High hopes for development unfulfilled for Minneapolis' Hi-Lake LRT stop

Before the Hiawatha light-rail line opened in Minneapolis 10 years ago, neighbors at one of the busiest stops sketched a vision for their area that included more housing, pedestrian-friendly streets and an enclosed public market.

Even as light-rail ridership has remained strong, little has fundamentally changed at Lake Street and Hiawatha Avenue, a busy commercial center that remains dominated by surface parking lots. New leadership at City Hall has helped spur renewed interest in the Hi-Lake area, however, particularly a 6.5-acre site used by the school district for adult education programs.

Busy bus and rail lines at the intersection make Lake and Hiawatha the third-busiest transit hub in the metro area, according to Metro Transit, a fact that has taken on new importance in light of Mayor Betsy Hodges' goal of increasing the city's population by 100,000.

"She's saying not just grow it to half a million, but grow it along transit lines," said Eric Gustafson, executive director of the Corcoran Neighborhood Organization. "And this is the biggest development opportunity along a transit line that we have."

Development efforts at the school district site, a building and parking lot adjacent to the light-rail station, have nonetheless been stymied over where to move the popular GED and English courses that many immigrants and low-income residents rely on.

"It's in a good spot because it's right where all the people who need to get to it can get to it," GED student Darryl Laney said as he walked out of the building recently.

Lake and Hiawatha remains a harsh environment for pedestrians, who must navigate curving highway offramps and a busy six-lane street to reach various shopping centers. Upon exiting the southern end of the light-rail station, passengers find themselves either beneath a highway overpass or climbing stairs into a surface parking lot.

The city's 2000 plan for the area said it could accommodate about 1,250 units of housing over 20 years. Only 280 have sprung up (or are under construction) so far, the largest of which features 80 units and sits at the far end of the massive surface parking lot that accommodates primarily Target customers.

Sam Newberg, a consultant who helped craft a recent development proposal for the area, said there is a demand for housing along the line, but Lake Street remains a missed opportunity.

"There's been very little new, transit-oriented development close enough to the station to have a meaningful impact on the feel and the creation of a center of gravity, a critical mass, and any semblance of a transit village there," he said.

Site control is a big problem. The Target parking lot is owned by a mysterious entity which former council member Gary Schiff said is a blind trust based in Chicago. The city pushed unsuccessfully to reconfigure the store and parking lot when it was expanded in 2008. A city spokesman said the city has tried since 1999 to engage the owners of the land.

On the southeast corner, an Arby's, an auto repair shop and a medical clinic sit on small slivers of land that would likely need to be combined to develop a property. The owner of the Arby's site, developer Martin Harstad, said he has received two inquiries about the property but Arby's has several years left on its lease.

Wellington said site assembly has been the biggest hurdle in the area, noting that the Target parking lot would be redeveloped quickly if a slice of it were put up for sale. But he added that developing housing in low-income areas, vs. places like Uptown, takes more time, creativity and often government intervention.

"When you put a transit system through a lower-income area, you're not going to have developers rushing in and throwing up 10-story buildings the next week," said Wellington, who is in the process of assembling financing for a 130-apartment project on 32nd Street and Hiawatha.

That leaves many eyeing the school board site, which sits next to the light rail stop. The school district moved its adult education programs there in recent years after selling the Buzza building in Uptown for redevelopment. Its central location and proximity to transit have made it a popular spot for students.

"We're not fooling anybody," said Mark Bollinger, the school district's deputy chief operations officer. "The same reasons that we find it successful and useful for us would be the same that a mixed-use [development] or a business … might find it useful. Its location is just a great location."

Officially the site isn't for sale, but the board did issue a request for proposals to develop the site in 2010. L & H Station Development drafted a plan that included more than 500 apartments, 80,000 square feet of office space, adult education facilities and space for farmers market vendors, who currently operate on the school board surface parking lot in the summer.

"Our problem is we're running out of time," McLaughlin said. "We've been doing this for 10 months. And we need to be moving out of" the downtown location.

New City Council Member Alondra Cano has put a new spotlight on the property in her first weeks in office. A former school district employee, she said recently that she was meeting with school superintendent Bernadeia Johnson to discuss possible new locations for the adult education programs.

"The city hasn't prioritized this project," she said, adding that the stakeholders have been talking more lately about what they want out of any deal. "This has to be a win-win for everyone involved."