It's going to be an interesting night at the Minneapolis City Planning Commission's Committee of the Whole meeting Thursday. Developers will be releasing a bevy of interesting new details on three high-profile housing developments planned for in and around downtown.
House prices in the Twin Cities and across the country are rising, though not as quickly as last year, according to the latest S&P/Case-Shiller House Price Indices, which show prices in the Twin Cities rising 1.3 percent from April and 8.4 percent compared with last year. A 20-city composite including the largest metros in the nation was up 1.1 percent from May and 9.3 percent from last year.
While the month-to-month increase in the Twin Cities was one of the biggest gains since last year, the more moderate annual gain nationwide was below expectations.
“Housing has been turning in mixed economic numbers in the last few months," said David Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. "Prices and sales of existing homes have shown improvement while construction and sales of new homes continue to lag. At the same time, the broader economy and especially employment are showing larger improvements and substantial gains.”
Here are a few highlights from the report:
After six years in the making, Twin Cities-based Artspace received word that its first off-shore project is one step closer to reality.The nonprofit real estate developer, in partnership with Honolulu-based PA’I and Honolulu-based HKI, plans to build the Ola Ka ‘Ilima Artspace Lofts, a mixed-use arts development that includes 84 units of affordable housing live/work housing for artists and their families, space for other non-profits and gathering space for community events.
The Hawaii Housing Finance and Development Corporation (HHFDC) approved the Artspace request for low-income housing tax credits to help finance the $38 million project, which will be located in the Kaka’ako neighborhood of Honolulu.
"The HCDA has been following this project for over a year now, and we're excited that it's one step closer to providing much needed housing for lower income groups," said Hawaii Community Development Authority Executive Director, Anthony Ching.
The tax credit brings $17 million in upfront equity to the project’s capital budget, enabling Artspace to focus on the final phase of fundraising. Construction is expected to start in 2015.
There was nothing terribly new to come out of the Minneapolis Regional Chamber of Commerce breakfast Friday morning on the day's topic: the Nicollet Mall overhaul. Or, as it's called now, the Nicollet Mile.
But it's interesting to watch the continuum of the ambitious $50 million project. Now that the city has won $21.5 million in state bonding dollars, downtown building owners are expected to kick in an additional $25 million through some sort of assessment, and the remaining $3.5 million will be part of Minneapolis Mayor Betsy Hodges' 2015 budget.
The project is now in the 12-month design phase. Landscape architect James Corner's firm has crafted an overally blueprint, but things will really get down to the nitty gritty in the coming year, according to Julie Snow, a Minneapolis architect whose firm is working on the project, as well.
Construction will begin in the fall of 2015, with completion slated for the end of 2016.
"We are at the beginning of the design phase which involves making this thing road-worthy and street ready," Snow told the breakfast crowd.
The overall concept of the project involves connecting the cultural and natural beauty of the Walker Art Museum area and Loring Park to the Mississippi River and the Guthrie Theater.
Nicollet Mall is divided into two "woods" areas at the north and south ends of the Mall, then two "groves" on that meet at the center, where an outdoor staircase linking the skyway connecting IDS Center to Macy's will serve as a connection. There's more information here.
As always, the audience asked a few probing questions. . . .
How will all the trees survive the harsh downtown environment? Peter Brown, the city's project manager, said the trees will be grouped in such a way that prevents a total overhaul of the Mall's extensive infrastructure. And they will be planted in areas with sufficient soil.
What buildings will be subject to the assessment, and how will it work? Not clear at this time. The Downtown Council's President and CEO Steve Cramer said those discussions are occuring now, engaging property owners and the Building Owners and Managers Association (BOMA)
Why can't buses go away on the Mall? Snow said discussions are ongoing to minimize bus traffic on the Mall, especially if streetcars come into play. Transit shelters will serve both bus and streetcar users.
What about all the panhandlers, loiterers and overall homelessness on the Mall? Cramer said a goal of the Downtown Council's 2025 plan is to eliminate homelessness in downtown Minneapolis. To that end, the Downtown Council is looking for "constructive alternatives" for the city's homeless population, but that takes time.
And now, a bit of trivia. What famous person cut the ribbon to inaugerate the original Nicollet Mall?
Answer: Lady Bird Johnson.
California-based KBS Realty Advisors has purchased Northland Center in Bloomington for $51 million.
The 465,168-square-foot office complex is 89-percent leased at closing, and United Properties was the seller.
Located at 3500 and 3600 American Boulevard W. along the Interstate 494 corridor I-494, the complex was renovated in 2010. The two buildings span seven stories and cover about 13 acres.
“Northland Center is a well-located, highly amenitized, multi-tenant office complex within one of Minneapolis’ largest and most active submarkets,” said KBS Central Regional President Ken Robertson, in a statement. “This property benefits from its location along the border of affluent Edina, as well as within the I-494 corridor, which is the second-largest submarket in the Twin Cities.”
LEED-Silver certified, amenities in the complex include full-service cafeteria, fitness facility with locker rooms and showers, state-of-the-art conference rooms, sundry shop, hair salon, dry cleaning service and car wash/detailing service.
Tom O'Brien and Scott Pollock of Cushman Wakefield NorthMarq, Minneapolis, represented United Properties in the sale.
Northland Center joins two other KBS-affiliated company-owned properties in the region: The 678,045-square-foot RBC Plaza in downtown Minneapolis; and the 228-unit Watertower Apartments in Eden Prairie.
After a record downward revision in May, new home sales across the country last month posted a surprisingly large 8.1 percent decline last month, causing considerable angst about the health of the recovery. Here's a roundup of perspectives about the latest reports.
Wells Fargo Securities: Home sales were expected to fall in June, but that was after an unusually-large gain was originally posted in May. More than half of May’s gain was revised away and the decline in June erased the remainder, pushing the headline number to a low for the second quarter. Judging from the mortgage applications data, home demand remains weak; however, builder sentiment and existing home sales are improving again.
Brad Hunter, Chief Economist at Metrostudy: "We are back to a situation where home shoppers are shopping but a relatively small proportion of them are actually buying. This is explained in some cases by a long lead time (people taking longer to make a decision), and in other cases by a complete reluctance to buy.....after months of strong sales, more than offsetting the declines in February and March, new home sales activity has slowed dramatically in June. Temporary activity thanks to improved weather and pent-up demand appears to have been quickly satisfied. Going forward, new demand will be dependent on the consumers' ability to afford a new home. However, with house price appreciation outpacing income growth, many potential home-buyers are already being priced out of the market
Quicken Loans Vice President Bill Banfield: “The volatility in the new home sales data is leaving more questions than answers especially when considered with the recent increase in existing home sales. With interest rates generally improving this year, the volatility in recent sales may be driven more by availability of inventory and employment.”
JEF Economics: Before getting into the detail, it is important to view this data in context. New home sales, over time, tend to be volatile. Single-family new home sales make up a small percentage of overall home sales. So, a small sample is scaled up through seasonal adjustment and then multiplied by 12 to generate an annualized rate. Very small fluctuations in the monthly raw data can generate very large swings in the headline data. This was the case with the May revision. It was originally reported that there were 49,000 homes sold in May on a non-seasonally adjusted basis. This was revised down to 42,000 in today’s release. So a 7K decline in the absolute number of homes sold resulted in a 62K decline in the seasonally adjusted annualized selling rate. So, this month’s data and the revision to last month are discouraging. We had been expecting that the housing sector would regain the momentum lost over the winter and that both new and existing home sales and the pace of home construction would accelerate through the spring and summer. Existing home sales are recovering nicely, but housing starts and new home sales remain week.