who represents the city's 2nd Ward. "But because the city did not participate financially, we could not impose that."

McDonald says the developer has assured her that affordable housing is a priority. Of the 150 units to be built after expanding to two other sites in the neighborhood, Village Green has promised to make 70 affordable. She concedes, however, that these plans are contingent on the developer getting $21 million worth of tax-exempt revenue bonds from the state, some of which come from the city's allotment. "They need the money to get to 70 units, and they may not be able to reach that goal," McDonald explains. "But they have assured us that they are going to try."

McDonald also notes that Village Green has agreed to replace lost parking spaces once building begins on the Aldrich lot. While McDonald admits many terms of the project are still conditional (for instance, an independent real estate appraisal is forthcoming), she maintains that housing was always in the plans for the intersection. "We've always intended to get a building on that block," she says. "They are also going to do retail, with smaller, street-level retail spaces. Everyone needs a reasonable venue to be a starter, and we want to get plenty in there."

Some housing advocates, however, are suspicious of both Village Green and McDonald. They believe the council member is just paying lip service to affordable-housing needs. "It seems [some council members] went out of their way to get an out-of-town developer to skirt the 20 percent issue," says Joan Gleason of the Metropolitan Interfaith Council on Affordable Housing. "I really question the role the city played in all this."

McDonald knows some think it's foolish to propose high-end housing in the neighborhood, but she maintains that this proposal will give the area the right mix of retail, housing, and income levels. She also notes that while she was outspoken about development on Block E being farmed out to too many out-of-town businesses (tenants in some Block E proposals were looking for $66 million from the city), Village Green is different because they aren't asking for city money. "Look, people are skeptical of me because of what we did with the parking, and I understand that. But we would have never seen the growth here without the parking lot," she says. "There will always be people who like it the old way, but I have to keep up with the times. We have a good economy, and I want to show how urban development can work in Lyn-Lake."

Though it is uncertain whether the Village Green proposal will happen--McDonald says it is "by no means a done deal"--many in Lyn-Lake concede that change is inevitable. "Look at what they've done to Uptown," Sullivan observes. "Small businesses don't thrive there--it's all the Gap and stuff. Pretty soon, the only places that can afford to be in the neighborhood are the corporate entities. Change is fine, but I've always liked this neighborhood like it is."

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