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A Long Way From Surface Parking Lots: Downtown East's Rapid Transformation

Ryan Companies' work in DT East includes two office towers (right) for Wells Fargo, courtesy Ryan Co

Courtesy Downtown East Commons

ESG Architects' Encore, courtesy ESG

Photo by Bill Kelley

Rendering of HCMC expansion, courtesy HCMC

About 10 years ago, Tony Kuechle, a senior vice president at the development firm Sherman Associates, attended a much-anticipated Vikings-Packers showdown at the old Metrodome with his future wife. Afterward, as the game day crowds dispersed, the coupled wandered north toward the Mississippi riverfront.
“There wasn’t much to see,” Kuechle remembers. “The Guthrie Theater wasn’t open yet, very few people were living in the area — it was basically the Mill City Museum, Mill Ruins Park and a lot of surface parking lots.”
Part of their stroll traversed a storied, if temporarily neglected, part of town. Since the 19th century, the area southeast of 5th Avenue, northeast of Washington Avenue, and northwest of 11th Avenue has had a distinct identity and name: the Mill District, historic core of Minneapolis’ once world-renowned milling industry.
Until the mid-to-late 2000s, the same couldn’t be said for the broader area southwest of Washington, southwest of 4th or 5th avenues, northeast of the Hennepin County Medical Center (HCMC) complex, and northwest of 11th Avenue. Though the area included part of a major hospital and Minnesota’s largest stadium, this part of downtown Minneapolis was a geographical no-man’s land.

The landscape, mostly parking lots, wasn’t exactly blighted — more like empty, except immediately before and after Vikings home games.
It isn’t anymore.
Downtown East debuts
Kuechle, who’s worked in and closely followed the area for years, first heard the term “Downtown East” several years ago, when plans for a new Vikings stadium were first taking shape. Downtown East describes the whole zone, including the historic Mill District and former no-man’s land.
Downtown East’s transformation began at the riverfront, the neighborhood’s most distinctive natural feature. The opening of Mill Ruins Park in 2001, the Mill City Museum in 2003, the new Guthrie Theater in 2006 and Gold Medal Park in 2007 paved the way for the area’s first major residential development projects in decades. An early project, the 282-unit Bridgewater Lofts, featured amenities previously unheard of in the area: rooftop patio with hot tub and fire pit, spacious workout room, two-level community space.
Now activity is spreading well to the south, into the near void between Washington Avenue and HCMC, and also east of Gold Medal Park. Four of the Minneapolis Downtown Council’s Downtown 2025 Plan’s 10 goals are being partly or fully realized in Downtown East: building a new Vikings Stadium, increasing downtown Minneapolis’ population to 70,000 by 2025, “showcas[ing] the riverfront,” and forging new connections to the University of Minnesota (due to the newly opened Green Line light rail, and a number of planned or current development projects near I-35W, the dividing line between Downtown East and the U of M’s West Bank).
The flurry of new, in-progress and proposed development in Downtown East is keeping the Downtown 2025 Plan on track. And the development blitz is cutting an entirely new neighborhood from whole cloth — a rare opportunity for the city of Minneapolis.
Not just a stadium story
The new Vikings stadium is the elephant in Downtown East’s room. Visible for miles, the gargantuan structure literally looms over the neighborhood. Local boosters have reason to hope the stadium will be a good thing for Downtown East; its predecessor, the Metrodome, did nothing to spur development before or after its 1982 opening.
Optimists note that Downtown East development began before the stadium’s final approval. Perhaps more important, the stadium isn’t the area’s only development driver. Other catalysts include more frequent rail service thanks to the Green Line; Wells Fargo’s massive new complex, soon to house about 5,000 workers; Downtown East Commons (or, simply, The Commons), a Hargreaves Associates-designed park that will serve as the centerpiece of Downtown East’s stadium district; and HCMC’s 322,000-square-foot planned expansion at Downtown East’s southwestern edge.
Collectively, these catalysts are driving a flurry of mixed-use development in Downtown East. At least two hotels are slated to join Aloft, which opened in the early 2010s: a smallish Radisson Red property between Park and Portland avenyes, built by Ryan Companies and adjacent to the development firm’s Wells Fargo complex; and a yet-to-be-named, 150-room hotel in Sherman Associates’ Thresher Square redevelopment.
As Downtown East’s office-space portfolio grows and big-ticket stadium events like the 2018 Super Bowl and 2019 NCAA Final Four tournament approach, more hotel announcements are likely: According to Kuechle, the long-vacant “E Liner” parcel at 800 Washington Avenue is a prime candidate for a four- or five-story boutique hotel; a handful of vacant or disused sites near the stadium hold longer-term promise. 
Though hotels are important for local businesses and the stadium, city and local stakeholders are even more excited about the prospect of thousands of new residents and office workers — and the infrastructure necessary to keep them fit, fed and entertained around the clock. Stonebridge Lofts, a 164-unit Shamrock Development condo complex near Gold Medal Park and the Bridgewater, drew intense buyer interest when it opened last year.
And the slate of proposed and under-construction projects is formidable. Sherman’s Thresher Square will add about 180 apartments, plus an upscale grocery store and smaller commercial spaces. The 12-story Encore apartments, designed by ESG Architects and another Sherman project, will include 120-plus luxury apartments and redefine “amenity-rich living”: private rooftop dining area and demo kitchen, panoramic skyline views, a first-floor fitness area with hot tub and sauna, and a sprawling second-floor club room and bar. Encore’s residents should expect to pay for these amenities: Kuechle says rents are likely to be comparable to properties in the heart of Minneapolis’s central business district.
Shamrock Development has two separate projects, both in the planning stages, on opposite edges of Downtown East: a 112-unit, 17-story condo building near HCMC, where unit prices will start in the $200,000s and stretch to the high $500,000s; and a 400-unit, multi-phase condo complex, with yet-to-be-determined pricing, near the intersection of Washington and 35W. Even more ambitious projects are in the works: Last year, Ryan Companies won a heated competition for the right to build a massive apartment tower just north of the Vikings stadium; the building could be as high as 35 stories and house up to 360 units.
A truly mixed-income neighborhood?
Despite pricey housing in some pockets of Downtown East, housing costs aren't rising uniformly across the neighborhood.
"There's an abundance of existing workforce housing in surrounding neighborhoods” like Elliot Park, says Kjersti Monson, long-range planning director at the Minneapolis’s Community Planning and Economic Development (CPED) department. Reasonable rents and home values in this existing housing stock should limit rapid price appreciation on Downtown East’s southwestern edge, at least for the next few years.
While there aren't any major workforce housing projects on the table for Downtown East proper, new housing outside the Mill District is proving within reach of the area's middle-class residents. When Sherman announced Thresher Square, for instance, it estimated rents would run around $2 per square foot, per month — significantly less than the Encore, which sits closer to the river and Gold Medal Park.
And Downtown East isn't developing uniformly. The area south and southwest of The Commons is peppered with underutilized city-owned and privately held parcels. Although Monson is optimistic that the remaining city-owned parcels in Downtown East will be sold off within the next couple years, developers probably won't build them out all at once. Doing so could create a housing glut and reduce projects' profitability.
“In some parts of Downtown East, land values need to overtake the value of the existing use,” says Kuechle. “A surface parking lot or two-story light industrial building may still make more sense, financially, than an eight-story apartment or office building.”
Another advantage of building a new neighborhood from scratch: Since few people lived in Downtown East 10 or 15 years ago, the area doesn't have an existing population to displace. Regardless of the block-by-block cost of housing in the area, its transition to a more vibrant, affluent district has been orderly.
A new neighborhood
Though the neighborhood’s character is likely to change once the Vikings Stadium, Wells Fargo complex and The Commons are open, Downtown East has thus far proved a redoubt mainly for affluent Baby Boomers and hip, professional Millennials who value the area’s urban feel, transit access and proximity to downtown nightlife.
“The Mill District and riverfront areas are particularly popular with retirees and empty nesters,” says Monson, while Millennials congregate on both sides of Washington Avenue. Millennials who enjoy having the option to walk to work like the fact that Downtown East is emerging as a creative hub. Firms getting a lot of buzz, like Humdinger & Sons and Periscope, now line Washington Avenue. The design-friendly paint firm Valspar recently completed a major revamp of its 11th Avenue South office.
Tom Woodward, a Nebraska native who moved to MSP in the mid-2000s, is representative of Downtown East’s Millennials. The young IT consultant moved into a rented apartment near the intersection of Park and Washington avenues in Spring 2012, then purchased a Bridgewater condo in Fall 2014. Woodward initially chose Downtown East because the neighborhood was cheaper than the North Loop and just as convenient to his workplace. When he first moved, the area was still awakening from its long slumber. The local “excitement factor” didn’t register until he’d settled in.
“When I first moved to the Park Avenue apartment, the building was mostly surrounded by parking lots,” he recalls. “And then, suddenly, blocks were being torn up, there were cranes everywhere, traffic was heavier, and new bars and restaurants were opening up faster than I could keep track.”
Downtown East’s accelerating growth convinced Woodward to put down roots in the area. “My goal was always to buy a home in an urban, up-and-coming area,” he says, citing the high likelihood of price appreciation and the wealth of conveniences and lifestyle amenities — bars, restaurants, parks and retail — within walking distance.
Those amenities strongly influence Woodward’s current plan to hold on to his condo for the long haul. But he’s not sure whether he wants to keep the place as a primary residence or, somewhere down the line, convert it into a lucrative rental property. “[The condo] is a bit cramped for kids,” he says. “I can see myself moving out, buying a larger house somewhere else, and renting the condo to someone who doesn’t need as much space.”
Woodward’s long-term plan highlights a weak spot that Downtown East needs to correct: a relative lack of resources and safety features for parents and kids. There currently isn’t a public school in the area commonly defined as Downtown East, though a small charter school is tentatively scheduled to open near the stadium this fall. Until Thresher Square’s completion, the neighborhood won’t have a grocery store, either. And despite rapidly increasing density, Downtown East remains scarred by a handful of thoroughfares and pedestrian-unfriendly streets that discourage active street life and human-scale interactions.
New locals take the reins
The good news: Downtown East residents, many of whom didn’t live in the neighborhood a decade (or even a few years) ago, are taking ownership and banding together to hash out solutions to the area’s issues. In late February, for instance, a near-capacity crowd at the Mill City Museum spiritedly debated potential configurations for Portland and Park avenues, which would both cut through The Commons. Some advocated little change to the roadways’ layout; others argued for the permanent closure of one or both.
One proposal that seemed to gain some traction — and may find support with city and county decision-makers — involved permanently narrowing Portland through The Commons and closing both Park and Portland on game days. Similar conversations are afoot about the future of the Downtown East segment of Washington Avenue, currently a six-lane (plus parking on some blocks) swath that’s difficult to cross on foot and lacks separated bike lanes.
“Local stakeholders care about building a livable, people-friendly Downtown East,” says Monson. “As development comes online throughout the area, it’s [the city’s] job to create engaging public spaces and promote public safety.” Those aspects fall under the purview of the Downtown Public Realm Framework (DPRF), a master document that outlines public-space needs and opportunities across all downtown neighborhoods.
In Downtown East, DPRF identifies a need for enhanced street vegetation, including more trees and native grasses; better wayfinding, particularly around the stadium; better placemaking, through small-scale solutions like parklets; more bike racks and other bits of bike-friendly infrastructure; and fewer barriers to pedestrian traffic flows.
Though, according to Kuechle, one quirky barrier is likely to stay thanks to historic preservation requirements: an incongruous stone retaining wall, the vestigial remnant of an ancient rail spur, that impedes pedestrians near the intersection of Washington and Chicago avenues.
Next for Downtown East?
The surface lots and disused structures are all but gone from the Mill District, and they’re giving way to construction cranes in much of the rest of Downtown East. But the area’s rebirth is far from done.
As MSP and the new Vikings stadium gear up to host the Super Bowl in 2018 and the NCAA Final Four tournament in 2019 — the region's highest-profile events since 2008's Republican National Convention — Downtown East will soon be the national face of the capital of The North.
It's quite a step up for a neighborhood that barely existed a decade ago. And the attention that Downtown East brings to MSP at large could be transformative for the entire region, turning MSP into a true magnet for national and global talent.
"We need to continue capturing homegrown talent, but also to pull more effectively from the coasts" and beyond, says Carl Runck, director of development for Ryan Companies. Growth in Downtown East can help MSP "achieve the goals established by the 2025 Plan," raising the bar for what's possible across MSP.
Kuechle is similarly optimistic about Downtown East's — and the region's — future. “The next five to 10 years are going to be very exciting for Downtown East," he says, "and for MSP as a whole."

Brian Martucci is The Line's Innovation and Jobs News Editor.
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