Development proposals for the space above a parking ramp in the $400 million Downtown East mixed-use project have changed significantly, according to documents submitted to the city of Minneapolis on Thursday.
Minneapolis-based Ryan Cos. has altered its original plans to build a $104 million 28-story 282-unit apartment tower above the 1,610-space ramp. Now, Ryan is proposing a 150-room hotel branded as a Radisson Red, built under a 200-unit apartment tower within a single 27-story structure, as well as ground-level restaurant and retail space. The project is expected to cost $101 million. Construction would begin May 2015, with substantial completion slated for August 2017.
Ryan is developing the “Downtown East” project, which includes two office towers housing 5,000 employees for Wells Fargo & Co., 200 apartments, retail shops and restaurants, and a nearly two-block public park. The development will encompass five city blocks near the current Metrodome in an area of the city that has long resisted meaningful development. The new $1 billion Vikings stadium is currently being built on the Dome site.
Golden Valley-based Mortenson has a competing proposal for the space that involves a 300-room hotel dual-branded as an AC by Marriott and SpringHill Suites by Marriott. The project is valued at $63 million. Construction would start in January 2016, with substantial completion slated for January 2017.
]City Council action on the designation of a developer will take place at the March 28 meeting and a report and recommendation will be will be considered by the Community Development & Regulatory Services Committee on March 18.
The latest report on declines in existing home salesduring January is just one of several indicators suggesting that the house market is slowing, raising concerns about the health of the market. Here's one perspective on that topic from a well-known national source, Jonathan Smoke, who is chief economist at Metrostudy:
"Economists were expecting a 4 percent decline in existing home sales released this morning by the National Association of Realtors (NAR), but the decline was worse at 5.1 percent. Some are saying that weather likely was responsible for at least 1 percent of the decline. Regardless of whether or not you buy into the weather causing some of the decline, the existing home market is looking healthier and healthier. Put another way—I’m not worried about the year ahead based on this data. We have more of a cushion going into the spring selling season than the US Women’s Hockey Team had in the final minutes of the third period yesterday. NAR has data on single family existing sales back for more than 45 years, and that long-term average is a monthly annualized rate of 3.52 million; January’s rate is 15 percent over that level. The abnormal level of investor activity is roughly 10 percent of the volume, so take away that and we still would be at least 5 percent above average in volume. A key underlying trend is that the existing home market continues to move towards a healthier mix as non-distressed, regular resales gain market share. Resales gained 10 percent in share over the course of 2013, rising from 66 percent of total existing home transactions to 72 percent at the end of the year as both foreclosures and subsequent REO sales declined. 2014 is seeing that trend continue as non-distressed regular resales now make up 74 percent of all existing home sales. Even if volumes decline with investors retreating, prices will get support from fewer and fewer heavily discounted distressed sales. When I couple that mix trend with demand shifting towards more established buyers and therefore higher price points, I wouldn’t bet on prices declining. And what did the January report tell us? Median existing home prices were up almost 11 percent over January 2013. When the decline in volume is mainly in the type of transactions you don’t want (distress), the decline is a good thing. Also, please resist the temptation to make the lazy observation that rising mortgage rates have hurt the housing market. I continue to believe that the rise in mortgage rates we have experienced is not having an outsized negative impact. Higher rates and continued tight credit, now potentially worse due to QM implementation, is no doubt limiting demand by shifting more of the market towards higher income and older buyers away from first time and entry level. But, remember this shift is going on while sales remain well above historical standards. The 30 year rate is up a full percentage point over last year, but the bulk of the increase came last spring and summer in fear of the taper. Since the taper actually began, the 30 year rate essentially hasn’t moved. What has moved? A higher share of home purchases made in cash and a higher share of mortgages with an adjustable rate. This shift to more adjustable mortgages combined with a profile of increasingly more credit-worthy, established buyers supports the finding that actual average mortgage rates on home purchases are up only 10 basis points over last year. So much for the headline 30 year rate rise wreaking havoc.
Today the Mortgage Bankers Association’s (MBA) National Delinquency Survey showed that the percentage of loans in foreclosure nationwide has fallen for the seventh consecutive quarter to just 2.86 percent - the lowest level in six years.
Last week I reported that in Minnesota the foreclosure rate had fallen to the lowest level since 2005, accoridng to the Minnesota Homeownership Center. That's great news, but there are still parts of the state are still suffering mightily - especially some of the counties along the northern fringe of the 13-county metro. Here's a list of the top 5 counties - those with the highest percentage of foreclosures - over the past three years:
Sherburne Mille Lacs
Brad Fisher will succeed Greg Mason as president of Edina Realty Title. Mason was recently named president and CEO of Edina Realty Home Services. Fisher has been been the long-time manager of the Edina Realty Plymouth office and has been in the business two decades, including stints in sales, management and training. He signed up with Edina Realty in 1995 as an agent with the Wayzata office, and became manager of the Buffalo, Monticello and Delano offices in 1996.
“I’m very excited for the opportunity to lead Edina Realty Title as we continue to grow our market share,” said Fisher “Our customers can really benefit from the wealth of top-notch products and services offered by the Edina Realty family of companies.”
Fisher served a two-year term as president of the Minneapolis Area Association of Realtors and has been a member of the Professional Standards Committee of the Minnesota Association of Realtors since 2010. Fisher graduated from the University of Minnesota with a bachelor’s degree in economics, and was born in Minneapolis and grew up in several Twin Cities area suburbs. He's lived in Independence for 22 years with his wife and son, where he serves on the Independence city council and as a member of the planning commission.
Mortenson Development said construction began on Wednesday of a new 211-room Hampton Inn & Suites over by the First Avenue nightclub in Minneapolis. It's now a surface parking lot.
The nine-story, $37 million project is slated for completion in the first quarter of 2015. Located at First Avenue and Eighth Street, the new hotel will be near Target Field, Target Center, the city's entertainment district and will be connected to the skyway system.
Construction of the new hotel property is being managed by Mortenson Construction, and designed by ESG Architects in Minneapolis. It will be the first Hampton Inn & Suites in the city of Minneapolis.
“The vibrancy of the downtown Minneapolis market is evident everywhere you look," said Tom Lander, vice president of Mortenson Development. "This property will be ideally located near major attractions and will provide tremendous accessibility to the downtown core, at an affordable price point, for the city’s guests.”
Here's what you need to know about a handful of interesting mixed-use projects at various stages of development in Minneapolis: