St. Paul prepares for land grab along Central Corridor route

The city of St. Paul is positioning itself for an expected land rush in the neighborhoods bordering the proposed Central Corridor transit line.

Completion of the nearly billion-dollar light-rail project on University Avenue is more than four years away, and there's no sign yet that developers are racing to build luxury condos there. But affordable-housing activists warn that day may come, and say it's up to the city to protect the character of the neighborhoods.

One of the ideas on the table is called "land banking" -- buying land now while it's relatively cheap, in order to control future development.

It's hard to imagine the corner of University and Victoria ever becoming hip. The mom-and-pop Best Steakhouse is just a few doors down from Tai Hoa, an Asian barbecue that hangs roast duck on hooks in the window. Across the street, nonprofit offices and a Car-X add to the unlikely mishmash.

But that's just how resident Metric Giles likes it.

"You can see the activity here," Giles said. "It's the center of the community -- very diverse, economically very diverse, with the different businesses and services. This represents what we'd like to extend to the greater community."

Giles is an organizer with the nonprofit Community Stabilization Project. For nearly two decades, he's lived in a house about a block away, right on the avenue -- which wasn't anything close to an urban wonk's dream.

"At that time, the city told me it wasn't interested in residential development on University Avenue," he said. "Since then, that has totally changed."

Now, Giles is working on community efforts to get ahead of escalating land values along the corridor. He's heading up a working group along with Tim Thompson, president of the Housing Preservation Project.

Thompson said once light-rail is built, there's going to be huge demand for housing because people will want to live close to the trains. He said that demand is going to drive up property values, and drive out renters and low-income residents.

"That would mean the most transit-dependent, lower-income households won't have the same access to transit as others do," Thompson said. "We want to make sure there's room for all levels of income directly on the corridor."

Thomspon wants the city, or a nonprofit land bank, to begin assembling land and buying foreclosed properties now, and attach restrictions to make sure future development includes low-cost housing. One land bank -- with the nonprofit Family Housing Fund -- has already formed.

Activists are also pushing for city zoning that would require developers to include affordable housing in their plans in exchange for allowing them to build denser projects. The city currently requires developers to build affordable units if they are seeking financial assistance.

"But we have to be concerned about the day when private developers don't need a thing from the city," Thompson said. "How do we ensure they are doing their share?"

City officials are embracing many, but not all, of the suggestions. Land banking is one that's gaining traction.

"Intuitively, that's so obvious to people: It's important to get land at the lowest possible cost, and then we'll be in the driver's seat," Nancy Homans, Mayor Chris Coleman's policy director, said.

Homans said the city has begun scouting parcels along the corridor, and recently received a $2 million loan from the state to get the thing started. Homans said the city is committed to keeping people who rely on transit in the neighborhoods.

She said the city is lucky in at least one way: Land is cheap.

"We have sort of the serendipity of a lousy market at just the right time, which isn't good for anything but for getting ahead of a big change like this," Homans said.

Still, the city is facing a projected $20 million gap that the mayor has proposed recommended cutting expenses and raising taxes to resolve.

Yet city planners believe there's a market for up to 14,000 new housing units along the transit line, which includes the University Avenue area as well as downtown. After all, the Hiawatha line in Minneapolis became a magnet for new living spaces.

But while Homans supports affordable housing, she's cautious when it comes to creating new laws that mandate it.

Paul Sween, a principal with Plymouth-based Dominium, agrees. The company developed the popular Carleton Artist Lofts on University Avenue, an affordable housing project. Sween said overregulation can stifle growth.

"Most people would feel that development will occur most quickly when there is the least amount of restrictions," Sween said. "Any restrictions imposed on the landowners is going to slow development to some degree."

Sween said the banking crisis is creating challenges for builders, making any kind of land rush on University Avenue hard for him to imagine -- at least for now.

What: Forum on housing planning along the Central Corridor

When: Friday, September 18 at 12:00 p.m.

Where: University of Minnesota, Honeywell Auditorium, Carlson School of Management (L-110)

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