Chris Grzybowski, a partÂner in the local ofÂfice of Utah-based Big-D Construction, is kind of a proxÂy for the Twin Cities buildÂing boom that in Minneapolis alone is heading for a record four years in a row of $1 bilÂlion-plus in comÂmerÂcial-resiÂdenÂtial buildÂing perÂmits isÂsued.
"We've been forÂtuÂnate," said Grzybowski, 51, a WisÂconÂsin naÂtive who moved to Minnesota with his famÂiÂly in 2013. "We've got about $180 milÂlion worth of proÂjects done or underway this year.
"It's been mostÂly mulÂtiÂfamily; also public works proÂjects; a bank buildÂing, a resÂtauÂrant. We're diÂverse. We also have put some proÂjects on Big-D's portÂfolios in ColÂoÂraÂdo, Washington and Utah through reÂlaÂtionÂships here. The ownÂer of Big-D is pretÂty hapÂpy with our perÂformÂance."
Yet Grzybowski and othÂer vetÂerÂan conÂtracÂtors also beÂlieve the pace of deÂvelÂopÂment, at least in downÂtown Minneapolis and at the University of Minnesota, will slow over the next year or so. Minneapolis topped a reÂcord $2 bilÂlion in conÂstrucÂtion perÂmits pulled in 2014. About a quarÂter of that was a big chunk of ViÂkings staÂdiÂum conÂstrucÂtion and reÂlated priÂvate deÂvelÂopÂments in Downtown East, the last unÂdeÂvelÂoped downÂtown tract.
Minneapolis crossed $1 ÂbilÂlion for 2015 in SepÂtemÂber, aÂgain thanks to about $120 milÂlion in conÂstrucÂtion perÂmits pulled for the Wells Fargo ofÂfice buildÂings that are nearÂly comÂplete in Downtown East and the nearÂby PortÂland Towers conÂdoÂminiÂums on SevÂenth Street, acÂcordÂing to city reÂcords. But this year should fall short of last year in terms of volÂume in the city, parÂticÂuÂlarÂly downÂtown. And things may be coolÂing in the sevÂerÂal years-hot loop that has witÂnessed its bigÂgest boom ever since 2010.
"PoÂtenÂtialÂly there will be some pain for deÂvelÂopÂers," said Kelly Doran, CEO of Doran Cos. and a deÂvelÂopÂer-buildÂer in the Twin Cities for 30-plus years.
Doran, who has been enÂgaged in at least $100 milÂlion in proÂjects for sevÂerÂal years, in 2009 broke ground on upscale stuÂdent housÂing on the U's East Bank camÂpus, and apartÂments for proÂfesÂsionÂals and reÂtirees downÂtown and near St. Anthony Main.
"We're still doing proÂjects downÂtown [as a conÂtracÂtor], but I don't underÂstand how all the planned downÂtown [resiÂdenÂtial] proÂjects are going to work," said Doran, who built hunÂdreds of downÂtown-area aÂpartÂment units that rent from $1,200 to $8,000 a month for a pentÂhouse.
He's lateÂly shiftÂed his foÂcus to mulÂtiÂfamily housÂing in MaÂple Grove and othÂer subÂurbs.
Some empÂty-nestÂer baby boomÂers are sellÂing housÂes into a solÂid marÂket and choosÂing to stay and rent in their home comÂmuÂniÂties.
Doran, the first deÂvelÂopÂer in town to get fiÂnanced and start buildÂing priÂvate proÂjects in late 2009, said: "Wall Street looks at real esÂtate as a comÂmodÂiÂty but it's not. It's a local game. You can have areas where its overÂbuilt in one neighÂborÂhood … and the U of M is now overÂbuilt.
"And alÂmost all our camÂpus buildÂings are at least 95 percent leased. The deÂbate is whethÂer these [neighborhoods] can take anyÂthing more."
Builders such as Doran and Big-D are swingÂing to the subÂurbs and parts of Minneapolis and St. Paul with marÂket-rate housÂing.
The part of the marÂket that still lags is afÂfordÂaÂble housÂing for workÂers whose wages haÂven't grown for a decÂade.
CEO Alan Arthur of nonprofit deÂvelÂopÂer Aeon and a variÂety of partÂners have spent about a decÂade on a $50 milÂlion overÂhaul of the once-blightÂed inÂterÂsecÂtion of PortÂland and Franklin aveÂnues in south Minneapolis with 250 housÂing units in four buildÂings that bear marÂket rents for famiÂlies of up to $1,600 per month but also afÂfordÂaÂble efÂfiÂcienÂcies and one-bedÂrooms for folks makÂing $12 an hour. The deÂvelÂopÂment inÂcludes reÂtail, child care and ofÂfice space.
HowÂever, afÂfordÂaÂble housÂing ofÂten takes years to deÂvelÂop through a patchÂwork of finanÂciÂers, inÂcludÂing banks, founÂdaÂtions, govÂernÂment and tax credÂits for afÂfluÂent investors who parÂticiÂpate. A few of these deals are now comÂing to fruÂiÂtion but not enÂough to supÂplant the acÂtivÂiÂty creÂatÂed by the taxÂpayÂer-fiÂnanced ViÂkings staÂdiÂum and the othÂer downÂtown proÂjects.
JaÂmey FlanÂnery, ownÂer of FlanÂnery Construction in St. Paul, which does up to $20 milÂlion a year in proÂjects, said she's balÂanÂcing afÂfordÂaÂble-housÂing proÂjects with nonprofit partÂners with small comÂmerÂcial deÂvelÂopÂments.
"We're paÂtient and we came out of the reÂcesÂsion very lean and grew slowÂly since 2011," said FlanÂnery, one of the few feÂmale conÂstrucÂtion-firm ownÂers. "This year was very busy. But it takes a long time to deÂvelÂop afÂfordÂaÂble housÂing with the 'alÂphaÂbet soup' of fundÂing. And we do light comÂmerÂcial, unÂder $2 milÂlion for most jobs, such as the new 'IÂtalÂian EatÂerÂy' on Cedar Avenue S.
"We're not exÂactÂly MorÂtenÂson Construction," (general contractor on the $1 billion-plus ViÂkings staÂdiÂum).
Neal St. Anthony • 612-673-7144 • neal.st.anthony@startribune.com