On October 6, 2014, Greater Saint Paul BOMA hosted a panel discussion at a member meeting. The panel was moderated by Fred Melo from the Pioneer Press, and included; Matt Rauenhorst and Nick Murnane from Opus, Mary Bujold from Maxfield Research, and Alicia Hinze from the Buttered Tin. The panelists discussed a variety of topics related to downtown St. Paul development.
BOMA reported on DataSource that downtown St. Paul has seen a 62% growth in residential population since 2010, Ms. Bujold, provided some background on the demographics of this increase. “Downtown St. Paul residents, like Minneapolis, used to be made up of mostly young people looking for an urban lifestyle,” she said. “But they wouldn’t stay long, and thus there was a fair amount of churning in the downtown population. Today it is much more stable. Young people are putting down roots. There is also an influx of baby boomers, and together these groups make up most of the growth in the urban core.”
Ms. Hinze, noted that she is a downtown resident, and this is why she decided to open the Buttered Tin. “I love breakfast and pastries, and after living here for 8 years, knew there were limited options,” she said. “So I did something about it. It was a risk, but the response has been phenomenal. I knew we would be successful, but didn’t expect the level of support and interest we’ve had so far.” She noted that the downtown area has many other niche needs for retailers to fill and is encouraging entrepreneurs to invest in this area.
The Opus development on the Seven Corners Hardware and church sites has drawn much attention. The mixed use project could include 150 – 200 residential units, a 150 room, limited service hotel, and 11,500 sq. ft. of retail space. The residential component will be highly amenitized. Demolition of existing structures will start by the end of the year with ground breaking in the spring of 2015 and the opening in 2016.
Mr. Melo asked the panel about the risk of over-saturation given all the projects that have recently entered the market and those under construction or in the planning stages. Ms. Bujold commented that the Minneapolis market is already beginning to show some signs of softening with a slight rise in vacancies, which follows a larger national trend. “St. Paul will follow suit, but it may have a three year window before it softens.”
Mr. Rauenhorst added, “St. Paul hasn’t built as aggressively as Minneapolis, so it may have more room for additional growth before a slow down.”
Retail activity was a common theme of the meeting with pre-panel presenters, Aaron Barnard from Cushman & Wakefield/Northmarq and Rob Clapp from Summit Group/KW Commercial, discussing how retail growth will follow residential expansion, and the range of new retailers in the CBD. Mr. Murnane indicated that service retail many times will develop first and grocers tend to be early entrants to a growing area. Reflecting on the influx of new downtown residents and its impact on retail growth, Ms. Bujold said, “Densities are close to where retailers will want to take the leap.”