Divided St. Paul City Council rejects development on vacant lot

A divided St. Paul City Council voted Wednesday to reject a developer's efforts to build a 288-unit apartment complex on a long-vacant lot near the Green Line along University Avenue.

Minneapolis-based Alatus appealed an earlier decision by the city's Planning Commission, which said the project's site plan was not in keeping with city goals for affordable housing. It also said its design wouldn't fit in with the surrounding neighborhood.

Area residents and advocates for affordable housing had lobbied council members for weeks to deny the appeal, saying the project would lead to further gentrification in the area and force people out of one of the city's poorest neighborhoods.

"I consider this vote historic and I think this is what true equity really looks like," said Danielle Swift, an organizer who fights displacement for the Frogtown Neighborhood Association.

Even though Alatus had agreed to make half the project's apartments affordable to people earning up to 60% of area's median income, opponents said it would still be out of reach for many area residents. They also worried that it would drive up taxes and rents on other properties in the area.

Chris Osmundson, Alatus' director of development, said the council's 4-3 vote will dampen developers' desire to build in the Capital City.

"The Council absolutely erred in their affirmation of the previous erroneous findings and failed to approve a totally unsubsidized mixed-income housing project with 60% and 50% AMI rental rates committed to in the public record, on a 10-year vacant parcel of land with no other development proposals," he wrote in an e-mail to the Star Tribune. "There was a year of engagement with all applicable District Councils which resulted in various letters of support from community stakeholders. It is tremendously disheartening and will certainly chill proposed development in the City of St. Paul going forward."

Council Members Dai Thao, Mitra Jalali, Jane Prince and Nelsie Yang voted to deny the appeal. Rebecca Noecker, Amy Brendmoen and Chris Tolbert voted in favor of the project moving forward.

Noecker said she supports building more affordable housing. But she said she doesn't believe the city can legally justify denying a project that needed no variances and sought no financial subsidy.

The $60 million project would have been built on land owned by the Amherst H. Wilder Foundation, but faced strong community headwinds almost from the start. Just a mile east of Allianz Field and in an area city officials hope to continue filling with new development, the project for some reawakened echoes of when Interstate 94 displaced thousands from the old Rondo neighborhood.

Supporters disputed the comparison, saying the Alatus project was being built on lots that have housed only giant snow piles for more than a decade.

Neighborhood leaders have criticized Wilder for not demanding more affordable units. Alatus had announced that it would make 124 efficiency units affordable to renters making 60% of area median income and another 20 units affordable for those making 50% area median income.

That wasn't enough for opponents, who pointed out that few in Frogtown, at least, could afford that. According to the Minnesota Housing Partnership, Twin Cities-area median income in 2016 was more than $85,000 for a family of four. In St. Paul, it was just over $64,000. And in Frogtown, median income is less than $40,000, according to Minnesota Compass.

Swift said housing advocates hope to approach Wilder officials soon to discuss the future of the site.

"We have an opportunity to explore what better options could look like," she said. "This decision shows we have representatives who are listening to community members who are impacted the most."

James Walsh • 612-673-7428