40 Story Condo Tower Coming soon…

Lux decides 40-story tower at Washburn-McReavy site should be condos

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 of a Washburn-McReavy funeral home.
By  Star Tribune
JANUARY 19, 2016 — 7:07PM
itemprop
ESG ARCHITECTS
Minneapolis is on the cusp of getting its second 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 shown 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.

ESG Architects

ESG Architects
 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 second major condo project to be built in the city since the 2008 recession. Early last year, Jim Stanton of Shamrock Development broke ground on the first: 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 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.

“Buyer 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.”

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Couple aim to build hotel on their parking lot near Vikings stadium

Michael and Ann Roess have owned their commercial retail and office building and adjacent parking lot at 903 Washington Ave. since 2004. They want to build a 10-story, 136-room hotel on the parking lot, two blocks north of the U.S. Bank Stadium in Minneapolis. Staff photo: Bill Klotz

Couple aim to build hotel on their parking lot near Vikings stadium

By: Hank Long Hank Long December 23, 2015 6:50 am

Michael and Ann Roess directed tailgaters into their parking lot for hours on Vikings game days when the Metrodome was still open.

They considered it a family affair, with their two daughters also guiding fans to the lot next to the Roesses’ 903 Washington Ave. retail and officebuilding in Minneapolis. The property is two blocks north of the future stadium.

Now with the U.S. Bank Stadium nearing completion on the former Metrodome site, and the Ryan Cos.-led $450 million Downtown East project well underway, the Roess family has new plans for the lot.

They want to build the Stone Arch Hotel, a 10-story, 136-room proposal they’ll submit to the city in the first quarter of 2016.

The Roesses expect the hotel, a half-mile south of the historic Stone Arch Bridge, to open by the 2019 NCAA Men’s Basketball Final Four championship. By then their hotel could be just one of several existing and new hotels in and around Downtown East, including the Aloft Minneapolis that sits across the street. More than 600 new hotel rooms are planned or are under construction in the neighborhood.

Even so, the Roesses aren’t fazed by the competition.

They plan to connect the future hotel to their building, which now houses the Fusion and Sanctuary restaurants on the southwest corner of Washington and 10th avenues. The new project would also include a first-floor 5,500-square-foot restaurant, separated from the restaurants in the 903 Washington building.

They want to break ground on the boutique-style hotel byfall 2016. While it’s possible the hotel would open in time for the Super Bowl in February 2018, Michael Roess said he won’t take short cuts on a property his family plans to own for a long time.

“We want this to be a legacy building for us,” Michael Roess said. “Initially, we were focused on the Super Bowl, but we really just want to do this right.”

Since they purchased the 15,000-square-foot building in 2004, the Downtown East neighborhood has undergone a dramatic real estate transformation – and it’s not just the new stadium driving it. Wells Fargo is moving workers next year into more than 1 million square feet of new office space built by Ryan.

This is the couple’s first hotel project. In 2007, Michael Roess converted the former Whitney Hotel into Whitney Lofts condos at Portland Avenue and Second Street, just west of the Mill Street Museum. They own several commercial properties in the Twin Cities, including office-retail properties in Woodbury and Burnsville.

The Stone Arch Hotel project comes at a time when the competition has already teed up other “soft brand” hotel projects with national banners. Graves Hospitality plans to build a 150-room Marriott-brand Moxy Hotel at the southeast corner of Chicago and Washington. To the west, Mortenson is planning a 188-roomHyatt Centric hotel at 800 Washington Ave. S. Carlson Rezidor is building a 164-room Radisson Red at 609 Third St. S., which is expected to open by fall 2016.

The Roesses are in the process of securing an independent hotel operator that will help the Stone Arch Hotel stand out as a locally owned property that connects guests with the history and culture of the area.

“We have been in Minneapolis pretty much all of our lives. We know this city very, very well and we want to our guests to feel like they are part of that story,” Ann Roess said.

The project has received a letter of support from the Downtown Minneapolis Neighborhood Association. She recently joined the organization’s land use committee, after the project was reviewed.

While city officials are in early talks with the couple on the hotel project, no planning application has been submitted, said Matt Lindstrom, city spokesman.

As of November, hotel occupancy in downtown Minneapolis was nearly 75 percentand is projected to continue at healthy levels through 2017 despite the addition of hundreds of rooms, according to a Downtown East market study the city commissioned from Minneapolis-based Perkins + Will.

While the study projects the Downtown East market will be a “hotbed” for hotel development and consumer demand over the next few years, that market might soon be overbuilt, said John Sheehan, principal of Blaine-based Commercial Realty and Consulting.

“When everything that is planned for that area comes on line, I think it’s going to become an extremely competitive market, to the point where rooms are almost going to become a commodity,” Sheehan said.

The city’s Community Planning and Economic Development Department has seen a cluster of hotel projects proposed in and around Downtown East in recent years, but not every project has come to fruition, said Beth Elliot, a long-range planner for CPED.

“We’ve seen a lot of renderings of hotels,” Elliot said. “We are just going to continue to watch and see what is proposed.”

Michael Roess believes the hospitality demand in Downtown East will continue to grow, well beyond game days at the new Vikings stadium.

“There is so much that is happening here with new office development and the new stadium; so, in terms of long-term demand, we think there’s a lot to be excited about,” he said.

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‘Tremendous’ progress for Ryan’s Downtown East development

The first of two Wells Fargo office towers within the Downtown East development in Minneapolis are scheduled to get a certificate of occupancy in January. Staff photo: Bill Klotz

‘Tremendous’ progress for Ryan’s Downtown East development

By: Brian Johnson December 22, 2015 4:28 pm

After two years and seven months of construction, Ryan Cos. US Inc.’s signature $450 million Downtown East development is racing to the finish line involving a five-block area near the U.S. Bank Stadium site.

As is the case with any major project, some unexpected things have cropped up during construction, including the discovery of old foundations and “urban fill” under Fourth Street, said Tony Barranco, vice president of development for Minneapolis-based Ryan.

But overall, “our progress has been tremendous,” he said of the 12.5-acre area northeast of Fifth Avenue South and Fifth Street.

Downtown East is connected figuratively and literally to the new $1.09 billion Vikings stadium, which is why the Minnesota Sports Facilities Authority invited Barranco to give an update at last Friday’s board meeting.

Anchored by two 17-story Wells Fargo office towers, the Downtown East project also will include 26,000 square feet of retail space, a 4.2-acre public park, a 1,600-space MSFA-owned parking ramp, skyway connections, an apartment complex, a hotel and a four-story office building.

Including public components, Downtown East represents north of $500 million worth of new development within a once unremarkable eastern part of downtown Minneapolis, according to Ryan.

Heading into 2016, the development has a full head of steam, starting with the six-story public parking ramp, scheduled to open on Jan. 1. The ramp will offer parking for the football stadium and Wells Fargo employees.

The ramp is at Fourth Street and Chicago Avenue, directly northwest of the football stadium, with entrances available on Chicago, Third and Park avenues.

Up next are the Wells Fargo towers on a site bordered by Fourth Street, Fifth Avenue, Third Street and Park Avenue. One building is west of Portland Avenue; the other is east of Portland Avenue.

The westernmost building will have a certificate of occupancy in January and the first occupants will arrive in late February, Barranco said. The east tower will open about 90 days later.

Skyway connections will link the parking ramp and office towers to U.S. Bank Stadium, which is 85 percent complete.

Skyway connections are complete, but they won’t be fully open to the public until the connected buildings receive their certificates of occupancy, Barranco said.

Besides foot traffic, the skyway levels will offer 15,000 square feet of retail space, including a Wells Fargo bank branch. Barranco said Ryan will soon be able to go public with three or four additional leases.

Michele Kelm-Helgen, chair of the MSFA, said the skyway connections played a big role in the successful bids to bring the 2018 Super Bowl and the 2019 NCAA Final Four basketball tournament to the new stadium.

“A big part of our success was being able to show them that now the stadium, in those winter months, has a climate-controlled walking connection to the stadium,” she said.

Residential construction includes 195 units in three separate buildings, known collectively as the Edition. Pre-leasing is in progress and a model unit recently opened, Barranco said.

All three apartment buildings will be finished by July 1.

Meanwhile, construction just started on Carlson Rezidor Hotel Group’s 164-room Radisson Red Hotel on Third Street between Park and Portland avenues. In October, Ryan sold the parcel at 619 Third St. S. for $3.6 million to the Carlson Cos.-affiliated entity.

The hotel, about a block northwest of the soon-to-open MSFA parking ramp, is also to the north of one of the Wells Fargo towers.

Deane Bruner, vice president of business development for Carlson Hospitality, said it will be the closest hotel connected to the U.S. Bank Stadium. The project is “coming out of the ground,” and the hotel will be open in the fourth quarter of 2016, Bruner said.

Bruner said the hotel will be “millennial-focused” – not from an age standpoint, but as a mindset. Customers will be able to check in and order food, among other things, with their personal devices, he said.

“It’s BYOD – bring your own device,” Bruner said, adding that about 7,000 feet square feet of retail space within the hotel is planned for a “destination-type restaurant.”

As Finance & Commerce reported in October, the $22 million Commons Park project started to take shape in August, when crews began to tear down the former Star Tribune headquarters at 425 Portland Ave. S. to make way for the park.

The goal is to build as much of the park as possible by mid- to late summer, but fundraising is still an ongoing challenge. Most recently, Ryan Cos., Wells Fargo and the city of Minneapolis agreed in August to contribute a combined $7 million to the park.

Minneapolis City Council Member Jacob Frey said in an interview that the park will not be “a regular old neighborhood park with swings and a baseball diamond,” but rather a major gathering place.

“The planning, design and ultimate construction of the Commons and other development in Downtown East is going extremely well,” he added. “The end result will be, I think, a brilliant transformation of an entire region of downtown.”

At Friday’s meeting, Barranco put in a strong plug for its new four-story office building to rise at South Third Street and Fifth Avenue South in the shadow of the Wells Fargo towers. Ryan purchased the site in 2014 as part of a $30.5 million transaction with the Star Tribune newspaper.

Ryan announced in late November that it plans to move its corporate headquarters into the 172,000-square-foot structure, to be known as the Millwright Building. Construction is expected to start this spring and end in spring 2017.

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Top 10 Twin Cities home sales of 2015

Bob Lothenbach, CEO of Shakopee-based Imagine! Print Solutions, paid $8.18 million for a four-bedroom, four-bath home and 6.5 acres with a substantial slice of Lake Minnetonka shoreline -- and development potential -- at 2770 Gale Road in Woodland. Submitted photo: Ellen DeHaven

Top 10 Twin Cities home sales of 2015

By: Anne Bretts December 26, 2015 7:09 am

Editor’s note: The top 10 home sales list has been compiled using information from the Northstar Multiple Listing Service data for Minnesota and western Wisconsin, the Minnesota Department of Revenue and county property records, covering sales closed through Dec. 15. No major pending sales are slated to close before Jan. 1.

Minnesotans usually aren’t known for being showy, but there is nothing modest about the top 10 homes sold in the Twin Cities market this year.

At $8.18 million, the top home price was far ahead of the pack, but that pack included a roster of stunning properties starting at $4 million. And most of those properties were purchased with cash.

Bob Lothenbach, CEO of Shakopee-based Imagine! Print Solutions, paid that amount in cash for the four-bedroom, four bath, 4,170-square-foot home and 6.5 acres with a healthy slice of shoreline and development potential at 2770 Gale Road in Woodland.

New homes also are part of the future for the 23-acre estate of Wendy White Dayton’s Orono estate, which sold in September for $5.3 million.

The top mansion on the list is a sprawling a mid-century rambler with lakeshore at 19550 Cedarhurst in Deephaven, which sold in July for $5.8 million.

As usual, most of the top homes were clustered in Minneapolis and around Lake Minnetonka, although a $4 million sale on White Bear Lake made the top 10 list – and set a record for the top sale of the year in Washington County.

The Dayton estate was one of two homes on the list in Orono, named in November as No. 9 on the annualColdwell Banker Home Listing Report ranking the most expensive housing markets in the United States.

“The top sales are very impressive and encouraging relative to the strength of the upper-bracket housing market,” said Bonnie Velie, director of as Coldwell Banker Burnet Previews Distinctive Homes. “This is a direct reflection of the confidence of our clients regarding local economy.”

Coldwell Banker Burnet still dominates the luxury home market, but this year’s list of top sales offers a diverse group of agents.

Downtown Minneapolis condominiums took two spots, with restaurateur Keyvan Talebi selling his unit in The Carlyle to a California buyer for $4.3 million in a “make-me-move” deal and a private buyer paying $4.235 million for a unit in the Washburn Lofts.

“Downtown’s never been stronger,” said Edina Realty agent Fritz Kroll, who lives and works in the city’s condo market. “I wish we had some strong new stuff to sell,” he said.

He notes that while the city is awash in new apartments, there’s only one condominium project under construction. The lack of inventory means sellers, buyers and agents use networking to move among buildings without formally listing properties.

1. $8.18 million: 2770 Gale Road, Woodland
Four-bedroom, four-bath, 4,170-square-foot home, built in 1950 on 6.5 acres
Sold: 9-6-15
Buyer: Bob Lothenbach
Agent:
 John Adams, Coldwell Banker Burnet
Seller:
 Joanne and Benton J. Case
Agent: Meredith Howell, Coldwell Banker Burnet

Las Vegas theater owner Johnny Brenden sold the Lake Minnetonka home built by his mother, the late Roberta Mann-Brenden, for $5.8 million. She was the daughter of theater mogul Ted Mann and actress Rhonda Fleming. Submitted photo: Ellen DeHaven

2. $5.825 million: 19550 Cedarhurst, Deephaven
Price includes two related deeds of $4.275 million and $1.549 million for a seven-bedroom, seven-bath home, built in 1957 on 2.6 acres
Sold: 7-19-15
Buyer:
 Jeffrey and Michelle Hinck
Agent:
 Ellen DeHaven, Coldwell Banker Burnet
Seller:
 Johnny Brenden, grandson of theater mogul Ted Mann and actress Rhonda Fleming
Agent: Ellen DeHaven, Coldwell Banker Burnet

 

 

 

 

A Dayton family estate on Mooney Lake in Orono, at 300 County Road 6, fetched $5.3 million in a sale to a Wayzata real estate investor. File photo: Bill Klotz

3. $5.3 million: 300 County Road 6, Orono

Six-bedroom, six-bath 6,627-square-foot home built in 1959 on 23 acres along Mooney Lake
Sold: 9-18-15
Buyer:
 BPS Properties LLC/George Stickney
Agent: George Stickney, Coldwell Banker Burnet
Seller: Wendy White Dayton, aunt of Gov. Mark Dayton
Agent: Meredith Howell, Coldwell Banker Burnet

 

 

 

 

 

Proto Labs founder Lawrence Lukis paid $5 million in cash for the 7,117-square-foot five-bedroom, five-bath home at 320 Ferndale Road in Wayzata. File photo: Bill Klotz

4. $5 million: 320 Ferndale Road S., Wayzata
Five-bedroom, five-bath 7,117-square-foot home, built in 2002 on 1.5 acres
Sold: 11-12-15
Buyer:
 Lawrence J. Lukis, founder of Proto Labs
Agent: Debbie McNally, Lake Sotheby’s International Realty
Seller: Bahram Yusefzadeh
Agent: Laurie Hunt Turtinen, Coldwell Banker Burnet

 

 

 

 

 

 

5. $4.5 million:1280 Bracketts Point Road, Orono

Four-bedroom, five-bath 6,703-square-foot home, built in 1987 on 1.7 acres
Sold: 9-15-15
Buyer:
 Richard and Larissa Stockton
Agent:
 Pauline Olson, Edina Realty
Seller:
 B. Kristine Johnson Declaration of Trust
Agent:
 Ellen DeHaven, Coldwell Banker Burnet

6. $4.327 million: 4300 Chimo East St., Deephaven
Four-bedroom, eight-bath 8,471-square-foot home, built in 2000 on 1.06 acres
Sold: 2-24-15
Buyer:
 Joseph Conner
Agent: 
Mark Grieger, Coldwell Banker Burnet
Seller:
 Peter and Rebecca Jones
Agent:
 Kathleen Murphy/Melissa Murphy Olmscheid, Edina Realty

The $4.3 million sale price for a penthouse condominium in the Carlyle at 100 Third Ave. S. in Minneapolis put it in the same league as prices for some homes sold this year along Lake Minnetonka. File photo: Bill Klotz

7. (tie) $4.3 million: 100 Third Ave. S. No. 3702, Minneapolis
3,600-square-foot penthouse condo in The Carlyle
Sold: 6-2-15
Buyer:
 Pretty Things LLC
Agent: Cynthia K. Froid, Keller Williams Integrity; Barry Berg, Coldwell Banker Burnet
Seller: Restaurateur Keyvan Talebi
Agent:
 Sold by owner

 

 

 

 

 

 

7. (tie) $4.3 million: 2333 County Road 24, Medina
Six-bedroom, 10-bath 14,164-square-foot home, built in 2002 on 15.61 acres
Sold: 10-30-15
Buyer:
 Michael and Victoria McGowan
Agent:
 Mike Ross, Edina Realty
Seller: Thomas and Michelle Tille
Agent: Robert Hare, Coldwell Banker Burnet

 

 

A trust related to Lawrence Perlman, former chairman and CEO of Control Data/Ceridian Corp. and Seagate Technology, sold a two-bedroom condo in the Washburn Lofts in downtown Minneapolis for $4.235 million. File photo: Bill Klotz

9. $4.235 million: 700 S. Second St. No. W31, Minneapolis
Two-bedroom, two-bath 4,024-square-foot condo in the Washburn Lofts
Sold: 1-21-15
Buyer:
 Ellem & Opie LLC
Agent: Cynthia Froid, Keller Williams Integrity
Seller:
 LP-LPP Trust, related to Lawrence Perlman, former chairman and CEO of Control Data/Ceridian Corp. and Seagate Technology
Agent:
 Cynthia Froid, Keller Williams Integrity

 

 

 

 

 

 

 

 

 

10. (tie) $4 million: 532 Ferndale Road W., Wayzata
Seven-bedroom, seven-bath 6,228-square foot home built in 1934 on 0.7 acres
Sold: 3-10-15
Buyer:
 Phillip Soran and Margaret Selby-Soran
Agent:
 Patty Morris, Coldwell Banker Burnet
Seller:
 Sendoro Properties LLC
Agent:
 Cindy Redmond, Coldwell Banker Burnet

10. (tie) $4 million: 54 Peninsula Road, Dellwood
Five-bedroom, six-bath, 7,495-square-foot home, built in 1912 on 3.5 acres
Sold:
 9-10-15
Buyer:
 Russell and Patricia Becker
Agent:
 N/A
Seller:
 Ford and Katherine Nicholson
Agent:
 N/A

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Vikings stadium 85 percent complete; budget goes up again

More than $710 million worth of construction has been completed for the new Vikings stadium, as seen from Fourth Street in downtown Minneapolis. Staff photo: Bill Klotz

Vikings stadium 85 percent complete; budget goes up again

By: Brian Johnson December 18, 2015 3:54 pm

With seven months of construction to go, the Vikings stadium is now 85 percent complete and the project’s cost has grown to just north of $1.09 billion with the latest budget amendment.

The Minnesota Sports Facilities Authority added $232,345 to the budget Friday to allow for energy efficiency improvements within the building’s heating equipment and curtain wall.

The action essentially seals a deal with NRG Energy Center Minneapolis, which is contractually obligated to cover the cost, according to the authority. NRG is under contract to provide steam and chilled water services for the stadium.

“This is a good-news, win-win for the environment and for the project,” MSFA CEO and executive director Ted Mondale said at Friday’s MSFA board meeting.

The additional money covers the cost of “flooded heat exchangers” within the heating equipment and “argon-filled glass” within the curtain wall, both of which will make the building more energy efficient, Mondale said.

“Water comes through the heat exchanger and the heat exchanger gets it to the right temperature, then it flows through the building,” he said.

With the changes, the project’s budget climbs to $1.091 billion. That includes $498 million in public funding, $578 million from the team, $10 million from food and beverage provider Aramark, and other sources.

Also on Friday, the MSFA approved a request for proposals for construction services on the stadium’s West Plaza.

In July, the MSFA agreed to a $400,000 contract with Dallas-based HKS to design the stadium’s West Plaza, which includes portions of Chicago Avenue between Fourth and Fifth streets, and the stretch of Fifth Avenue between Park and Chicago avenues and the Hennepin County Medical Examiner’s block. HKS is also the stadium designer.

The MSFA staff is negotiating a contract revision with Golden Valley-based Mortenson Construction, the stadium’s construction manager, for West Plaza construction. But the MSFA wanted additional flexibility if it can’t cut a deal with Mortenson.

“We are keeping our options open at this point,” MSFA board chair Michele Kelm-Helgen said after the meeting.

Mondale said it’s a time-sensitive matter, with the West Plaza design work expected to be done before the end of the year. The West Plaza budget is $5.8 million, MSFA communications director Jenn Hathaway said in an email.

The MSFA also authorized staff to complete negotiations and enter into a contract for the installation of the artificial turf playing surface. A request for proposals was released Wednesday. Hathaway said the turf budget is $900,000.

Mondale said he expects proposals to come in shortly. A vendor is expected to be selected before the MSFA’s January board meeting.

“There are not a lot of major stadium turf providers, so we expect it will be just a couple of firms,” Mondale said. “This [board action] allows us to go ahead and award the contract should we come to the proper terms and proper type of system.”

Artificial turf installation is scheduled from May 9 to May 29, according to the RFP.

Also at the meeting, Mortenson Construction executive Kevin Dalager told the board that $710 million worth of work has been completed through November with help from 2.7 million “crew hours” and 280 Minnesota-based companies.

The stadium increasingly looks like a finished product from the outside, but work is quietly progressing on the interior, as well.

Concrete crews poured the final “slab-on-grade” section on the interior bowl event level last week, a milestone that allows Wells, Minnesota-based Wells Concrete to complete precast stadium activities, Dalager said.

The stadium bowl is starting to have a “finished look,” he said.

Workers are also moving forward with retractable seating, lighting, scoreboard and ribbon board installation, finishing work (especially on the north side), restrooms, concession stands and more.

Crews are ready for winter construction. With help from a temporary heating system and 53 air-handling units, the building will be kept at 50 degrees inside throughout the winter, Dalager said.

Construction is on schedule for completion in July.

MSFA executives, staff to get pay raises

The Minnesota Sports Facilities Authority on Friday approved pay increases for its staff members, including the board chair and executive director.

MSFA board chair Michele Kelm-Helgen’s annual salary will increase 2.5 percent to $130,275, and CEO/executive director Ted Mondale will see a 1.9 percent increase to $165,333, according to MSFA documents.

Salaries for most full-time employees will increase 2.5 percent. But salaries or wage rates for three positions – senior executive office assistant/office administrator, project coordinator for the MSFA board and a finance assistant – will go up 10 percent.

The 10 percent pay increases reflect additional job duties for those positions, the MSFA said.

Mondale’s pay increase was limited to 1.9 percent because anything higher would put him above the “local government compensation” limit of $165,333. The compensation limit, approved by the Minnesota Management and Budget Commissioner, takes effect Jan. 1.

As the basis for the pay adjustments, the MSFA cited tentative agreements in place for state labor plans. Those agreements include salary increases of 2.5 percent effective July 2015 and another 2.5 percent starting in July 2016.

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Buying a car? A home? Fed rate increase shouldn’t matter much; ‘Most people won’t even notice’

Buying a car? A home? Fed rate increase shouldn’t matter much; ‘Most people won’t even notice’

By CHRISTOPHER S. RUGABER Associated Press  |  DECEMBER 16, 2015 — 3:55PM

WASHINGTON — For anyone considering whether to buy a home or car, the Federal Reserve’s interest rate increase Wednesday shouldn’t make much difference.

The rates that most people pay for mortgages, auto loans or college tuition aren’t expected to jump anytime soon. The Fed’s benchmark interest rate has limited influence on those things.

Still, the Fed’s move to lift its key rate by a quarter-percentage point will raise short-term borrowing costs for banks. And that, in turn, is intended to prod banks to boost certain other rates. Rates on credit cards and home equity loans and credit lines, for example, will most likely rise, though probably only slightly.

The rate the Fed controls is only one factor among many that can influence longer-term borrowing costs. And the Fed made clear it will assess the economy’s health before raising rates further.

“Loans that are linked to longer-term interest rates are unlikely to move very much,” Fed Chair Janet Yellen said at a news conference. “Credit card rates … might move up slightly. But remember, we have very low rates, and we’ve made a very small move.”

Mortgage rates tend to move in sync with the yield on 10-year Treasury notes. When inflation remains as low as it is now, Treasury notes, with their modest returns, are considered a safe and decent investment. And heavy purchases of Treasurys by U.S. and foreign investors — and by many foreign governments, such as China — help keep those yields low.

“The demand for Treasurys has mushroomed,” said Carl Tannenbaum, chief economist at Northern Trust. “What that means is that for any given monetary policy, interest rates are still going to be lower than they would have been 10 or 15 years ago.”

The Fed’s decision to raise rates is in many ways a healthy sign: It’s a vote of confidence that the economy, 6½ years after the Great Recession officially ended, can finally withstand higher borrowing costs and keep growing at an acceptable pace.

Even with a rate increase, most economists expect consumer spending to stay heathy and solid hiring to continue, perhaps even driving unemployment even further below its current low level of 5 percent. Should the economy stumble, the Fed could postpone further rate increases.

Other trends are also working in consumers’ favor: Gas prices are still falling, and there are signs that paychecks are finally starting to rise after years of sluggish growth.

“These things are good for the consumer and will easily outweigh the impact of a rate increase,” said Chris Christopher, an economist at forecasting firm IHS Global Insight.

The most visible effects of the Fed increases will probably be in short-term borrowing. Rates for credit cards and home equity lines of credit should rise, typically by the same amount as the Fed’s increase. The increases could appear as soon as one or two months after the Fed’s action. Those rates are tied to banks’ prime rate, which responds quickly to the Fed’s changes.

Also, Americans with adjustable-rate mortgages will probably face a higher rate at the date of their next adjustment. Auto-loan costs may rise as well, economists said, though not as fast as the short-term rate the Fed controls. Auto-loan rates typically follow the yield on two-year Treasurys.

Greg McBride, chief financial analyst at Bankrate.com, calculates that for a $25,000, five-year car loan, a one-quarter percentage point increase would boost monthly payments by precisely $3.

“The interest rate impact on the typical household from a quarter percentage point move is almost inconsequential,” he said. “Most people won’t even notice.”

And most people buy homes for reasons that have little to do with a slight rise or fall in mortgage rates, McBride said. They tend to buy when they feel financially secure or experience a major life change, such as having children.

“All those reasons people buy houses remain the same, whether mortgage rates are 4 percent or 4.25 percent,” McBride said.

Last month, Doug Lewandowski moved up the closing date on his purchase of a two-bedroom Chicago condo so that he could lock in his rate. He has seen mortgage rates rise by a quarter-point since he started looking in August. Still, the timing of the Fed’s move wasn’t a big factor in his decision.

“I didn’t want rates to jump up significantly,” he said, “but I wasn’t willing to settle on a place just to get a lower interest rate.”

Lewandowski’s outlook, if typical of prospective homeowners, is one reason many economists think home sales may rise next year even if mortgage rates tick up.

Many analysts expect the Fed to gradually raise its short-term rate by a total of 1 percentage point by the end of 2016. If so, Frank Nothaft, chief economist at CoreLogic, forecasts that the average 30-year fixed mortgage would rise from roughly 4 percent to about 4.5 percent.

To put that in perspective, before the Great Recession the 30-year fixed mortgage rate never fell below even 5 percent.

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United to partner with Greystar on tower project

United Properties this year proposed a 36-story mixed-use tower with apartments and a hotel on the Nicollet Hotel Block site, at 30 Third St. S. in downtown Minneapolis. Submitted image: LHB Inc.

United to partner with Greystar on tower project

By: Hank Long Hank Long December 10, 2015 3:45 pm

Bloomington-based United Properties has selected South Carolina-based Greystar as a new partner for its Gateway project in downtown Minneapolis.

Greystar will lead the housing and hotel components of the mixed-use project on the Nicollet Hotel block. United Properties in the spring offered the city $10.4 million for the block to build a tower of up to 36 stories on the vacant site at 30 Third St. S.

United Properties and Greystar are evaluating hotel partners and brands and expect to announce one in early 2016, United Properties President Bill Katter said Thursday in a prepared statement.

“During the first half of 2016, our project team will work to finalize an updated design, to identify a brand for the hotel and to begin the entitlement process with the city of Minneapolis,” Katter said in a prepared statement.

Greystar representatives couldn’t be immediately reached for comment.

United Properties’ decision to bring in Greystar comes after its previous partners for the development – Bloomington-based StuartCo and Texas-based Aimbridge Hospitality – dropped out of the project in June.

The city selected United Properties this spring over three other development teams led by Bloomington-based Doran Cos., Golden Valley-based M.A. Mortenson Co. and Minneapolis-based Duval Development.

In addition to the proposed hotel/apartment tower, the project is to include street-level retail, below-grade parking and skyway-level access to the Hennepin County Library, better known as the Minneapolis Central Library.

Significant green space will be created to align with the adjacent Cancer Survivors Park area and the future Minneapolis trolley car system, the company said.

The site is the former home of the 18-story Nicollet Hotel, demolished in 1991.

Submitted image: LHB Inc.
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Twin Cities pending home sales up 18%

Twin Cities pending home sales up 18%

By: Brian Johnson December 11, 2015 1:07 pm

Pending home sales in the Twin Cities jumped more than 18 percent last month compared with year-ago levels, the largest increase since June, according to the Minneapolis Area Association of Realtors.

MAAR, which tracks residential sales in the 13-county metro area, said Friday that the Twin Cities saw 3,497 signed contracts for pending home sales, up 18.1 percent, and 3,785 new listings, up 11.5 percent.

Closed sales were up 1.3 percent to 3,343.

In other market indicators, the median sales price ticked up 7.3 percent to $219,900 and the median list price rose 4.6 percent to $229,995. Housing inventory fell 18.5 percent to 12,984 active units, MAAR reported.

MAAR attributed the sales increases in part to unseasonably warm temperatures, solid job and wage growth, favorable interest rates and strong demand.

MAAR President Mike Hoffman said the November numbers are consistent with the trends throughout the fall.

“There is a comfort in consistency,” Hoffman said.

Among property types, single-family houses represented the biggest gains, followed by townhomes and condos, MAAR said. Existing homes sales increased at nearly twice the rate as new construction.

Sales of homes priced at $400,000 or more increased 15.9 percent, but those in the $150,000-or-less category declined 19.3 percent.

Declining sales of lower-priced homes stems from a decrease in distressed homes on the market, said David Arbit, MAAR’s director of Research, Economics & Policy. The share of total sales classified as foreclosures or “short sales” fell to 11 percent.

Prices in specific locations – including St. Louis Park, Edina and southwest Minneapolis – have reached “record highs,” MAAR said. Half the homes in Edina sell for more than $400,000, while the median price in St. Paul is $168,000, Arbit said.

Sellers received 95.8 percent of their original list price, and homes sold more quickly in November. A typical home was on the market for 73 days, a 7.6 percent decline.

Meanwhile, strong market fundamentals bode well for home sales.

The unemployment rate in the Minneapolis-St. Paul-Bloomington metro area is 3.1 percent, according to the Bureau of Labor Statistics. That’s the lowest rate of any major metro area and well below the national level of 5 percent, MAAR noted.

Mortgage rates remain low at about 4 percent. Though a rate hike by the Federal Reserve is expected in December, changes in mortgage rates will be “slow and incremental,” MAAR said.

“With all but one month of 2015 in the books, we’re really starting to see how the year will stack up,” MAAR president-elect Judy Shields said in a statement. “Since consumer demand for housing has fully recovered, the seller component is still the missing puzzle piece.”

Permits for new housing units were up in November.

As previously reported, builders pulled 450 permits for 1,555 new housing units in the 13-county metro area and Rochester during the month, according to the Keystone Report. Permits were up 11 percent and units were up 80 percent from November 2014.

That total includes 414 permits for single-family houses, up 7 percent, and 1,141 planned multifamily units, up 139 percent.

Nov. 2015 % change from Nov. 2014 Year-to-date % change from 2014
Median sales price $219,900 7.3 $220,000 6.8
Closed sales 3,343 1.3 52,377 13.6
Pending sales 3,497 18.1 54,132 16.2
Days on market 73 -7.6 75 -3.8
% of original price received 95.8 1.2 96.7 0.9
Inventory of homes for sale 12,984 -18.5 N/A N/A
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CPM pays $6.75M for Cheapo site in Uptown

Minneapolis-based CPM has closed on the Cheapo’s site for a six-story mixed-use building at 1300 W. Lake St. in Minneapolis, which is set to include 125 apartments above office and retail space. Submitted image: ESG Architects

Just Sold: CPM pays $6.75M for Cheapo site in Uptown

By: Anne Bretts December 8, 2015 12:19 pm

Editor’s note: “Just Sold” is a Finance & Commerce feature based on certificates of real estate value recently filed for commercial transactions and significant residential transactions in Twin Cities counties. Additional details in the transactions come from Plat Research, the Minnesota Secretary of State’s Office, company documents, online real estate listings, F&C archives, CoStar and other research. Some purchase prices and per-unit calculations have been rounded. Full prices are available on the CRVs posted with Just Sold here.

1300 W. Lake St., Minneapolis

An entity related to CPM Cos. paid $6.75 million to secure the former Cheapo Discs building at 1300 W. Lake St. in Minneapolis, which it plans to replace with a new six-story building with retail and office space and 125 market-rate apartments.

“Demo starts now,” CPM developer Daniel Oberpriller said Tuesday.

Construction will begin within 30 days to meet a timeline that will let residents begin moving in by May 2017. “Nobody wants to move in January,” he said, explaining the delicate balance of interest rates, weather, construction schedules and tenant convenience.

The project also requires some delicate maneuvering to complete demolition and construction on a site that is about a foot away from The Walkway, a high-end apartment complex with 92 units and multiple restaurants.

“It will be very tight,” he said.

The company is used to tight spaces. This is the fourth project Minneapolis-based CPM has under construction in Uptown and the fifth one underway in the city.

Lake and Freemont LLC, the CPM entity, closed Dec. 3 on the purchase of the 25,000-square-foot building from the Richard M. Schulze Trust, which is related to retailer Best Buy’s founder of the same name. The price appeared when the certificate of real estate value was made public Monday.

Oberpriller has had the property under contract since April, but had declined to disclose terms of the deal. Hennepin County values the 66-year-old property at $2.92 million, according to property tax records. Cheapo and its iconic red sign have moved to new space at 2600 Nicollet Ave.

Minneapolis-based ESG Architects created the design for the project, which will be built on the northwest corner of Lake Street and Fremont Avenue, just northeast of Calhoun Square. Minneapolis-based ReuterWalton Commercial LLC is the general contractor.

The site includes parcels at 2928 Fremont Ave. S. and at 1300 and 1300½ W. Lake St. The design has been tweaked since it was unveiled last summer, most significantly by reducing the number of apartments from 130 to 125.

The plan calls for 20,000 square feet of retail space and about 5,000 square feet of boutique office space. CPM hasn’t announced any tenants yet.

Farther west, CPM is busy with three other housing projects. Work has already started on a 45-unit buildingat Lagoon and Irving avenues, a four-story mixed-use building at 1708 and 1714 W. Lake St., and a similar building called 16Twenty just a block east of that. The company also is working on its Doubletree Hotel by Hilton project near the University of Minnesota.

Purchase price: $6.75 million, with no down payment and new financing

Price per square foot: $270; Hennepin County values the property at $2.92 million

Property ID: 33-029-24-43-0097/0098/0099

Date of deed: 12-3-15

ECRV released: 12-7-15

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Nye’s site developer ponders next step after HPC attaches strings

Schafer Richardson plans to build a six-story apartment building with first-floor retail at 116 E. Hennepin Ave. in northeast Minneapolis. The site is currently home to Nye’s Polonaise Room. (Submitted rendering: ESG Architects)

Nye’s site developer ponders next step after HPC attaches strings

By: Hank Long Hank Long

December 2, 2015 2:18 pm

A proposed apartment development at the Nye’s Polonaise site in northeast Minneapolis received the go-ahead from the city’s Heritage Preservation Commission on Tuesday. But it was unclear after the meeting whether several conditions the commission attached to that approval would prove too costly for the developer to move forward with the project.

Minneapolis-based Schafer Richardson wants to build a six-story building with 71 market-rate apartments on the half-acre site at 116 E. Hennepin Ave. Two of the buildings on the site — a former harness shop and the 112 Hennepin building — are considered contributing buildings to the St. Anthony Falls historic district. The developer plans to preserve those buildings as part of the project.

Late last year the developer announced its plans to partner with Nye’s owners to build a 29-story, 189-unit residential tower. But in September it decided to scale back those plans following criticism from neighborhood groups and Our Lady of Lourdes, a nearby church, over how the tower would fit in the historic neighborhood.

In October the developer submitted to the HPC a downsized project that it said addresses feedback it received from stakeholders while still maintaining its financial viability. The revised 115,000-square-foot development would keep first-floor retail space but reduce parking and would maintain two the historic buildings linked to the iconic bar and restaurant.

Following two hours of discussion on Tuesday, the commission voted 6-4 to issue the certificate of appropriateness for the alteration of two of the existing buildings and construction of the new building on the 0.51-acre site. The approval contained 10 planning staff recommended conditions, half of which the developer’s architects had asked commissioners to drop, citing the economic challenges they would pose to the project.

On Wednesday, Schafer Richardson principal Kit Richardson said his team of architects and contractors are evaluating the impact those conditions would have on the development’s viability.

“We’re working on what the next steps are and whether those conditions materially affect the project,” Richardson said in an interview Wednesday.

Architects for ESG, which the developer hired for the project, told commissioners one of the conditions — which would require the developer alter its design so the proposed building’s HVAC penetrations are not located on elevations facing the public street — could have a significant impact on the economic viability of the project.

Richardson said the prospect of having to move those HVAC penetrations to another portion of the building are a concern.

“[That requirement] affects the economics, the aesthetics, the layout of the units; it’s not just a simple black and white issue,” he said.

The commission voted earlier in the meeting to issue a certificate of appropriateness to raze the single-story buildings on the site that make up the current Nye’s restaurant.

During the Tuesday hearing, commissioners remained divided over whether several of the project’s aesthetics would deviate from the historic guidelines for the district.

Richardson disagreed with those notions.

“It meets all the guidelines; I think the [city planning] staff acknowledged that,” he said.

Planning staff told commissioners that it hadn’t received any comments from the public on the updated project. But Ted Tucker, an area resident and member of the St. Anthony Falls Heritage Preservation Committee, expressed his support for the development during the meeting.

“I find this is a sensible solution, not only in its accordance with the guidelines, but also in terms of how it would impact pedestrian experience in the east Hennepin area,” Tucker said.

A project applicant has 10 days to appeal to the city council following an HPC decision, said Matt Lindstrom, city spokesperson. If the developer decides to move forward with the project it would next need approval from the planning commission.

City Council Member Jacob Frey, whose Ward 3 includes the St. Anthony Falls historic district, said feedback from the community on the most recent iteration of the Nye’s site project has been “by and large, very, very positive.”

The project as currently proposed would retain “two arguably historic structures, add value on an empty surface parking lot and expand the pedestrian realm” along the site, Frey said. “It’s a really nice project. Personally, I really like it.”

Nye’s, a favorite corner bar in Minneapolis, plans to close early next year after more than six decades in business.

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