Waterford Bay – Finance and Commerce

Apartments pitched for Island Station site

Finance and Commerce | William Morris | May 14, 2019

The onetime coal-burning plant at 380 Randolph Ave. was built in the 1920s but closed down in 1973. St. Paul River Walk LLC, an ownership group tied to Arizona businessman
Robert Graham, bought the 10-acre riverfront property in 2014 and tore down the power plant, with plans by local developer Jim Lavalle to build apartments, offices and some public
space on the site. By 2017, though, that project had fizzled.

Now a Chicago-area developer thinks it has the right plan for the site. Barrington, Illinoisbased Stoneleigh Cos. and its affiliate Waterford Residential have approached the city with
plans to build 240 to 250 market-rate apartments on the site. The $58 million Waterford Bay project goes before the city’s zoning committee May 23 to obtain a conditional use permit
for height, setbacks and other requests.

Key to Stoneleigh’s vision for the project is the location, vice president of development Ryan Swingruber said in an interview. The property is on the north bank of the Mississippi River,
just east of Shepard Road. The land to either side, including a peninsula creating a small river inlet to the east, is owned by Xcel Energy.

Stoneleigh hopes to tap into the existing bike and walking trails along Randolph and connect them to the river, and is in talks with Xcel to extend those connections onto the utility’s land, possibly even including a new kayak landing on the river inlet.

“Obviously we are building apartments, but we are cognizant of the surrounding area,” Swingruber said. “We’re hoping to create a public and private connection through our property to allow public access to the river and extending the biking and walking paths.”

Stoneleigh has had the land under contract since November, Swingruber said, and hopes to get the needed city approvals to close on the site in July. The timing is important because the property is slated for forfeiture to the state in August due to unpaid taxes of more than $342,000, according to Ramsey County records. Stoneleigh plans to remedy that during closing and hopes to begin remediating coal ash and other contaminants on the site before winter.

Golden Valley-based Benson-Orth is on deck as the contractor. Plans prepared by Minneapolis-based BKV Group depict a four-story building facing Randolph, stepped down to three stories facing the river. Parking and other amenity space would occupy a first-floor podium. Floors two, three and four would offer a unit mix heavily weighted toward studio, micro and smaller one-bedroom apartments, Swingruber said, with the goal to offer rents in the high $1,400s or low $1,500s.

In addition to the natural amenities and central location between downtown St. Paul and Minneapolis-St. Paul International Airport, the project has several big attractions, Swingruber said. One is the site’s location in an opportunity zone, a designation created in the 2017 federal tax law that offers investment incentives for development projects in low income communities. The second is a generally hot housing market with considerable unmet demand in St. Paul and the surrounding cities.

A third bonus is that St. Paul’s 2040 Comprehensive Plan update, which has yet to be ratified, is expected to impose new restrictions on development for at least a portion of the city’s riverfront, Swingruber said.

“We like the site due to the fact there’s going to be a limited amount of sites along the river. The [2040] plan is going to be revised to limit building along the river,” he said. “I look at the site as an opportunity to be one of the last to build something that’ll be increasingly more difficult.”

Swingruber noted, however, that Stoneleigh has worked with other stakeholders to respect the spirit of the proposed 2040 Plan changes. After conversations with the Friends of the Mississippi River, Stoneleigh agreed to a 100-foot waterfront setback rather than the 50-foot setback required under current code.

“We haven’t been greedy either in the number of units we want to do,” he said. “Current zoning affords us the opportunity to build up to 375.”

In March, the district council, West 7th/Fort Road Federation, voted to support the project at its proposed height, although board members noted in their letter to the city Planning Commission their concern about the district’s need for affordable housing. Still, the council wasn’t about to turn away a large market-rate project, federation Board President Dana DeMaster said in an interview.

“For us, a lot of the discussion in terms of the positives was increasing the number of housing units. There’s a shortage city- and metro-wide of housing units, and especially rental apartments,” she said. “Also right now, there’s no public access to that part of the river, so this will increase accessibility for people.”

Swingruber said Stoneleigh has spent more than eight months working with the district council and other stakeholders to ensure the project, the company’s first in Minnesota, will be a success.

“We’ve spent an incredible amount of time making sure we’re cognizant of everyone’s concerns and wants,” he said.