Developers of a long-proposed 40-story condominium tower in Marcy-Holmes have canceled the development to look into possible rental units instead.
The project's developer, Alatus, LLC, announced the cancellation of its Alia condos earlier this fall amid similar housing proposals popping up in Minneapolis over the past couple of years. The next steps for the project, originally proposed in early 2016, include solidifying plans to repurpose the building into possible rental units, developers said. Plans will be decided by the end of the year.
Bob Lux, founder and principal for Alatus, said he was “extraordinarily sad” to see the condominium project bust.
“We love the site … You don’t get a site like that very often,” he said. “We want to build something really nice.”
The residential rental tower, located at 200 Central Ave. SE., would have a similar look to the original design for the condos, Lux said. The design would also be complementary to other large-scale rental towers in the area that have emerged in the past few years like the Expo or Rafter apartments.
Neighbors for East Bank Livability filed a lawsuit in fall 2016 against the developer and City for approving the building’s size. It was later denied by the Minnesota Court of Appeals.
But the lawsuit did put plans on hold, even though the project received a letter of approval from the Marcy-Holmes Neighborhood Association, Lux said.
Two condominium projects nearby have also been proposed since the lawsuit was filed: Eleven on the River and Four Seasons. Lux said when he proposed the project years ago, his tower was the only one.
Originally offering 214 units, Alatus told the Minnesota Daily in 2016 condo prices would have ranged from $300,000 to more than $3 million.
Marcy-Holmes community members say there is a prospective market for condos in the area, even with more being built nearby. Ward 3 City Council member Steve Fletcher said condos provide opportunities for housing ownership much needed for the neighborhood, granted the price is not too high.
“There is not enough ownership opportunity in the city, so condos are selling very quickly,” he said. “A lot of housing is getting built that’s too expensive for people in Minneapolis … There are a lot of people interested in buying a condo if they could afford it.”
Twin Cities condos have increased in price by 9.8 percent since last year, according to September data by the Minnesota Property Group. Condos also makeup 2.3 percent of the housing inventory in the Twin Cities as of September.
Marcus Mills, a Marcy-Holmes resident, said he has been supportive of the project since it was first proposed.
He also said condos are good for Minneapolis if they are not too expensive, but still likes the prospect of rental units.
“People in the neighborhood have been saying the market is drying up … and it hasn’t done so, “ Mills said. “Condo or rental property … I think [the tower] would fill in Marcy-Holmes and I think it would fill quickly.”