Two visions for space near Vikings stadium: One housing, the other a hotel

hide

Downtown East Day view from stadium Ryan Companies

Two distinctly different visions — a hotel and an apartment tower — emerged this month for a key piece of property in downtown Minneapolis, right in the shadow of the new $1 billion Vikings stadium.

The city of Minneapolis received the pitches from two well-established Minnesota-based developers, Ryan Companies and Mortenson Development, for the space above a 1,610-space parking ramp that is part of a $400 million mixed-use development planned for eastern downtown.

The proposals represent a white-hot apartment market already in full throttle in downtown Minneapolis, as baby boomers and millennials flock to the urban core, as well as improving demand for hotel rooms post-Great Recession.

“It’s hard to go wrong with either,” said Steve Cramer, president and CEO of the Minneapolis Downtown Council, a business group that is neutral on the proposals. “Both uses will predominate as Downtown East fills out, and set the pace for future development.”

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.

Ryan’s $104 million idea for the space atop the parking ramp involves a 28-story apartment tower spanning about 344,000 square feet, with an additional 6,000 square feet of restaurant and retail space along S. 4th Street. Construction would begin in May 2015, with completion slated for August 2017.

The competing proposal came from Mortenson Development, whose sister company is building the nearby Vikings stadium. It has pitched a $63 million plan that includes a 300-room hotel dual-branded as AC by Marriott and SpringHill Suites by Marriott. Construction on this project would begin in January 2016, with completion expected by January 2017.

The city will pick a proposal by early March. Newly elected Mayor Betsy Hodges declined through a spokeswoman to say which option she favors, preferring to learn more about the ideas before deciding.

Councilman Jacob Frey, who represents the area, said he’s “fairly agnostic” on both the proposals. As the Downtown East project moves forward, he said his main concern is “getting additional eyes on the park. You have a two-and-a-half-block, and if it’s not vibrant, it can be dangerous.”

But once the proposals were made public, much of the discussion involved whether downtown Minneapolis can handle another influx of apartments. Experts say there’s room for more, especially in a corner of the city that’s become the target of so much new development, and where there’s currently very little housing.

“They’ll be creating a whole new submarket over there,” said Julie Lux, associate vice president with Cassidy Turley, a national commercial real estate company. “Excitement in the area surrounding the stadium will definitely help drive demand, and you’ll have a ton of new office space and hopefully the proper kind of retail mix that will support a healthy rental housing submarket.

Last year in downtown Minneapolis, nearly 1,500 new apartments were added to the rental pool, and 1,312 more are under construction and on their way to market this year, according to Maxfield Research Inc. That doesn’t include the thousands of apartments that are planned for other city neighborhoods, including the Uptown neighborhood and near the University of Minnesota campus.

In downtown alone, the average vacancy rate increased slightly from the third to fourth quarter and is now 4 percent, according to Marquette Advisors.

Job growth fuels demand

In certain submarkets of the city, including Uptown, there is some evidence that supply is outpacing demand. A handful of leasing managers are offering rental concessions, including a month’s free rent, but those offerings are few and far between.

Mary Bujold, president of Maxfield Research Inc., and other housing experts say that given current population and job growth estimates, the downtown market is capable of absorbing hundreds of new apartments without pushing the vacancy rate to unhealthy double-digit levels.

A new market report from Cassidy Turley cites an employment forecast that optimistically predicts a gain of 40,000 to 50,000 new jobs over the next three years, and a population increase of more than 30,000 per year through 2017 for the city. It’s still unclear how many of those new jobs and new residents will land in downtown, but the potential is there that hundreds of new units will be needed. An untold number of baby boomers and empty-nesters also are expected to move from their big houses in the suburbs to downtown.

There’s another important element that will guide the health of the market: the timing of the release of new units. While no one disputes that the market can handle more rental housing, there is some concern that if too many buildings open at the same time, the market could soften very quickly.

  • related content

  • 2 firms, 2 ideas for downtown Minneapolis parking facility

    Wednesday February 5, 2014

    Ryan foresees apartments, Mortenson sees a hotel in space above stadium parking ramp.

  • corner in questionRyan Companies already has been retained to construct a 1,600-space parking ramp at 728 S. 4th St.The City of Minneapolis will choose either Ryan Companies’ or Mortenson Development’s proposal for development on top of that parking ramp.

  • get related content delivered to your inbox

  • manage my email subscriptions

ADVERTISEMENT

Oakland - LP: D. Otero 8 FINAL
Kansas City - WP: J. Frasor 9
Minnesota 10/2/14 7:25 PM
Green Bay
Buffalo 10/5/14 12:00 PM
Detroit
Chicago 10/5/14 12:00 PM
Carolina
Cleveland 10/5/14 12:00 PM
Tennessee
St. Louis 10/5/14 12:00 PM
Philadelphia
Atlanta 10/5/14 12:00 PM
NY Giants
Tampa Bay 10/5/14 12:00 PM
New Orleans
Houston 10/5/14 12:00 PM
Dallas
Baltimore 10/5/14 12:00 PM
Indianapolis
Pittsburgh 10/5/14 12:00 PM
Jacksonville
Arizona 10/5/14 3:05 PM
Denver
Kansas City 10/5/14 3:25 PM
San Francisco
NY Jets 10/5/14 3:25 PM
San Diego
Cincinnati 10/5/14 7:30 PM
New England
Seattle 10/6/14 7:30 PM
Washington
NY Islanders 5 FINAL
Boston 3
NY Rangers 2 FINAL
Philadelphia 4
Ottawa 1 FINAL
Winnipeg 2
Carolina 1 FINAL
St. Louis 3
Tampa Bay 5 FINAL
Dallas 1
Colorado 0 FINAL
Calgary 2
Los Angeles 4 FINAL
San Jose 1
Fla Atlantic 10/2/14 6:00 PM
FIU
UCF 10/2/14 6:00 PM
Houston
Arizona 10/2/14 9:30 PM
(2) Oregon
Louisville 10/3/14 6:00 PM
Syracuse
San Diego St 10/3/14 9:00 PM
Fresno State
Utah State 10/3/14 9:15 PM
(18) BYU
(6) Texas A&M 10/4/14 11:00 AM
(12) Miss State
Ball State 10/4/14 11:00 AM
Army
Iowa State 10/4/14 11:00 AM
(21) Oklahoma State
Marshall 10/4/14 11:00 AM
Old Dominion
Southern Miss 10/4/14 11:00 AM
Middle Tennessee
(20) Ohio State 10/4/14 11:00 AM
Maryland
Purdue 10/4/14 11:00 AM
Illinois
Florida 10/4/14 11:00 AM
Tennessee
SMU 10/4/14 11:00 AM
(22) East Carolina
Virginia Tech 10/4/14 11:30 AM
North Carolina
Eastern Mich 10/4/14 1:00 PM
Akron
North Texas 10/4/14 1:30 PM
Indiana
Massachusetts 10/4/14 1:30 PM
Miami-Ohio
Tulsa 10/4/14 2:00 PM
Colorado State
New Mexico 10/4/14 2:30 PM
TX-San Antonio
(3) Alabama 10/4/14 2:30 PM
(11) Ole Miss
(14) Stanford 10/4/14 2:30 PM
(9) Notre Dame
(17) Wisconsin 10/4/14 2:30 PM
Northwestern
Navy 10/4/14 2:30 PM
Air Force
(7) Baylor 10/4/14 2:30 PM
Texas
(4) Oklahoma 10/4/14 2:30 PM
(25) TCU
Wake Forest 10/4/14 2:30 PM
(1) Florida State
NC State 10/4/14 2:30 PM
Clemson
Buffalo 10/4/14 2:30 PM
Bowling Green
Ohio U 10/4/14 2:30 PM
Central Mich
Oregon State 10/4/14 3:00 PM
Colorado
Vanderbilt 10/4/14 3:00 PM
(13) Georgia
Kansas 10/4/14 3:00 PM
West Virginia
Kent State 10/4/14 4:00 PM
Northern Ill
South Alabama 10/4/14 5:00 PM
Appalachian St
Texas-El Paso 10/4/14 6:00 PM
Louisiana Tech
(15) LSU 10/4/14 6:00 PM
(5) Auburn
UAB 10/4/14 6:00 PM
Western Ky
Texas Tech 10/4/14 6:00 PM
(23) Kansas State
Michigan 10/4/14 6:00 PM
Rutgers
Hawaii 10/4/14 6:00 PM
Rice
Toledo 10/4/14 6:00 PM
Western Mich
ULM 10/4/14 6:00 PM
Arkansas State
Georgia State 10/4/14 6:00 PM
Louisiana
Idaho 10/4/14 6:00 PM
Texas State
Memphis 10/4/14 6:00 PM
Cincinnati
Arizona State 10/4/14 6:30 PM
(16) USC
So Carolina 10/4/14 6:30 PM
Kentucky
Pittsburgh 10/4/14 6:30 PM
Virginia
Miami-Florida 10/4/14 6:30 PM
Georgia Tech
(19) Nebraska 10/4/14 7:00 PM
(10) Michigan State
UNLV 10/4/14 7:00 PM
San Jose St
Ga Southern 10/4/14 7:00 PM
New Mexico St
California 10/4/14 9:30 PM
Washington St
Utah 10/4/14 9:30 PM
(8) UCLA
Boise State 10/4/14 9:30 PM
Nevada
Winnipeg 10/3/14 6:00 PM
Ottawa
Calgary 10/3/14 9:00 PM
Saskatchewan
Edmonton 10/4/14 3:00 PM
Toronto
Brt Columbia 10/4/14 6:00 PM
Hamilton
Connect with twitterConnect with facebookConnect with Google+Connect with PinterestConnect with PinterestConnect with RssfeedConnect with email newsletters

ADVERTISEMENT

ADVERTISEMENT

Date/Opponent Time W L Score
2014 preseason     
Aug 8 - vs. Oakland 7 pmX10-6
Aug 16 - vs. Arizona 7:30 pmX30-28
Aug 23 - at Kansas City 7 pmX30-12
Aug 28 - at Tennessee 7 pmX19-3
2014 regular season     
Sep 7 - at St. Louis NoonX34-6
Sep 14 - vs. New England NoonX30-7
Sep 21 - at New Orleans NoonX20-9
Sep 28 - vs. Atlanta 3:25 pmX41-28
Oct 2 - at Green Bay 7:25 pm
Oct 12 - vs. Detroit Noon
Oct 19 - at. Buffalo Noon
Oct 26 - at Tampa Bay Noon
Nov 2 - vs. Washington Noon
Nov 9 - Bye
Nov 16 - at Chicago Noon
Nov. 23 - vs. Green Bay Noon
Nov. 30 - vs. Carolina Noon
Dec 7 - vs. NY Jets Noon
Dec 14 - at Detroit Noon
Dec 21 - at Miami Noon
Dec 28 - vs. Chicago Noon

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

question of the day

Poll: How will the Vikings do against Atlanta?

Weekly Question

ADVERTISEMENT

 
Close