St. Paul leaders tout Lofts luxury apartments developed by the city downtown

When city officials promoted the Lofts at Farmers Market as a feasible project, some housing advocates and skeptical members of the St. Paul City Council balked. If the private sector wasn't interested in bankrolling a five-story, market-rate apartment building in the warehouse district, why should the city take the risk?

Council Member Dave Thune and others pressed the case that market studies showed downtown St. Paul as a popular place to live, and the upscale Lowertown building would be fully occupied within nine months of accepting leases.

In the end, they leased it out in three.

On Wednesday, June 6, Thune joined St. Paul Mayor Chris Coleman and Cecile Bedor, director of the city's Planning and Economic Development Department, in a ribbon-cutting for the Lofts project, which overlooks the popular St. Paul farmers market at 5th and Wall streets.

The 58-unit, $13 million apartment building represents a controversial break from tradition for St. Paul, which has previously focused much of its efforts downtown on building "workforce" housing for residents at modest incomes.

The luxury Lofts project hit a standstill in 2008 after developer Brian Sweeney fired general contractor Gerry Flannery, setting off a legal dispute over cost overruns. Amid a series of legal claims and counter-claims, the team abandoned the site mid-stream. City officials debated the issue and decided to develop it themselves using Build America bonds, federal stimulus support

"I almost can't believe that we're standing here," Thune told a crowd of onlookers at the ribbon-cutting, which occurred on the Lofts' second-story roof deck. Two years ago, he sat in on a legal settlement conference, wondering if the city should simply "fill the hole" left by the unfinished construction work. "It was below ground level at that point," he said.

St. Paul Mayor Chris Coleman called the Lofts a key part of his "Rebuild St. Paul" development initiative, which seeks to jumpstart a number of construction projects that fell by the wayside during the recession. He thanked Bedor for rescuing the Lofts "from the grave" on a number of occasions, and Bedor gave similar accolades to project manager Diane Nordquist.

Nearby, the city is taking a similar "hands on" approach in developing the long-delayed Penfield project, 254 units of upscale housing at 10th and Minnesota streets.

Legal wrangling over the Lofts continues. The Minnesota Court of Appeals recently ruled that the city should not have allowed general contractor Shaw Lundquist to adjust its sealed bid upward after discovering a mathematical error in its calculations. The judges said the city should declare the $8.04 million contract null and void, though it is unclear what impact that would have on the building, which is already occupied.

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St. Paul leaders tout Lofts luxury apartments developed by the city downtown