Prospect Park gets its biggest commercial development yet, an apartment-retail complex

A former ice cream factory along a gritty rail corridor on the edge of Minneapolis is now the site of one of the city's biggest mixed-use commercial projects.

Construction started this week on Rise at Prospect Park, a 530,000-square-foot, mixed-use development. It will have 336 apartments in a 13-story tower atop a Fresh Thyme grocery store in the Prospect Park neighborhood. The grocery will be the first in the neighborhood.

J.J. Smith, chief operating officer of CA Ventures said the target market for the project is students, University of Minnesota employees, young professionals and empty nesters. The apartment tower will have a variety of unit sizes and an amenity package that spans a full range of business, social and fitness interests.

"This community is so much more than just a place to live," Smith said. "It represents a lifestyle that marries high-end residential living with outstanding on-site and neighborhood amenities, a unique combination for this fast-evolving enclave of Minneapolis."

The project replaces a long-shuttered Kemp's ice cream factory at 2929 University Av. SE.

Harlem Irving of Chicago is partnering with CA Residential, the multifamily investment and development division of Chicago-based CA Ventures, and New York-based Square Mile Capital on the project. Financing was arranged by JLL's Capital Markets Group, and it was designed by Richfield-based Tushie Montgomery Architects.

Dick Poppele, a volunteer with the Prospect Park 2020, a nonprofit community development corporation, and the Prospect Park Association, said the neighborhood has been supportive of the project.

"We were quite happy about it," he said. "The property owner went out of his way to find a use that we'd been asking for."

Those needs included the kinds of services that had been displaced by student housing that was being built on the nearby University of Minnesota campus. But those services, including a grocery store, hardware store and others, couldn't be developed until there were more people living in the area to support such businesses.

"This [project] does both," Poppele said. "It brings more density and more commercial."

Smith said the scale of the project was largely dictated by its proximity to the Green Line light rail station at Prospect Park, which puts residents 20 to 25 minutes from both downtown Minneapolis and St. Paul. The University of Minnesota campus is a five-minute train ride.

The Green Line has been a catalyst for dozens of mixed-use projects that will bring more than 1,000 rentals to the area. Mary Bujold of Maxfield Research said there are a number of underutilized sites in the area, "and with the opening of the Green Line, many of those sites become more attractive to developers," she said.

Dominium just purchased the old Weyerhaeuser site south of Franklin Avenue, where it plans to build 600 to 700 luxury apartments plus affordable senior units in several phases. Exeter is building the second phase of its Carlton Lofts project near Randolph and University avenues. And Flaherty and Collins are building 248 income-restricted and market-rate apartments at 2700 University Avenue.

Harbor Bay Real Estate Advisors are also progressing with plans to build a 431-unit apartment tower on the East Bank campus. Smith said that given the number of units that are coming online, and the size of his project, he expects it to take two years after completion before the building is fully occupied. The low-rise portion of the project is expected to be completed in spring 2018 and the high-rise portion in fall 2018, so the leasing process will be staggered.

Rise at Prospect Park is CA Ventures' first residential project in the Twin Cities, but not the company's first investment in the metro. In 2013, the company acquired the Plymouth Office Tower, also known as 505 Waterford, a distinctive, 12-story office building at the intersection of Hwys. 55 and 169 in Plymouth.

CA Ventures, however, is no stranger to multifamily development. The company has developed 16,000 rental units across the U.S. during the past eight years and now has a significant presence in Chicago, Milwaukee, St. Louis, Madison, Wis., and Ann Arbor, Mich. Smith said the company is actively seeking development opportunities throughout the Midwest, including markets such as Des Moines and Kansas City, Mo., where there is strong demand for luxury rentals.

The project is part of an innovative experiment aimed at engaging property owners and neighbors in an effort to manage stormwater and help create more community in the process. The Rise at Prospect Park developers are among several who are participating in a shared private stormwater facility that is under construction in the neighborhood.

The Towerside District stormwater system will capture storm runoff draining from a roughly four-block area next to the Prospect Park light rail station, near the University of Minnesota. The first-of-its-kind system will remove stormwater pollutants, create a privately owned green space and provide an opportunity to reuse captured stormwater for irrigation and other industrial uses.

Harlem Irving and several adjacent private developers — Aeon, Cornerstone and Prospect Park Properties — signed a voluntary agreement with the Mississippi Watershed Management Organization to manage an estimated 4.5 million gallons of stormwater runoff jointly rather than through individual systems.

In a statement, Sarah Harris, chairwoman of the Prospect North Partnership, the organization behind Towerside and the leaders of the vision, said the project is expected to go live in November.

"This stormwater system is exciting because of what it will do for the long-term resilience of our community," she said. "As the first of many district systems, it is a tangible display of what is being accomplished because of the determination and visionary work of the Towerside stakeholders."

Jim Buchta • 612-673-7376