St. Paul is betting on the Penfield to spur downtown renewal

St. Paul officially launched its huge bet to push revitalization downtown Thursday when Mayor Chris Coleman and others marked the opening of the $62 million Penfield project.

When it opens May 15, the project will include more than 250 high-end apartments and a Lunds grocery store.

City leaders originally envisioned the Penfield as a dazzling 33-story, $130 million condominium tower along Interstate 94 just south of the Capitol. But the crash of the housing market cut it to a 10-story apartment building, and the recession put the entire project in doubt.

But city officials said that if no one else would prove the viability of high-end rental housing — a key element of downtown revitalization — they'd do it themselves, with taxpayer help, if need be. As a result of a city loan the high-end apartment complex rose on the site.

"St. Paul is back folks," the mayor said at a ribbon cutting ceremony for the building, which the city now owns. "Today, we celebrate a huge milestone in that movement back to a very, very thriving, vibrant downtown."

Coleman said the effort was already showing signs of working, despite criticism of city government encroaching on the real estate business.

Private developers are renovating the landmark nearby Pioneer and Endicott buildings with 233 market-rate apartments. The same developer that built the Cobalt project in northeast Minneapolis is working to revive St. Paul's Depression-era, 17-story riverfront post office, also as high-end housing.

Developer Clint Blaiser, who is working on the Pioneer-Endicott project, said it is "going like gangbusters." He points to successes over at Galtier Plaza and a renovation at the Kellogg Square apartments, as further proof of a downtown comeback.

"I think that Lunds alone, just going into the Penfield is huge," Blaiser said. "People have been looking for a grocery store forever."

The 24th store in the Lunds/Byerly's chain will open in three months and feature a Caribou Coffee, Big Bowl Chinese takeout, a Bachmann floral stand and a dry cleaner.

Lunds general manager Mike McRae said there are finally signs that St. Paul is reaching a critical mass of residents to support the store. Nearby, light rail trains will start running a month after the doors open.

McRae said his grocery store is a sign that downtown is becoming something different: a real neighborhood.

"For us, the opening of a new store is much more than selling groceries," he said. "It signals the start of a deep relationship with neighborhood residents and businesses. I assure you our team of 75 employees is looking forward to becoming an integral part of this community for years to come."

That sold Kathy Blair, one of the first residents at the Penfield. A former state employee, she's been watching the project grow and after deciding downtown was finally a viable option, she rented a sixth-floor apartment.

"I know St. Paul, I like St. Paul. And I like being on the freeway, being close to heading north, heading south. The Lunds store is really great, and the light rail will be fun too, I think."

City officials say they think there's more to come, as well. The mayor said the Penfield's opening will help spur more redevelopment.

"The residents that are here are going to be out. They're going to be working in our city," Coleman said. "They're going to be going to restaurants and bars. They're going to create the kind of synergy and momentum that allows us to do even more things."

With a former county jail and the former West Publishing headquarters sitting vacant on the city's riverfront for years, there's still a lot of work to do. But Coleman has unbridled optimism.

"As we look to the future of Macy's, we get to point to the success of this project," he said of the Penfield development. "As we look to the opportunities at the West Publishing site, we get to show all of the things and all the investments we've made. We get to show the momentum and the excitement."

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