Market-condo plan revived

Posted on Tue, Jan. 09, 2007

Ex-city official suggests smaller, less-pricey units for Lowertown
BY GITA SITARAMIAH
Pioneer Press

Developers have dropped their plans for a downtown St. Paul indoor farmers' market topped with condos because of the housing slowdown. Now, a former city official is stepping in with his own proposal.

Brian Sweeney, who was St. Paul's economic development director under then-Mayor Norm Coleman, plans to ask the city's Housing and Redevelopment Authority on Wednesday for development rights and the land to build a five-story building that will feature a main-level indoor farmers' market and four floors of condos. Final approval from the full City Council will be needed.

Despite the glut of condos for sale, Sweeney believes he can make a go of the $13.5 million project by offering smaller units at prices between $159,000 to $259,000. "We want to be very sensitive to this softer market and at the same time move this forward," Sweeney said.

Sweeney's proposal requests $3.8 million in city money for construction as well as for build-out costs by the St. Paul Growers Association, which eventually would operate the market. Sweeney's plan calls for a 15,000-square-foot market, 48 condos at about 1,000 square feet each and 42 spaces of underground parking. There are four more condos in his proposal than in the previous plan. Construction would start in May and be completed a year later.

Development of a farmers' market in downtown's Lowertown neighborhood has faced one delay after another in the last few years. Developers Michael Lander and George Sherman, who had teamed up for the earlier project, waited as the city acquired the site at the southwest corner of Fifth and Wall streets. Meanwhile, the developers started to feel uncomfortable last year putting up more condos when they still have other units for sale, Lander said.

The decision by Lander and Sherman to walk away from the farmers' market project comes amid a slowing housing market. Twin Cities home sales fell 23 percent in November from a year earlier in the 13-county metro area and median selling prices had slipped slightly as well. Residential building permits dropped 26 percent year-to-date through November, the latest data available.

The developer of another key downtown project, the 300-plus-unit Penfield high-rise, also has felt the effects of a slowdown. That project remains in the works for this year, though construction won't start in spring as planned, said Peter Brown, a project manager for Alatus Partners. Construction will start after 150 units are reserved and the developer has about half that many reservations so far.

City officials and real estate observers, though, say the lower price point of the one- and one-plus bedroom units under Sweeney's Lowertown development plan should have appeal. "We're still seeing the movement in the market for units under $250,000," said Mary Bujold, president of Maxfield Research in Minneapolis.

The city sought interest from other developers for the project when Lander and Sherman expressed concern about starting construction this spring, said Al Carlson of the city's planning and economic development department.

Sweeney came forward in the last few months with his proposal, which he said will have the feel of Seattle's Pike Place Market, only smaller.

Under Sweeney's proposal, the deed for the indoor farmers' market eventually would be turned over to the city. "I think Mr. Sweeney has got some good ideas and hopefully we're headed down a successful path this time," said Jim Sipe, a Growers Association board member.

The indoor market is to serve as an extension of the outdoor St. Paul Farmers' Market, which runs from April to Christmas across the street in Lowertown. Products sold indoors might include jams and pies made with Minnesota-grown strawberries and similar items, Sipe said. The space also may be used for a cafe, cooking classes, weddings and other events, depending on demand.

"The idea is to design a market hall that's flexible enough to accommodate different uses," Sipe said.

Sweeney will face something of a role reversal as he embarks on his first solo development project with the city.

He was the city's economic development director from 1998 to 2002. Before that, he'd served in management and public affairs positions for corporations, nonprofits and government in Madison, Wis., Washington, D.C., and the Twin Cities, where he's lived for 17 years. While at the city, Sweeney was directly involved in housing projects such as the riverfront Upper Landing and the emergence of a new wave of downtown condos in downtown.

Afterward, he was president of Frauenshuh Sweeney, the multifamily division of developer Frauenshuh Cos. There, Sweeney was active in building the Terra Springs condos on the former site of the Territorial prison in Stillwater and the Wakota on Fourth condos in South St. Paul.

Sweeney recently went solo as a developer and said he's committed to working on the indoor farmers' market project daily until it's standing. "This is going to be my main project for the next 18 months," he said. "I will be personally present."