On Wednesday, the last day of 2014, a homebuilder walked into an office near City Hall, pulled a construction permit for a single-family house in southwest Minneapolis — and set a milestone.
For the first time, Minneapolis had issued $2 billion worth of new construction permits in a single year.
It was close. The final figure was only about $400,000 above the $2 billion threshold.
And the total was shaped by the two megaprojects on the east side of downtown: the new Vikings stadium and the Downtown East redevelopment. Those projects accounted for about $1 billion of the city’s 2014 construction permits.
Without those projects, Minneapolis would have still approached the $1 billion mark for the third year in a row, though the 2014 total would have been below 2013’s.
“Yes, the stadium is one of those great projects for us. But it has really sparked other great development down in that area,” said Doug Kress, director of development services for the city. “There’s a lot of growth in Minneapolis in both downtown and our neighborhoods.”
The downtown residential boom is no secret, but only about a third of the new construction in 2014 was for housing.
“With growth in commercial development, that means more job opportunities,” Kress said.
Development has a long life cycle and there are several phases in a project that can be evaluated for economic impact. First comes city approval, when initial figures are produced. Next, the construction permits are pulled, which happens in Minneapolis at the Public Service Center near City Hall and the Federal Building. That step yields more tangible data. Then, politicians and planners look for the economic effect of activity that will occur within new structures.
“When we look at this,” Kress said, “we know these are going to be jobs for construction for years. And because many of these are office buildings, we know there will be businesses in there, so we know there is sustainable job growth, as well.”
After the new stadium and Downtown East, the next three construction projects by value were apartment complexes downtown and near the University of Minnesota.
The 2014 valuation of CPM Development’s WaHu apartment building near the U was more than $64 million, while M.A. Mortenson’s 4 MARQ apartments contributed $59 million and Alatus LLC’s Latitude 45 apartments added $53 million.
“The growth in residential means people want to be in Minneapolis,” Kress said. “And trends suggest they want to live where they work.”
Permits were issued for more than 2,000 housing units in 2014. Single-family homes accounted for 132 units while multifamily rounded out the balance.
While the entire city has seen growth, the bulk is concentrated in downtown Minneapolis and some nearby neighborhoods.
“It’s clear that a shift in the focal point of downtown is occurring and it’s definitely moving east toward the river,” said Council Member Jacob Frey, who represents Ward 3.
More than 65 percent of the new construction permits were issued for projects in Ward 3, which includes the North Loop, Downtown East, the downtown riverfront and northeast Minneapolis.
“When you look not just at the construction this year, but at the development in the pipeline on the Nicollet Island-East Bank area, we are not just looking at the traditional core anymore for tall buildings,” Frey said.
Proposals for several tall buildings are being considered for the area directly across the Mississippi River from downtown, including on the current sites of Superior Plating, Washburn-McReavy Funeral Home and Nye’s Polonaise Room.
At least 10 projects around the city that have already received land-use approval will be part of another strong year in 2015 for construction permits, Kress said. And portions of the Vikings stadium and Downtown East also have yet to be permitted, meaning those projects will also add to 2015 totals.
“Here we have yet more evidence of the confidence that investors, workers, business owners, and residents have in our vibrant, growing city,” said Minneapolis Mayor Betsy Hodges. “I look forward to building on this momentum as we continue to attract new residents, businesses and investment.”