Developers are moving forward with plans to build midrise apartment buildings on a trio of redevelopment sites in Minneapolis, including two that were originally going to be condominiums.
On Thursday, the Minneapolis Planning Commission Committee of the Whole will review plans for TMBR, an eight-story, mixed-use building with 107 units and 5,500 square feet of retail at 110 3rd Av. N. in the North Loop; a seven-story mixed-use building with 227 dwelling units and 5,300 square feet of commercial space at 416-420 E. Hennepin Av. in the Nicollet Island-East Bank neighborhood and a seven-story mixed-use building with 150 units and 2,700 square feet of commercial space at 2841 Hennepin Av. in Uptown.
The proposals follow a committee meeting last month that included several plans, including nearly 1,200 rentals in various parts of the city, which has seen rental vacancy rates increase slightly over the past several months.
All of the projects are on infill sites in neighborhoods that have already seen significant apartment construction, and they come at a time when the rental market in certain parts of the metro is expected to soften.
At the end of March, the average vacancy rate in Minneapolis was 4.3%, up slightly from last year at the same time, according to a first-quarter report from Marquette Advisors. But with an estimated 8,800 units expected to be completed this year, another 23,000 predicted during the following two years and an economic recession bearing down on the metro, the average vacancy rate is expected to hit double digits.
Curt Gunsbury of Solhem Cos. is the developer behind the project along E. Hennepin, which will replace a small office building, auto repair shop and parking lot on a triangular-shaped site that’s also bordered by Central Avenue. The project is his eighth on the east side of the Mississippi River.
Gunsbury said that while vacancies are increasing elsewhere in the city, demand for rentals in that area have so far been brisk. He said the building is designed with undulating walls and unusually large balconies that offer views down Hennepin and Central Avenues toward the downtown Minneapolis skyline.
In contrast to three luxury high-rise apartment towers that were recently built in the area, he’s targeting more budget-conscious tenants with rents that will be affordable to those who earn 60 to 80% of the area median income, which is “basically lower- to middle-class in the [income] bell curve,” he said.
He’s also presenting an option to replace the required street-level retail space with walk-ups that might appeal to renters who want a live-work space or want direct access to the sidewalk. The retail scene in the city has only worsened, he said, and he’s hoping to convince city officials that the best way now to animate the streetscape is with renters rather than vacant retail space.
His proposal comes after at least two other developers attempted to redevelop the site. The most recent was by Fe Equus Development, one of the developers of the Hewing Hotel in the North Loop. That proposal called for a low-rise condominium building.
The Uptown proposal is from the Trilogy Real Estate Group, which wants to build on a site that’s been home to several failed restaurants including Old Chicago and most recently the Piggy Bank. It would replace the one-level restaurant building and a surface lot that’s adjacent to the Midtown Greenway. In a staff report, the developer and its architect, Minneapolis-based ESG, say the aim is to “complete” the pedestrian promenade on the north side of the Midtown Greenway by creating a link that will connect Hennepin Avenue to Aldrich Avenue.
In the North Loop, Todd Simning of Ador Homes is pitching a new plan for a surface lot where he originally planned to build TMBR, billed as one of the tallest all-wood condo buildings in the Midwest. He scuttled those plans earlier this year after the COVID-19 pandemic caused a government shutdown. He said that while condo sales had been brisk, he wanted to eliminate his exposure to the kind of protracted recession that followed the Great Recession. The new plan is shorter than his original proposal and won’t be built entirely of timbers, but the massing and general appearance of the building will be similar to what had been proposed.
Mary Bujold, president of Maxfield Research in Minneapolis, said that with all of the new development in each of these areas, it was just a matter of time before someone came along to upgrade them.
“The sites are underutilized sites and have been for some time,” she said. “Multifamily seems to be the highest and best use there from a redevelopment perspective.”