Urban Village: Leading the Way for Corridor Redevelopment

A stone’s throw from Lyndale Avenue and Lake Street lies the site of a three block 220-unit housing project that represents the future of urban housing development. Adjacent to the Greenway and reinforcing its north-south crossroads, the Urban Village project is focused on building transit-oriented development that supports higher density housing and attracts a variety of incomes.

Laying the Foundation
The concept of Urban Village was conceived as part of an extensive community-based planning project headed by Council Member Lisa McDonald that identified the three block area along 29th Street, between Aldrich and Dupont Avenues, as a significant opportunity for residential development. “These three blocks were currently being underutilized and represented poor land use with immense potential,” recalls McDonald. “The possibility of redeveloping this land presented the opportunity to increase the value of the property, but more importantly, to develop an urban housing design that would revolutionize the Midtown Greenway.”

Caren Dewar of Dewar and Associates was brought in as a development consultant who, upon the creation of the Midtown Community Works Partnership, was asked to guide management of the project. “Early on, the design team wanted a variety of building types and architectural styles, so three different developers were hired to work on the project,” Dewar said. “This was a path breaking opportunity and our vision was of a neighborhood, not a project.”

The stage was set and the vision was clear. The Urban Village project was quickly becoming a top development priority of the MCW Partnership, though the project was facing considerable hurdles. “The project presents unusual challenges,” Dewar recognized. “Special care and strong support will be necessary in relocating the businesses that currently occupy land on the site.” 

The Capital Investment Fund
Even though developers were to pay market value, the cost of facilitating all of the necessary preliminary steps exceeded the value of the property and presented a substantial obstacle. The redeveloped land would eventually be mixed income property of high architectural quality and property values were all but assured to increase, but the cost of clearing and acquisition of the land was due upon the commencement of development. The City of Minneapolis approved a redevelopment district for the project thus providing tax increment financing for the land assembly activities, including acquisition, relocation of existing property owners, demolition and site improvement. However, the City will not issue bonds to be repaid with the tax increment proceeds until construction of the project is fully underway. This presented a financing gap that would require “bridge” funding to get the project from development plans to actual construction.

To address this need, the MCW Partnership Finance and Land Assembly Committee, chaired by Wells Fargo Chairman and C.E.O. Jim Campbell, developed the Capital Investment Fund. Under Campbell’s leadership, the Committee undertook the incredible effort of raising $8 million in investments from both public and private sources. Investors will be repaid in 3-4 years once the City’s bonds are sold, or allow their investment to be utilized for subsequent projects. Mayor Sharon Sayles Belton believes that this Capital Investment Fund represents an investment-funding prototype that can be replicated throughout the Corridor. “I am grateful to Jim Campbell for his leadership,” she noted. “This is a great example of true public-private partnership.” 

Looking Forward to the Future
Upon its completion, Urban Village will be a role model for urban housing development in the new millennium. Facing the Greenway, Urban Village provides a view to the park amenities and walking paths outside one’s front door while inviting neighborhood residents to partake in all the Greenway has to offer. The multi-modal transit connections, including the future link of LRT to the airport and the Mall of America, present the opportunity for people to live a quality lifestyle independent of auto transportation. 

“Urban Village exemplifies Smart Growth,” said Met Council Chair Ted Mondale. "It provides more choices in where people live, and how they move around, with access to transit options. Urban Village is a great project, due largely to the work of an amazing public-private partnership." 

The Urban Village project is a truly dynamic model of visionary development coupled with innovative and unconventional investment funding. It serves as the blueprint project leading the way for development throughout the Corridor and represents all that is possible to come.