Saying St. Paul needs a range of housing to meet its goals for vitality and affordability, Mayor Melvin Carter on Wednesday vetoed the City Council's rejection of a $60 million apartment and retail project at University Avenue and Lexington Parkway.

A divided council last week voted 4-3 to deny a site plan by Minneapolis-based Alatus for a 288-unit project on a long-vacant 2-acre parcel near the Green Line.

For more than a year, opponents have voiced fears that the project — with about half its rents at market rate — will speed gentrification and displacement in nearby low-income areas. Carter disagreed.

"While I do believe we share a common vision for shared prosperity and affordable housing in our city, your April 7, 2021, vote to deny the development application for this project runs contrary to these goals, and stands to create significant challenges to future housing and economic development in our city," Carter wrote in a letter to the City Council explaining his veto.

"While the enormity of our vision for affordable and inclusive housing in St. Paul may make it difficult for any single development proposal to advance all of our goals, we are responsible for advancing housing and economic development opportunities that will be critical for our city's continued growth and vibrancy."

But Tia Williams, co-director of the Frogtown Neighborhood Association, said Thursday that Carter has no authority over land use appeals and his veto has no effect.

"His purported veto failed to address any of the issues that the city must address in approving a site plan application — including consistency with the plan and city ordinances," she wrote in an e-mail.

"The planning commission and the City Council based their decisions on specific land use regulations and it is within their power to do so. It is not within the power of the mayor to overturn their decisionmaking process."

Peter Leggett, the mayor's communications director, said that in this instance Carter has the authority to veto the council.

If the veto sticks, it appears to clear the way for Lexington Station — a project that seeks no city subsidy and asks for no zoning variances.

The council would need five votes to override Carter's action.

"Yes, we will be moving the project forward and working toward a land closing and construction start in the near future," Chris Osmundson, director of development for Alatus, said in an e-mail.

The council vote followed an earlier 8-7 vote by the St. Paul Planning Commission to reject the site plan.

Although city staff have recommended approval, planning commission members echoed concerns about how well the project fit in with long-term affordability goals in the city's Comprehensive Plan.

Alatus had said it would make 124 efficiency units affordable to renters making 60% of area median income. And before the vote last week, Alatus officials announced another 20 units would be affordable for those making 50% of area median income.

That move helped the proposal win the support of the Union Park District Council.

But it wasn't enough to convince Council Members Dai Thao, Mitra Jalali, Jane Prince and Nelsie Yang, who voted to deny the appeal. Rebecca Noecker, Amy Brendmoen and Chris Tolbert voted in favor of the project moving forward.

At the time, Noecker said she didn't believe the city can legally justify denying a project that needed no variances and sought no financial subsidy.

While the project would be in the city's Union Park neighborhood — a mile east of Allianz Field — it borders Frogtown, one of St. Paul's most economically challenged neighborhoods.

According to the Minnesota Housing Partnership, Twin Cities-area median income in 2016 was more than $85,000 for a family of four. In St. Paul, it was just over $64,000.

And in Frogtown, median income is less than $40,000, according to Minnesota Compass.

Housing advocates said the project not only is far out of reach for Frogtown residents, but it would also drive up area rents and taxes.

In his letter, Carter said he agreed "with the desire for this project to include units of deeply affordable housing. To that end, I will encourage the developer to seek Project Based Section 8 funding for Lexington Station at the next available opportunity."

"While we know these funds are highly competitive, if they choose to apply, I will support the developer's application, and will work to help it succeed."

James Walsh • 612-673-7428