A 40-story tower that has been mired in legal challenges cleared a final hurdle after the Minnesota Supreme Court denied a petition to block construction.

That decision clears the way for Minneapolis-based Alatus to start construction of the tower, which was first pitched in mid-2014 for a quarter-block site at the corner of 2nd and Central Avenue SE. The parcel is in the St. Anthony Falls Historic District, which limits the height of new development in the area.

Plans call for 214 for-sale condominiums in a narrow glass and steel tower that will sit atop a four-story limestone "podium" with underground parking and ground-floor dining and retail.

The Neighbors for East Bank Livability (NEBL) opposed various aspects of the proposal, including the height and density of the tower. The group filed a variety of challenges, including one to the city's approval of conditional-use permits and variances.

The case was sent to the state's Supreme Court after it was denied by the Minnesota Court of Appeals. Earlier this year a Hennepin County District Court judge granted a summary judgment to the city.

Erich Wunderlich, a member of the Marcy Holmes Neighborhood Association board of directors, said NEBL is disappointed by the outcome.

"At the same time, we're grateful that our efforts have energized a broad constituency of like-minded folks that are organizing around efforts to support reasonable development policies that acknowledge growth, while addressing effectively issues such as the negative impacts of increased density."

Chris Osmundson, development director for Alatus, said that construction is expected to begin during the first half of 2019. Prices for condo units will range from $375,000 to more than $3.5 million. More details about the name of the project and when presales will begin will be announced on Oct. 4.

The Washburn-McReavy Funeral Home most recently occupied the site and before that it housed the St. Anthony Commercial Club, which were both demolished by Alatus.

There are several residential towers under construction or in the pipeline in and around downtown Minneapolis, but only two of them include for-sale condominiums.

Ryan Cos. and Arcadia have been working on a competing luxury condo tower on the downtown side of the river. They hired New York-based Robert A.M. Stern Architects to design a 39-story, 101-unit tower for a riverfront site adjacent to Gold Medal Park.

Both projects will test the depth of the luxury condo market by adding more than 300 luxury units to the listing pool, including some with partly heated terraces and their own private pools and whirlpools.

To date, the downtown condo market has had a dearth of options for buyers because developers have been focused on building rental apartments.

At the current sales pace there were only enough condominium listings to last 1.9 months throughout the 13-county metro area compared with a 2.5-month supply for single-family houses, according to the Minneapolis Area Association of Realtors. On average, those new condo units sold for $484 per square foot during July.

The Ryan/Arcadia project is moving through the entitlement process; the Downtown Minneapolis Neighborhood Association has already provided a letter of support for the preliminary concept plan for the condo tower.

At a Downtown Minneapolis Neighborhood Association (DMNA) meeting Monday, Carl Runck, Ryan's director of real estate development, said that the project is "Proceeding toward city approvals this fall."

Jim Buchta • 612-673-7376