Here's some history:
Paper: STAR TRIBUNE (Mpls.-St. Paul) Newspaper of the Twin Cities
Headline: Nicollet-Lake after 15 years: Is it a success - or a mess?
Date: 01/02/88
Section: NEWS
Page: 01A
Edition: METRO
Byline: Mike Kaszuba; Staff Writer
Graphic: PHOTO;MAP
Length: 33.0
Subject: minneapolis;neighborhood;development;analysis
Notes: SP03B
Slug: DEV02
Fifteen years ago, as the stores and homes in an eight-square-block
chunk of south Minneapolis continued to decay, city officials began one
of their most ambitious projects of the 1970s: Buy and clear 37 1/2
acres for a miniature version of Southdale in the heart of the city. The
original plans for the Nicollet-Lake Development District,
which encompassed the site of the old Nicollet Park baseball field,
were heady. Two enclosed shopping malls, connected possibly by a skyway
over Lake St., would be the centerpiece. Double-decked ramps would be
built to accommodate nearly a thousand cars. An entertainment center, with
a 48-lane bowling alley and
nightclub dancing, would occupy a nearby building with skyways over
Nicollet Av. and 1st Av. S. Now, five years behind an original timetable
and millions of
dollars in public money over early projections, the last piece of
vacant land is about to be developed. On the one hand, a new Highland
Superstore that opened in October has brought renewed optimism to
Nicollet-Lake. But in telling the story of the project, city officials
and landowners talk disappointedly of lowered expectations as they
explain why it turned out so differently. A White Castle sits on one corner
today. Prostitutes stroll along
Lake St. There are no enclosed malls. And the biggest store, a K mart,
came only after the city made a controversial decision to close off
Nicollet Av., one of the busiest streets in the city. While the stores and
housing that were eventually built at
Nicollet-Lake are successes in their own right, many officials still
talk of what might have been. "I suppose success, in my opinion, can
only be measured by what you set out to do," said John Cummings, the
city planner whose 1972 report envisioned the original design. "By
that standard, we missed." Cummings, the original project director, said he
was removed from
the job when visions gave way to reality in the mid-1970s. Of the
district today, he said: "I guess I try not to look at the wreckage.
Hodgepodge, that's a good word. Mess, I suppose, is (also) a good
word." Others, meanwhile, are less harsh. "They're finally going to
finish the Nicollet-Lake Development District, and it makes me feel
ecstatic," said Rita Fassbinder, the executive director of the Greater
Lake Street Area Council. "The concept was right. The city ended up
making changes . . . (but) K mart does a good business down there, and
they're providing a service." Added Sharon Sayles-Belton, the City Council
member whose Eighth
Ward includes part of Nicollet-Lake: "I am generally pleased with the
outcome. This product we have now is the culmination of a lot of
realities for what works as a development for this particular area. . .
. It's better than having vacant land." The story of Nicollet-Lake is
filled with shattered promise.
Marketing projections commissioned by the city, which initially
indicated that the area could support such a large development, were
found later to be overly optimistic. The city entered the project
confident that it could succeed without a commitment from a major
developer, and the 1974-75 economic recession drove away potential
builders. Although it had no major development commitments, the city began
buying and bulldozing buildings at Nicollet-Lake. But the move,
intended to make the land more attractive for development, only removed
the property from the tax rolls and left entire blocks of land vacant
for years. Even as Sen. Hubert Humphrey had an American flag flown over the
U.S. Capitol to commemorate the opening of a restaurant in the
district, the project was in trouble. In 1977, taxpayers in
Minneapolis paid $391,000 to support Nicollet-Lake, which was supposed
to be self-supporting, when there was not enough new development in
the district to generate the revenue needed to pay off bonds sold by
the city. Again in 1978, taxpayers had to pay an estimated $600,000 as
development lagged. "There was just too much of an overexpectation,"
said Norm Corson, a former city project manager at Nicollet-Lake. "It
really fell behind right from the start." Nicollet-Lake and the nine-block
Loring Park Development District
were the first of the tax-increment districts created in Minneapolis.
In the 15 years since, almost 35 more districts have been formed. Used
largely as a way to encourage redevelopment in blighted areas, the
districts became a key financing tool in the 1970s and enabled the city
to buy and clear large tracts of land to make them attractive to
developers. The concept was novel: After a district was designated, the
assessed value of all its property was frozen. The city then sold
bonds to buy, clear and prepare the land. When a developer bought the
land, the difference between the assessed value before it was developed
and its value afterward was its "incremental value." Taxes paid on the
frozen assessed value continued to be paid to the city. Taxes paid on
the "incremental value" were used to retire the bonds. While Nicollet-Lake
and Loring Park were the first tax-increment
districts, they also were the only districts the city had to levy
property taxes to support. Loring Park, with a development plan
designed to lure people back to living downtown, eventually saw its
fortunes change with such successful projects as 1200 On The Mall and
Greenway Gables. "(Everybody said) Nicollet-Lake was a far surer bet than
that
downtown housing stuff," remembered Tommy Thompson, the former city
coordinator and a proponent of the original planning at Nicollet-Lake.
Of those early plans, he said: "Most people were optimistic that this
was within the realm of possibility. . . . (In hindsight,) it was
probably not feasible." When K mart opened in March 1978 and Nicollet Av.
was closed, the
shape of Nicollet-Lake slowly began to be fashioned by market reality
instead of a planner's design. A Super Valu supermarket relocated next
to K mart. The post office opened a new station on a 1.9-acre site.
Eighty-nine townhouses, known as Findley Place, were built. Ted Glasrud &
Associates Inc., which among other things built 1200
On The Mall, built the 128-unit Park Square Condominiums at
Nicollet-Lake. In-Town-On-Lake, another 72-condominium Glasrud
project, opened nearby in 1982. But a second phase of In-Town-On-Lake,
even though its footings were already poured, collapsed financially. Said
Glasrud of Nicollet-Lake: "The (city) wanted me to do it.
That area had been standing there for a number of years. It went
better than I expected it would . . . I was very skeptical. They had
grandiose ideas, which were not in reality whatsoever." The public
investment at Nicollet-Lake, originally projected at $7
million, grew to $12.7 million. The outstanding bond indebtedness for
the project as of 1984, when the city merged the project's indebtedness
with that of other more successful districts to make it easier to
support financially, stood at $16.8 million. Interest on the
indebtedness totaled $5.7 million. "It's not the way you visualize it in
the beginning," said Tom
Ogdahl, a former City Council member from the 1970s, whose Eighth Ward
included Nicollet-Lake. "An in-city Dale, absolutely, that's what they
were after." Vantage Properties Inc., a Dallas-based developer, built a
Highland Superstore at Nicollet-Lake two months ago, and plans to open
a small shopping center on the last piece of vacant land in the
district by August. "If we could put some more land together down
there, we have some other players . . . that would like to try it,"
said Tom Roberts, a Vantage Properties official. "It's a good retail
area." But to Tom McNamee, a former restaurant owner at Nicollet-Lake,
the opportunity has come and gone. "(The city) was always telling the
neighborhood, `We have nice, big plans, a skyway . . . '," he said.
"They (said they) had a master plan."
Steve Brandt
Staff writer
Star Tribune
Phone: 612-673-4438
Fax: 612-673-4359
425 Portland Av.
Minneapolis, MN 55488
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