Minneapolis is on the cusp of getting its third major condo project since the recession.
Developer Bob Lux said Tuesday that he will build a 40-story tower with 207 condominiums in the Marcy-Holmes neighborhood just across the river from downtown Minneapolis.
The decision comes after months of speculation about whether Lux would build apartments or condos on the site at 200 Central Av., now the location for a Washburn-McReavy funeral home.
“We recognize that condominium homes are more difficult to construct and that the site would accommodate apartments nicely,” Lux said. “But city leaders and neighborhood groups have helped us recognize that this site presents a great opportunity to respond to the area’s need for quality for-sale housing and to take a step toward achieving the city’s long-term population goals.”
New renderings displayed at the Marcy-Holmes Neighborhood Association meeting Tuesday night show a sleek glass and concrete tower with recessed balconies sitting atop a broader podium base that would house a new restaurant to be developed and operated by Ryan Burnet.
Those renderings come several months after Lux, founder of Alatus, announced plans to acquire the site and build a residential tower. If approved, the project would be only the third major condo project to be built in the city since the 2008 recession. Stonebridge Lofts, in the Mill District was the first, opening in 2014. Early last year, Jim Stanton of Shamrock Development broke ground on the second: Portland Tower at S. 8th Street and Portland Avenue in downtown Minneapolis.
Agents say there’s deep demand from buyers ranging from young professionals to empty nesters.
“That northeast area is primed for some new condos,” said Luke Kleckner, a sales agent who is marketing Portland Tower. “And that Washburn-McReavy site is ideal, but as always, the success will depend not just on outstanding location, but the combination of quality, price, amenities, delivery and parking.”
Kleckner and other agents say that demand for condos is so strong that many sell before officially being listed. “Over half the units don’t even make it to the ‘open market,’ ” he said.
In part, that’s because of scarcity. Twin Cities-area developers in recent years focused almost exclusively on building luxury apartments. Meanwhile, buyers burned through the inventory of condos built before the housing crash and there’s just a two-month supply of for-sale condos in the city. That shortage has caused steep increases in prices, but a modest decline in the number of sales because there are so few options for buyers.
At 200 Central, Lux said condo prices are likely to range from mid-$300,000s to several million dollars for top-floor units, which will be able to accommodate outdoor swimming pools.
Lux won’t require a set number of presales before construction is expected to begin this fall.
In the meantime, a sales team at Sotheby’s is accepting names of interested buyers, but formal marketing won’t start until after construction begins.
Despite pent-up demand, developers have avoided condo construction in part because of the liability created by the state’s construction defects statutes, which are among the most stringent in the nation.
Lux, who has built two high-rise condos in Minneapolis, said that to reduce exposure to those warranty laws, Alatus “will adhere to a stringent protocol and quality assurances for constructing high-rise residential buildings that has proved very successful for us in the past.”
Because the project is in the heart of the St. Anthony Falls Historic District, every element, including its height, has been scrutinized.
Hung Russell, co-chair of the Marcy-Holmes Land Use committee, said that the majority of the group voted in favor of the project last fall and that after several recent revisions to the design the height of the building remains the primary issue.
“The point of contention for most people, and the point of ambiguity, probably has to do with the height,” he said. “There are some who are still not 100 percent in favor of the height, but we’re trying to balance that with what it could potentially contribute to the neighborhood.”
The next step in the planning process will come next month or in March when the project is reviewed by the Heritage Preservation Commission before going through the standard entitlement process.
The tower was designed by ESG Architects, which focused on integrating the historic character of the neighborhood with the needs of a modern, high-density tower. The four-story base of the building will be clad primary with limestone while the tower will be glass and metal.
Buyers will have the option of contemporary or traditional styles, but all will have open floor plans with floor-to-ceiling windows to take advantage of skyline and river views.
“Buyers will feel that they’ve entered a boutique hotel,” Lux said. “Careful attention will be paid to the details and art program to make sure spaces feel curated over time, instead of generic and contrived.”