As Lake Street rebuilds, some property owners see housing as best bet

Images of a nearly completed six-story apartment building reduced to rubble by flames became one of the lasting depictions of devastation that engulfed the Twin Cities during the riots that followed the murder of George Floyd.

The morning after the fire, with ashes still smoldering, the developer of the 189-unit building vowed to rebuild. And now, a year later David Wellington and his construction team have just celebrated a milestone: A new building, renamed Everlake, is closer to welcoming residents than the one that burned.

"It was a momentous occasion," said Wellington, CEO of Wellington Management. "Everybody, collectively, is breathing a sigh of relief."

The $37 million project was one of the single biggest financial losses during the unrest, but also the most significant loss of housing along the Lake Street corridor. In the days and weeks that followed the unrest, many families were forced to relocate, though the vast majority of the damage was to commercial buildings that didn't include housing. Still, as community leaders ponder the future of dozens of vacant sites and shuttered buildings, they are putting a high priority on creating more housing than existed before, especially for low-income families.

"It's difficult to deliver affordability, but the neighborhood associations have been very loud and clear that they want to sustain a robust supply of affordable housing choices," said Russ Adams, manager of corridor recovery initiatives for the Lake Street Council.

Before the unrest, the Minneapolis and St. Paul neighborhoods that flank the areas most hurt in the riots were already targeted by developers of market-rate rental housing that's unaffordable to many of the families that live and work there.

"Nobody is asking for more of that," said Melanie Majors, executive director of the Longfellow Community Council.

Majors said the Longfellow council has a racial equity work group that is focused on housing, particularly for families not well suited to the kinds of smaller apartments that have typically been built in the area.

Post-riots, there's even more pressure on community organizers to make sure that key sites are controlled by entities that will add the kind of housing that's most needed. "It's open season for prospectors," Majors said.

So far, Wells Fargo said it would build a 200-plus unit apartment building at Lake Street and Nicollet Avenue. The $50 million-plus project will be developed by Project for Pride in Living. Neighborhood Development Center plans to build a $15 million to $30 million mixed-use project at the corner of Chicago Avenue and E. Lake Street.

Adams said adding housing will require new approaches to design and financing. "We need to start seeing state and fed authorities step up," he said.

Wellington, the Everlake developer, credits the team that was already involved with the project with helping him quickly start the rebuild. That includes Watson-Forsberg, the general contractor, and the suppliers that honored previous pricing agreements. "They effectively held pricing from the original build, which was an amazing gift," said Wellington. "It was a clear signal that they wanted to do their part."

Jim Buchta • 612-673-7376