Old Home Creamery’s former headquarters at 370 University Av. in St. Paul: Groups are working to develop the 1912 building as mixed-use housing.
Joel Koyama, Star Tribune
Land bank helps to rehabilitate properties and catalyze growth
- Article by: DON JACOBSON
- Special to the Star Tribune
- June 21, 2012 - 5:26 PM
A little-known nonprofit that helps developers transform vacant commercial buildings raised its visibility this spring with a mixed-use housing project near the Central Corridor light-rail line in St. Paul.
The Twin Cities Community Land Bank, whose niche is to buy and then hold properties until a developer is found, has been working since 2009 to help stem the tide of abandoned properties. In March, it took on its highest-profile project to date, acquiring the Minnesota Milk Building at University and Western avenues.
The land bank agreed to buy the property for just over $1 million and hold it for 10 months while the Aurora/St. Anthony Neighborhood Development Corp., which intends to acquire the building, finds a developer. Given its location next to the light-rail line stop, Aurora envisions the site as a transit-oriented, mixed-income housing development.
"Aurora/St. Anthony had a purchase agreement ... but had not yet been able to select a development partner and was not ready to close on the property," said Margo Geffen, the land bank's senior program manager. "They were at risk of losing it."
Old Home Creamery, the former owner and occupant of the building, spent about $300,000 upgrading the 1930s-era art deco facade in 2000 after discovering that the area between it and the original 1912 brick structure had become unstable due to moisture. But it was ultimately determined that the building was unsafe and Old Home moved its operations to New Brighton in 2006. It spent the next five years trying to find a buyer for the structure and had even considered tearing it down.
Then Aurora/St. Anthony entered the picture with the idea of a housing/retail project. The nonprofit has since found a development partner, St. Cloud-based Sand Companies, and is lining up financing for the project.
The land bank's new president, Sandy Oakes, said the group works by tapping its financial resources to buy distressed properties in danger of condemnation and demolition and holding -- or banking -- them for developers who want to rehabilitate the structures but who may not have the resources to do so right away.
"We now have 28 properties land-banked," she said, adding that most are "interim" holdings, meaning that agreements have been reached with developers to buy and hold the sites for up to one year as they arrange their financing.
"Some of the neighborhoods we work in need a lot of support, and will continue to need it even if the foreclosure crisis goes away," Oakes said. "You likely still will have vacant, boarded-up or forfeited properties for a variety of reasons in these communities, and developers will still need the kinds of tools we can offer."
The idea of banking land has been around since the 1970s when waves of manufacturing layoffs hit Rust Belt cities like Detroit and Pittsburgh, and working-class neighborhoods became littered with abandoned homes. That phenomenon has now been revived in the wake of the 2008 financial crisis.
The Twin Cities land bank was launched by the nonprofit Family Housing Fund three years ago with $30 million to disperse, raised through a mix of tax credits and state, federal and private loans. While mostly working to facilitate home renovations, the land bank has also taken part in several efforts to save and rehabilitate commercial buildings. The nonprofit aims to stabilize communities hit hard by the economic downturn and get properties back on the tax rolls.
Nieeta Presley, executive director of Aurora/St. Anthony Neighborhood Development Corp., said the land bank was a big help in achieving the dream of a community-oriented development at the now-struggling University-Western corner.
"It helps to be able to do it now while the light-rail construction is still ongoing," she said. "That way, it's in sync with what's going on at the corner from the start. Securing the site helped catalyze it so it could be part of that acceleration."
Don Jacobson is a St. Paul-based freelance writer.
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