Big Developers, Big Business, Big Southwest Agree on Mpls 2040

The Star Tribune got big local developer Kelly Doran to talk about Minneapolis 2040, a plan that would allow more housing across all parts of the city. Doran said 2040 was “silly,” and that triplexes won’t turn him a profit. He even sees it as a threat to neighborhood character.

It’s funny because Doran is constructing a five-story building very near to my home (the pile-driving is still ringing in my ears!). Now, personally I’m glad for the additional housing. I couldn’t be happier about the grocery store in the new building. But while we’re on the subject of neighborhood character, Doran’s building takes up a third of a block. It has two levels of underground parking. And I’m sure you can imagine the large volume of complaints about how it would destroy neighborhood character.

Aldi 26th And Lyndale

Doran’s building at 26th and Lyndale.

I don’t know where Kelly Doran lives, but if he’s worried about triplexes destroying neighborhood character in the swankier parts of Minneapolis, why does he think it’s ok to dig a two-story parking pit in the ground and top it off with five-stories of apartments in my part of the city? Because he’s doing it in Whittier?

It’s some weird millionaire logic to think a triplex is too much to bear in Southwest Minneapolis, but Whittier is just fine for 100-unit apartment buildings. Minneapolis desperately needs more homes; neighborhoods in certain parts of the city shouldn’t just get to opt out of accommodating even a small number of those homes.

Doran isn’t an outlier. A recent article in a local business magazine included the perspectives of a bunch of developers and realtors, along with the usual crowd of Southwest Minneapolis homeowners:

It isn’t just single-family homeowners who have concerns about the new comp plan. Behind the scenes this spring, the Minneapolis Downtown Council business group helped organize Building Minneapolis Together, a group of about two dozen for-profit and nonprofit developers. Building Minneapolis Together has not been issuing public proclamations or handing out lawn signs. The developers involved with the group aren’t giving much thought to fourplexes, either.

Basically: Fourplexes aren’t for us. We don’t build them. We don’t live in them. We don’t sell them. We can’t make money from them. Why bother?

I should note that some of the business community opposition to the 2040 plan is driven by hostility to inclusionary zoning (I admit that I’m also somewhat worried about this policy).

Though the TC Business magazine article is completely one-sided, the photographs are nice: Steve Cramer of the Downtown Council pointing triumphantly at a large building under construction downtown; and an iconic photo of a prominent Southwest Minneapolis millionaire clutching her apocalyptic yard sign.

The coalition that’s formed against Minneapolis 2040 is very similar to the coalition that lost last year’s election — an election that flipped the council’s most vocal 2040 opponents, Lisa Goodman and Linea Palmisano, into the minority. And this really shouldn’t be surprising. The city council faction that will provide the decisive votes to pass the 2040 plan are the same council members who had $275,000 in corporate PAC money spent against them by a familiar cast of business and developer interests in 2017 (among them Doran, Steve Minn, and the Downtown Council).

The two big lies of the 2040 debate are (1) it will cause the bulldozing of neighborhoods and (2) that developers have bought the process. The reality is:

  1. Bulldozing is already happening with great frequency in Southwest Minneapolis, and because these neighborhoods are largely zoned single-family, all we get are ever-larger single-family homes. Fun story that I’ll never get tired of: the millionaire threatening to sue the city over this, bulldozed his home in 2007 so that he could live in a larger single-family home.
  2. Big developers, the business community, and people in big expensive single-family homes all agree that the status quo is working just fine and that the Minneapolis 2040 plan is no good.

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16 Responses to Big Developers, Big Business, Big Southwest Agree on Mpls 2040

  1. Bill Lindeke
    Bill Lindeke October 16, 2018 at 11:41 am #

    The answer to where Kelly Doran lives: Eden Prairie.

    http://minnesota.publicradio.org/collections/special/2006/campaign/governor/doran/

    • Matt Brillhart October 16, 2018 at 12:33 pm #

      I’m pretty sure I recall reading that he moved to Mill & Main in recent years.

  2. Bill Lindeke
    Bill Lindeke October 16, 2018 at 11:46 am #

    I would point out that there are probably many people who are developers or live in nice homes that are fine with the 2040 plan, which has broad support in many areas of the city and aligns well with equity and climate goals that have clear mandates in Minneapolis. I’d prefer to avoid making sweeping generalizations about these categories of people just because there’s a vocal group with lots of connections.

    • Ryan October 16, 2018 at 12:55 pm #

      It’s kind of how you have to talk about this stuff. This is a powerful contingent of people, and we need to daylight that. Of course there are those who don’t fit this generalization, but they keep getting missed in media coverage, so much that you might wonder if they really exist because of the dominant narrative.

      Anyone else who supports climate goals, equity, and the 2040 plan in Southwest, perhaps owning nice homes in Southwest, should be especially encouraged to use their positions of power to actually speak up, speak with their council members, show up to meetings, speak out at community meetings and show others that they are there. Until then, it’s going to be an easy generalization to make, and for good reasons.

    • John Edwards
      John Edwards October 16, 2018 at 1:03 pm #

      While I agree there are fine people on all sides, I stand by what I wrote. Privilege and comfort have so much more in common than anti-developer yard signs would indicate.

      • Bill Lindeke
        Bill Lindeke October 16, 2018 at 2:20 pm #

        There are more than one group of developers, tho. I’ve chatted with some that have been really reasonable.

  3. Nic Raymond October 16, 2018 at 11:53 am #

    We’ve really got to do something about these developers.

  4. Trent October 16, 2018 at 1:47 pm #

    This is pretty sloppy writing. To suggest everyone “agrees” just because they all don’t support the 2040 plan as is, but for different reasons, that’s an invalid leap.

    There are homeowners aka Minneapolis For Everyone who are steadfast opposed to aspects of the 2040 plan because they do not want multi-family housing increasing into the predominately single family neighborhoods. They want large buildings in other denser areas of the city like uptown downtown and by the U.

    Then there are developers who think the idea is “silly” because they know that economics do not favor them building these small buildings to make affordable priced housing. They also think that the homeowners who are blaming them for the 2040 plan are “silly” for thinking they would be driving it.

    There are developers who are uninterested in that aspect of the 2040 plan – ambivalent really – because they can’t make money on these small projects and they will prefer to stick to the large programs they are doing in denser areas of the city like 26th and Lyndale, uptown, downtown or the U.

    So from those developers perspective they are actually more aligned to the urbanist density fans because they would go even higher on density than 2040 proposes and build big units along big roads. this will result in lower costs per unit than small buildings because of the economy of scale, make it easier to build transit infrastructure and accelerate the grown of amenities to make walkable cities.

    A better title for this would have been “People have different reasons to not like the 2040 plan. Here’s 3 of them”

    • Matt Steele
      Matt Steele October 16, 2018 at 2:30 pm #

      “Three interest groups that are personally enriched by the status quo of housing scarcity”

      • Trent October 16, 2018 at 5:19 pm #

        Developers, in general, are not in favor of maintain housing scarcity – they are fond, you know, of building, well, housing. So you see how they kinda want to drive up supply? Very different approach than maintaining an area of low density.

        • Rosa October 16, 2018 at 11:33 pm #

          but maintaining many areas of low density still allows (some of) them to build in the remaining area and keeps their sale/rental prices higher.

      • Monte Castleman October 17, 2018 at 8:02 am #

        As a house owner I don’t consider myself “enriched” by housing scarcity. All the extra fake dollars the tax assessor says my house is supposedly worth I can’t use to go buy lattes unless I sell my house, in which case I’d have to live in a cardboard box, or take out a home equity loan, in which case they’d have to be repaid with real dollars that I couldn’t use to buy lattes. Meanwhile time I have to pay real dollars in property taxes that can’t use to buy lattes.

        Judging by the grumbling on the Bloomington Facebook pages after the latest tax assessments came out I’m not the only one that views my house as a home rather than an ATM machine.

        • Matt Steele
          Matt Steele October 17, 2018 at 12:30 pm #

          Yet you have bemoaned the lack of “affordable starter homes” in other threads, such as a lack of sub-$200k homes in regular Bloomington neighborhoods. Could you comfortably afford a home in your neighborhood now if you were a buyer?

          Sure, you and I may be enjoying our homes that we bought during a time when it was much easier to buy. We may not be itching to sell and capture the wealth that is tied up in our equity. But that doesn’t mean we’re not benefiting from the status quo, where we have housing stability and a house payment that reflects a price of the past rather than the price of the present.

    • jeffk October 16, 2018 at 5:52 pm #

      Maybe a question worth asking is why for hundreds of years medium-sized buildings were worth building and now they’re not? For some reason the economics make sense for 1 unit or 100 but not for 2-10. I don’t know the exact answer (they’re certainly motivated to lie and say it’s not possible, or maybe it’s building tech, or financing), but whatever it is, the big developers probably really appreciate the lack of these missing units – it’s just that much less competition.

      • Mike October 16, 2018 at 7:08 pm #

        That’s the wrong question. It’s not why are they not profitable, its for whom are they still profitable.

        They are not as profitable for these large companies as large projects are. These large construction firms are optimize for big projects so when you ask them about the missing middle type projects they are not enthusiastic.

        So the question would be with zoning changes will firms retool to be successful with projects like these, scaling up in some cases or creating teams that can profitably build small multi-family. Any builder who does a luxury single family should be able to turn a profit with a luxury duplex or triplex. Dropping into the affordable housing range with less markup on lux finishes and the like is where their challenge begins if their cost structure needs the markup,

        I had a garage built a few years ago. Sussel. They are a machine when it comes to garages. They underbid other traditional contractors, and their parade of subcontractors came like clockwork as they moved through the 6-8 garages going up over the same days as ours. Even with their lower price I bet They had more profit then the stand alone we interviewed because they get better labor rates and volume deals on building materials etc centralized project management recycled building plans etc…. even with the necessary site customizations.

        Despite the fact that building my garage was profitable, Doran wouldn’t want any part of it.

        So who will be the Sussel of triplexes?

        • Bill Lindeke
          Bill Lindeke October 17, 2018 at 7:59 am #

          I think it’s a good question. My point with my comment earlier was that there is inequality and power in the world of developers as well as in other social realms. Big (tens of millions of dollars) developers operate at a certain scale and are benefiting from a lot of the policies in place. But there are smaller scale developers or people interested in becoming developers. Years ago when I wrote an article on “missing middle” development in Minneapolis, I reached out to a few of these folks who are today managing to get a few buildings built in rare places. They did not want to do an interview and told me so, saying they preferred keeping out of the spotlight. On reason this is the case is that the zoning code does not support small- or mid-scale development. If we did have zoning in place where fourplexes were allowed (rather than requiring special variances), I’d imagine there would be much more willingness for these folks to be public figures, or that more people would be interested in building small-scale housing in more places in the city.

          The Kelly Dorans of the world are rich and powerful but they are also not the only perspective you will find in the city.

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