More U housing in works

In the wave of big new student housing projects going up near the University of Minnesota campus, the Cluster on 4th is short and small.

But developer Steve Minn said the 12-unit townhouse-style complex he's planning west of Dinkytown, a spot that currently houses the Delta Upsilon fraternity, fills an overlooked need for small-scale, midrange student rentals. Not everyone wants to live in a high-rise, he said.

The Cluster on 4th is the latest student apartment project to get the green light from the Minneapolis Planning Commission. It joins a growing list of developments that promise to change the rental landscape around the university -- and are raising concerns that the area could be hitting a saturation point.

•Minneapolis-based Solhem Cos. on Sept. 1 is expected to open Solhaus, a 75-unit green apartment building near TCF Bank Stadium where two bedrooms will rent for $1,800 to $2,000 a month. The building is aimed at graduate students and adults, said developer Curt Gunsbury. In addition to a new boutique apartment building in the Minneapolis Warehouse District, Gunsbury is planning another similar apartment building in the university area but wouldn't elaborate.

•Master Development Services and owner Savant Properties II plan to open in October a new 12-unit apartment building called the Limelight at 811-817 4th St. SE., west of Dinkytown.

• Stadium Village Flats, a high-end 120-unit project with a CVS/pharmacy, is under construction in Stadium Village on Washington Avenue SE. Minnetonka-based Opus Development expects it to be done by August of next year.

• Doran Cos. is planning the Oak Street Flats, a 60-unit apartment building at 309-313 Oak St. SE. in Stadium Village, currently the home of the Oak Street Cinema and the Golden Bowl restaurant. The company, which still is arranging financing, goes before the city planning commission next week for approvals. It's Doran's third apartment project in the area. The company is looking for other sites in Stadium Village.

•Daniel Oberpriller, head of Minneapolis-based CPM Property Management/Development, is planning to build 120 new apartments on the corner of 4th Street and 8th Avenue SE., in the Marcy-Holmes neighborhood, attached to the existing Remington Campus Apartments by a skyway. The target is a mix of students and families, with lower and market-rate rents. Oberpriller said he's still working out the financing and hasn't submitted plans to the city.

Minn, head of Lupe Development Partners in Minneapolis, and another developer said they're worried about overbuilding student apartments in the university area, particularly at the high end. By Minn's count, there are as many as 1,500 apartment units coming online in the area between now and 2015, including the more than 600 apartments being proposed for the Pillsbury A-Mill complex near St. Anthony Falls.

Some of the projects specifically target students. But some, such as the Pillsbury A Mill projects, don't. And some draw a mixed group. It all makes gauging supply and demand difficult.

Mary Bujold, president of Maxfield Research Inc., said she's on the fence about whether developers are overbuilding the market for student apartments near the university. There's been relatively consistent demand so far, she said, but she's concerned about the potential for the latest new buildings to cannibalize renters from previous ones.

Others say the market can handle it.

"Our properties continue to get absorbed very quickly," said Jim LaValle, Doran's vice president of development.

Dave Menke, an executive at Opus Development, said the company is still "very bullish" on the market. It has good preliminary interest from potential renters for Stadium Village Flats, he said.

Overbuilding? He thinks not

Richard Gilyard, an architect and chair of the vision and planning committee of the University District Alliance, which has been studying the housing issue, said he doesn't think student housing is being overbuilt "at all." The new apartments are replacing some "not very good" housing, he said, and there's a market because students now want the private bedrooms and parking the new buildings offer.

"The new projects are being designed in a way that's quite different than what we saw a decade ago," Gilyard said.

William Wells, a principal at Studio M Architects Inc., said it designed the Cluster on 4th with an eye to students with midrange pocketbooks, who want a more independent lifestyle.

"A student could be a single mother with a kid," Wells said.

But Gilyard admitted some surprise that so many people are paying the high rents charged for some of the upscale projects.

"I don't know who's paying this, but evidently parents or kids are able to pay these relatively high rents," Gilyard said. "It's quite amazing."

Gilyard said his group is more focused on getting more apartments built near the university for non-students such as retirees, professionals and workers needing affordable housing.

"We're not seeing those developers yet," Gilyard said. "Those are the guys we're after."

Jennifer Bjorhus • 612-673-4683