After riots, St. Paul's Midway works to turn blight to bright

Four nights after George Floyd died in the custody of Minneapolis police, four men were caught on camera breaking into the Enterprise Rent-A-Car building in St. Paul's Midway neighborhood. They set it on fire.

"It was a total loss," said building owner Paul Gonyea, founder of Gonyea Commercial Properties. "The roof collapsed. The inside walls collapsed. What remained had to be turned down."

The four men were caught by authorities. After delays, hiccups with hazardous debris removal and $800,000 in costs (some not covered by insurance), the building at 1161 University Av. is 85% rebuilt and due to open in March with Enterprise back in as the tenant.

"It's been more difficult than I would like," said Gonyea. "I'm in a hurry to finish this. My tenant wants to be there and they want to open as soon as they can. It's on the Green Line. It's a good spot."

The restored building, one of an estimated 280 buildings damaged during last spring's riots in St. Paul, is a welcome sign of progress for the hard-hit Midway area, a busy 4-mile commercial corridor that scoots along University Avenue — roughly from the State Capitol to Hwy. 280.

"The area took the brunt of the damage from the riots in St. Paul," Midway Chamber of Commerce Executive Director Chad Kulas told St. Paul Building Owners and Managers Association members during a recent Zoom call to update neighbors about recent improvements. "Piece by piece, we are collecting ourselves and opening up more and more of the Midway. It's hard to say things will be back to normal in two years," but there is progress.

Local developers such as Reuter Walton, Suntide Commercial Realty, Kraus-Anderson, Cornerstone Construction, Wellington Management Inc. and Gonyea among others have recently worked "the avenue," bulldozing or repairing damaged buildings, replacing broken windows and doors and snatching vacant lots for future development as offices or apartments.

About 12 projects are in the works, equaling hundreds of million of dollars in development. The recovery "is like after a wildfire, when you start to see vegetation arise from the damage. That's what is happening in Midway," Kulas said.

This week, Kraus-Anderson is demolishing the vacant U.S. Bank branch near Keys Cafe at University and Raymond avenues. The graffiti-covered building KA bought in December will make way for a $50 million apartment building with 220 units. Blocks east, a former boarded-up auto garage at 1835 University Av. was knocked down to prepare for affordable rental units.

Across from the Ax-Man Surplus store near University and Snelling avenues, a soon-to-open Bank of America bank branch has replaced the shuttered Pawn America. A little over a mile east, an office complex will replace the soon-to-be-razed Johnny Baby's bar at 981 University Av.

"For the neighborhood, we are well aware with daily reminders of what transpired [in May]. But I think there is overall a sense of hope," said Kate Mudge, director of the Hamline Midway Coalition. "We celebrate every time we see a really damaged building come down and get cleaned up or we hear about somebody managing to reopen."

Two new apartment buildings are being built a soccer ball kick away from Allianz Field soccer stadium on land that used to house a Bremer Bank and Furniture Barn. One mile east, Minneapolis-based Alatus LLC plans this summer to begin constructing a six-story $60 million apartment and retail complex near the White Castle at N. Lexington Parkway and University Avenue.

Last year's riots caused Alatus' "builders risk insurance" premium to triple for the 288-unit project to nearly $550,000, said Development Director Chris Osmundson. Insurers re-evaluated their risks for all Minneapolis and St. Paul construction in the wake of the riots.

Not all area projects are on track. The 34-acre Midway Shopping Center and Big Top Liquors near Allianz Field, burned and damaged by water in the riots, remain shut, awaiting demolition. But there's no word from the city or the shopping center's owners — Rick Birdoff and Minnesota United FC owner Bill McGuire — about when the site will be razed.

In 2016, the city approved a master plan for the site to eventually become an "urban village" of offices, apartments, a hotel and parking surrounding Allianz Field, home to Minnesota United. But the master plan lacks a timeline and hasn't been updated since May's fires, city officials said.

Through a spokesman, Birdoff and McGuire declined to comment for this article. Kulas said McGuire told his chamber in July the strip mall would be knocked down, but didn't say when.

Nicolle Goodman, director at St. Paul Planning and Economic Development, said the city doesn't know when work will begin. The city's biggest concern, she said, is that any redevelopment meet the community's needs and not price neighbors out of the area. "Redevelopment is great," she said. "But we need to do everything we can to ensure that the character and the identity of the area don't disappear."

Days after George Floyd's May 25 death, Suntide Principal Jeff Hart watched on TV as protesters gathered by the 1000 University Av. office his team bought and rehabbed 10 years ago. Some rioters spray-painted graffiti and then moved up the block.

Suntide scrubbed off the paint and looked for ways to uplift the neighborhood. They had already bought the building across the street — Johnny Baby's — a problematic bar at 981 University Av. Now was the time to knock it down to build nice offices. Demolition starts this spring. "We are trying to do our part and clean up the neighborhood," Hart said.

For University Avenue businesses, the 2020 riots were perhaps the most dramatic of a string of disruptions. They have endured years of light-rail construction that finally ended in 2014. Then Sears, Walmart, and Herberger's stores shut. The global pandemic and recession followed.

Then, in May, rioters torched the street's Enterprise car rental shop, the Sports Dome, Napa Auto Parts, Bole Ethiopian Cuisine's two restaurants and the Midway Shopping Center's Foot Locker, Game Stop and Big Top Liquors. Smoke and water damage wrecked the rest of the strip mall.

"What a whammy! If you survived University Avenue and all of that [2010-2014] light-rail construction, just to live for today? God help you!" said Twin Cities commercial real estate veteran Jim Durda, who now manages the City Center for Ryan Cos.

Setbacks aside, neighbors are encouraged by ripples of progress. Recently dozens of boards came off store windows. Last month a shuttered auto-repair shop near University and Fairview avenues came tumbling down, to be replaced by two affordable apartment buildings, projects worth $64 million. "That's fantastic," said Mudge.

The property held past lives as an Andy's Garage, Andy's Eat Now Diner and a secondhand store. Nothing stuck.

Developer Reuter Walton (RW) bought the site in November and bulldozed it. The St. Paul Housing and Redevelopment Authority approved $30 million in bonds while Bridgewater Bank, AFLCIO-HIT and Fannie Mae made loans. The state spent $330,000 to decontaminate the land.

This week, contractors plan to pour concrete footings for the apartment's coffee shop and underground parking. The project is RW's first on University Avenue.

"The Reuter Walton team is proud that we are able to bring these 243 much-needed affordable homes to the Hamline Midway neighborhood," said CEO Nick Walton.

More housing is coming. Friday, a wrecking ball readied to topple the vandalized former U.S. Bank branch that Kraus-Anderson bought at University and Raymond.

The $64 million effort is KA's latest on University. In March 2019, it paid $31 million for the Midway Marketplace by Hamline Avenue that includes the riot-damaged but restored Cub Foods, TJ Max, Dollar Tree, plus the nearby LA Fitness and shuttered Walmart.

KA has been mum about the future of the former Walmart store that shut in 2019.

"We don't have any redevelopment plans for the site at this time," said KA Senior Vice President Matt Alexander.

Dee DePass • 612-673-7725