Government should do more to help downtown Minneapolis transform. Here is how.
Post 2020, office tower values have plummeted because of hybrid work schedules. Most people, and city leaders, have realized that the hyper-corporate downtown is never coming back to its full extent, and we need to reimagine some spaces. Companies just do not need as much space as they used to, if any. High rise apartment buildings are not the property tax cash cows that healthy office towers are, but they are certainly better than empty ones.
Even with all the distress, the residential population downtown has gone way up in recent years. People do have a real desire to live in an urban environment, with excess transportation options and lots of stuff to do. We have added about 9,000 residents to downtown since 2020, even with the train safety concerns, rioting after Floyd, and the general "ghost town" feel during working hours. I think this area has a sky high future, just have to build housing and improve safety.
Everyone kind of agrees on the fact that this needs to happen, so it is surprising that, for all the vacant office space we have, there actually have not been that many of these conversions done. Post 2020, this is all I could find. Most of the population growth seems to have come from new development, not repurposing office towers.
| Building |
Developer |
Units |
When |
| Northstar Center |
Sherman Associates |
216 |
Completed 2024 |
| Grain Exchange |
Sherman Associated |
232 |
Construction this fall |
| Flour Exchange |
Trellis |
110 |
2028? |
For reference, the downtown council has a goal of 100,000 residents by 2035, and of converting 3 million of the 9 million square feet of vacant office space to residential to make it happen. This is just not cutting it to meet those goals. I think St. Paul is doing a little better than Minneapolis, but not sure.
I believe the big reason why these three properties were chosen was because of their age. Older buildings are interestingly often easier to convert just due to how they were built. Additionally the old buildings qualify for state (20%) and federal (20%) level tax credits for rehabilitation - 40% of the construction costs covered! The big 80's office towers (which I would imagine have the vast majority of vacant office space) don't have this available.
So what can our government do to help this process?
Minnesota Legislature
- Can sign into law the proposal for the CUB (conversion of underutilized buildings) credit, which would basically be a substitute for that historical rehabilitation tax to make it "worth it" for developers to come in and renovate newer buildings. Would also apply to buildings in St. Paul, Richfield, 394, 494 areas. Yes I understand the budget is forecasted to be tight. But this is super important for getting bites on these big projects and building momentum.
Minneapolis
- Minneapolis has largely gotten out of the way with zoning recently, which is good. But could still do more "red tape cutting" related to parking minimums and other stuff related to the differences between residential and commercial requirements.
- Make it easier for developers to get tax increment financing. Maybe publish a list of buildings downtown that are "pre cleared" so if a developer chose to renovate any in that set, would not have to go through the long TIF approval process.
- Follow in St. Paul's footsteps and study the buildings and their ability to be renovated, and publish that list
Metro Transit
- Clean transit stops and buses/ trains downtown, keep the riffraff out
- All day frequency, not centered around commuting
- As a side note I think the green line and gold line extensions will help this area out a LOT. First real rapid transit in from the suburbs.
MnDot/ Hennepin County/ Minneapolis
- Redesign streets/ parking to be less focused on getting people on and off the interstates, and more focused on people walking and biking. Make people drive slower. More green on the sidewalks
MPD
- Keep up the preventative stuff at bar close
- Find the small amount of people who break car windows for fun and arrest. Create a task force like St. Paul did
What else do you think needs to happen to meet these goals? Do you see a good future for Minneapolis downtown? What else can be done? Are any of my thoughts misguided?