High-end Condo Projects Approved

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Posted on Thu, Mar. 23, 2006
High-end condo projects approved City signs off, but use of tax breaks still generating debate BY JASON HOPPIN Pioneer Press Anyone looking for high-end condos in St. Paul may soon have a lot more options to consider. The city's Housing and Redevelopment Authority approved two projects Wednesday that would bring 420 luxury apartments and $185 million in construction - some of it taxpayer funded - to downtown and the West Side. The $64 million WestSide Flats project would feature 116 condos in four buildings of five to six stories near the foot of the Wabasha Street Bridge. The condos, intended to spearhead a new riverside neighborhood, would sell for as much as $1 million. The other project, dubbed The Penfield, would create more than 300 upscale residences in a $121 million project at the site of the city's former police headquarters. The facade of the city's former Public Safety Building, at 10th and Minnesota streets, would be preserved. The project would include a 40-story tower and low-rise town houses. "They're exemplary projects that show how well a developer and a community can work together," said City Council Member Dave Thune, whose ward includes both projects. Although the HRA approved the projects, the debate has not ended. Each development would use tax breaks in the form of tax-increment financing, which use anticipated increases in property values to help fund development. Together the projects are expected to receive nearly $12 million in property tax breaks, spread out over many years, to help pay environmental cleanup, new roads and other infrastructure. Yet neither would provide affordable housing, commonly a requirement for tax-increment financing in St. Paul. WestSide Flats homes, for example, would start at $276,000. Even though a small portion of the WestSide Flats tax district funds would be set aside in an affordable housing trust fund, Community Stabilization Project director Caty Royce, an advocate of affordable housing, said there should be more of a public benefit. "These guys wouldn't be at the table unless we had leverage. We have leverage. Use it for the public good," Royce said. "Don't sell the store for nothing, for crumbs." Although she voted in favor of both projects, Council President Kathy Lantry said she was concerned that the city hasn't figured out how to pay for services for hundreds of new residents while their property taxes are being diverted away from city coffers to help fund development. "If doesn't pay for cops. It doesn't pay for firefighters, parks or libraries," Lantry said. WestSide Flats developer George Sherman said the project wouldn't be feasible without city help, explaining that too much land cleanup is needed. Crews are expected to start erecting the first building in July, with an opening of September 2007, Sherman said. The final building is expected to be finished by the end of 2010. Construction on The Penfield, built by developers Alatus Partners and Rutzick & Associates, could begin as early as November. Project manager Peter Brown said he was excited to move forward. "Our sense is that there's a real demand for this kind of project in St. Paul," he said. Both projects are highly anticipated by neighborhood groups. The WestSide Flats has been a decade in the making, and the final, scaled-down version (the original vision called for 12-story buildings) has earned the endorsement of the West Side Citizens Organization. The fate of its would-be neighbor, the colossal Bridges of Saint Paul project, is less certain. "Development is healthy for the West Side if it's done within the right parameters," said Jeff Bauer, the West Side neighborhood group's vice president. "They (developer Lander Group) did the community work they needed to do to make their plan a reality." St. Paul Riverfront Corp. executive director Patrick Seeb was also excited about the project. "We're very pleased with how it's going to fit into the river valley," Seeb said. "It's going to be the first olive out of the jar in getting the West Side Flats going."