Mixed-use housing has a ton of benefits, so why don’t we see it more often? We sit down with local developer Ari Parritz to talk about the challenges with bringing these projects to life.
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Attributions
Our theme song is Tanz den Dobberstein, and our interstitial song is Puck’s Blues. Both tracks used by permission of their creator, Erik Brandt. Find out more about his band, The Urban Hillbilly Quartet, on their website.
This episode was produced by Sherry Johnson, transcribed by Stina Neel, and was edited and hosted by Ian R Buck. Many thanks to our guest Ari Parritz. We’re always looking to feature new voices on the show, so if you have ideas for future episodes, drop us a line at [email protected].
Transcript
[00:00:00] Ian: Welcome to the Streets.mn podcast, the show where we highlight how transportation and land use can make our communities better places. Coming to you from beautiful Seward, Minneapolis, Minnesota. I am your host, Ian R. Buck. Longtime listeners will remember how much producer Sherry Johnson likes to talk about zoning law on St. Paul’s Grand Avenue. Well, get ready for more discussions about the East Grand Avenue Overlay District, because Sherry has brought to the studio Ari Parritz, founder and president of Afton Park Development. He’s working on a project at Victoria and Grand, and we wanted to chat with him about the challenges of building mixed use housing projects.
Let’s jump in!
[00:00:45] Ari: I work in primarily urban contexts, although not exclusively, on housing projects. They’re most commonly ground up developments. I am working on a conversion right now, which we might be able to touch on if that’s relevant in this discussion. Um, but all, all housing, sometimes they have a ground floor commercial if it’s in a location that it works and sometimes they don’t, but housing is the common link.
[00:01:07] Ian: Cool. Yeah. And, um, founder and president, you know, does that mean that you are like a single-person LLC?
[00:01:14] Ari: So for now.
[00:01:15] Ian: okay.
[00:01:15] Ari: For now, for now it’s, uh,
[00:01:17] Ian: with big ambitions?
[00:01:17] Ari: It’s me, myself and I, yeah. I mean, I, I’ve got a full project load right now, which is a good problem to have, uh, and day to day I’m, I’m able to keep it afloat, but at some point in the future, I might look to bring some people on and expand partnerships and collaborations, that kind of thing.
[00:01:32] Sherry: That’s cool. Um, okay. Ari, for some of our listeners that may not know, and actually even just for me, uh, What, when we think of mixed use development, we all get this certain image in our brains. What, how do you define mixed use development?
[00:01:49] Ari: It’s most commonly apartments up top retail on the ground floor. That’s I would say 90 percent of mixed use development.
There are more elaborate examples that that have more vertical mixed use where you might have in a residential context, you know, ground floor commercial, hotel in the middle, condos up above occasionally, I think much more historically than now you might have had office in the middle and condos or apartments up above.
Um, that’s much less common right now for kind of floor plate dimensions and finance ability, things like that. Um, so I would say today when people are referring to mixed use in an urban context, it’s usually retail, publicly accessible retail on the ground floor. Um, parking is a use in and of itself. So parking, that’s a part of the building, you know, usually inside and underground and, um, and some kind of a living up above it doesn’t need to be rental apartments, it could be condos, it could be hotel, but it’s usually rental apartments though.
[00:02:45] Ian: This kind of includes everything from, like your classic Main Street vision of like, you know, it’s probably only two or three stories, but it’s commercial on the floor and then an apartment above all the way up to like five over ones is what, you know,
[00:03:01] Ari: or even towers. I mean, towers can still be mixed use if you’ve got even, you know, 2000 feet of retail on the ground floor.
Um, that’s still a mixture of uses technically. It’s sometimes used as a marketing term, right? Sometimes people like the sound of a mixed use building, even if it’s 98 percent apartments and 2 percent other, but that’s generally how
[00:03:24] Sherry: That’s interesting. So then you’re trying to like on a community development sense, kind of take care of everybody?
Or you’re saying, Oh, in this land, what’s going to be used for more than one thing? But on the flip side of that, you have to please more than one audience. So, you know, you’ve got folks who are looking for a particular kind of housing. You’ve got different kinds of retail, commercial, uh, restaurant space that want different things.
So what features are you hearing that people want in those dual uses?
[00:03:55] Ari: So it depends on who you ask, right? So if you ask a city, a city wants more housing, like basically every city wants more housing or says they want more housing and they want publicly accessible things in the public realm. So like on a main street or on a, on a, you know, really any kind of public thoroughfare, um, they’re typically looking for some kind of a retail space or something that the public can engage in if they’re not engaging in the residential units up above.
If you ask a, um, someone who lives in one of the residential units up above, they would say, "I want something cool. I want something that I would use on the ground floor." Um, if it’s, uh, I’ll just pick on them for no reason. If it’s an insurance office, they might say, well, it’s kind of great. You know, I know that counts as a mixture of use, but how often am I going to go into the insurance office versus like that cool coffee shop or gathering space or something like that.
And if you ask an investor, they would typically say, "we’d rather not have it"
[00:04:55] Sherry: interesting, why is that?
[00:04:56] Ari: Which might kind of lead us into a different line of questioning. Well, the way that these buildings are underwritten is by type, right? So when we’re going out and raising money to build one of these, uh, mixed use buildings, it might sound strange, but we oftentimes are working to deemphasize the non residential use because it carries a different risk profile.
It carries a different lease up uh, process. It carries a different cost structure timelines, you know, cause you’re signing usually one or two year residential leases. Commercial leases are usually two, five, 10 or more. And so an investor is like usually is getting comfortable with the residential profile.
The commercial is like a complexity and
[00:05:40] Ian: if it really meant turnover process for a commercial space, I imagine can be very different than the turnover process for residential.
[00:05:46] Ari: You could turn over an apartment unit in a day. You could take you a year or two years to turn over a commercial space.
[00:05:53] Ian: If it’s going from like a commercial kitchen to something completely different.
[00:05:56] Ari: Build outs are customized. The process to find tenants is completely different. You know, if you end up with a rental rate that’s too high on your apartment, Typically, you can just lower it to the point that somebody will take it, right?
There’s a deep enough, uh, to use a financial analogy, a liquid enough pool of renters that a landlord and a renter can find each other pretty quickly if the price point intersects. Commercial space is not the same.
[00:06:21] Ian: Is it inelastic demand? Or is it elastic? Ah, I don’t remember econ terms.
[00:06:26] Ari: It’s it’s inelastic demand for an apartment. But it could be an elastic price tolerance. So the point is, is that an apartment landlord can lower their rent in a millisecond to the point it meets a renter where they’re at. And that’s why the lease up of apartments can happen much more quickly and efficiently for a commercial tenant. It’s not that way. And you might say, all right, well, if I can’t find a tenant to pay my rent today, it actually makes more sense for me to wait six months.
[00:06:54] Sherry: And isn’t that part of their underwriting too, with some of their financers that they have to ask for a certain price point on commercial.
[00:07:01] Ari: Yes. With some flexibility. It’s um, it’s the kind of thing where, because you’re signing 10 year leases, it might actually benefit you to wait six months and find a higher price point than to fill it up sooner. ’cause you’re locking yourself into 10 years, or, I mean, in a, in a given example.
[00:07:17] Sherry: Sure. I mean, to back up a little bit on that point. Even, you know, you’re talking about matchmaking between, uh, you know, owners or landlords and, and tenants with commercial folks. What are restaurants and retail looking for right now in terms of the way that spaces are designed?
[00:07:32] Ari: They’re looking for efficiency. Um, we’re hearing most commonly that, um, you know, bars, restaurants kind of with full service are looking in that like three to 4, 000 foot range, whereas 10, 15 years ago it might’ve been six to 8,000 feet. You know, the, the era of like big sweeping restaurants is much more challenging right now.
And so they’re looking for a smaller format with really good visibility. Which makes an area like Grand in some ways desirable. We can talk for a second about certain ways that it’s not desirable. And then, uh, general accessibility, which is oftentimes parking. Not always. Um, but they want to make sure that people can quickly and easily get in and out with a predictable cost structure.
So, if, if a bar and restaurant goes into a mixed use building that’s primarily commercial, and let’s say that it’s an older vintage building, oftentimes the common area maintenance and even the taxes are so unpredictable that even if the rent is low, the full financial burden could be high and choppy.
[00:08:34] Sherry: Oh, wow.
[00:08:35] Ari: So, you’re trying to look for kind of obviously the lowest possible cost to get the most possible benefit at the greatest level of predictability.
Yeah,
[00:08:43] Sherry: and it’s my understanding that old buildings often struggle to meet code requirements for, especially restaurants. Is that what you’re seeing too?
[00:08:51] Ari: That’s right. Yeah, for, for ventilation and for, um, ADA accessibility and a whole variety of different things.
[00:08:58] Sherry: And then you talked about how, especially that restaurant square footage equation has changed in the last 10 years. How have restaurant and retail space desires changed even since COVID and since online purchasing and, uh, you know, takeout and Grubhub and all of those have gone up sky high. What are you hearing about how that’s impacting design?
[00:09:19] Ari: Yeah. I think it’s how can they do more with less? Right. So as an example, the place that I just came from lunch that we were just talking about, all the ordering is at a counter and then the food is brought to you. And it’s not brought to you immediately.
Like it’s basically the same amount of time it would take to order from a server at a table. That’s the amount of time it takes for your food to come to you. But they have one person taking the orders instead of 10. So, price points are not different though. Like you’re still paying as if you were sitting down and ordering from somebody in more of a traditional setting.
So that’s just one example. And I know there’s lots of others and I’m, I’m not a restaurateur. I observe it as a patron and in certain ways as a landlord. Um, but it’s how can we do less with more because everything costs more. And it doesn’t mean that, you know, restaurant or bar patrons have the appetite to pay more. So you have to find ways to just become more efficient.
[00:10:13] Sherry: Yeah.
[00:10:14] Ian: When you, as a developer, when you’re looking for your next site that you’re going to, you know, do some work on, like what, what are you looking for? In a location, in a site, you know, what are the, the metrics for project viability that you’re, that you’re, you know, cause I think about Grand Avenue, very high profile, you know, it’s a pretty obvious commercial corridor to be targeting.
I’ve seen a lot of projects going in, in places that are like, South Uptown at like 33rd and Gerard. Right. It’s like, who’s thinking about that intersection? Nobody, but like people are doing projects there. So yeah. What, what’s your decision making process?
[00:10:53] Ari: It’s a really good question. It’s changed over time.
So when I first started developing in Minnesota. In 2017, 2018, I was looking for kind of the next cool neighborhood. Where is the path of growth leading and how can you put a project right in that path of growth so that you’ll benefit over time? And I spent a lot of time working on University Avenue close to the university and kind of the Green Line was new and what in Prospect Park and you know, what’s coming, and Surly hadn’t been open for that long.
It was still really kind of getting its, uh, its fame. And so I became really interested in that neighborhood because it was in the path of growth. But what I found is that I had to become a major cheerleader for that neighborhood because so few people really knew that and understood it. In town, certainly from out of town, they’re like, where is this?
You know, they know, they know the North Loop and that’s basically it. So, you know, I did that for a while. And I think what happened after COVID was that there was some kind of a retrenchment. And my strategy changed on the kinds of projects that I go after. And I don’t think this will be forever. I think it’s just now. And over the next few years, it became less about where is the path of growth going and where could I be in the future to hit it? And instead, what is hot right now? What doesn’t need to be sold? If I tell somebody the address or the intersection, maybe not from out of town, but certainly somebody within the Twin Cities, they would say, "Oh, obvious. That’s a great place to be. "
[00:12:21] Sherry: So am I sensing some conservatism almost?
[00:12:24] Ari: Yes. Yes, definitely. I mean, it is a more conservative approach to site selection.
[00:12:29] Ian: Um, I’m imagining a developer with like a kick-butt TikTok account where they’re like trying to promote, you know, they’re, they’re the influencer who’s trying to get people excited about the next,
[00:12:39] Sherry: I remember on the East side, there was somebody that came, by our houses, door knocking to show the project that they wanted to do at that time down in the, in the Creek area there. Yeah. I mean, I do feel like that has shifted a lot for developers now that I think about it,
[00:12:54] Ari: It has. There was more appetite to take more risk before COVID. I think what happened also, not just in the Twin Cities, but specifically in the Twin Cities is that. Investors said "we want to take less risk. Not that we don’t want to invest in primarily residential, like that’s still very much a thing. And that’s still very desirable, but it’s, we’d like to take less risk on location and kind of pioneering because the market is uncertain". And if we, if we can neutralize the variable that says this location will do well, or won’t do well, then it can help us get over the hump for the rest of the project and that, that influences how I’m looking at and working on projects right now.
I’m working on obviously this project at Grand and Victoria. I’m working on one in Cathedral Hill at a very desirable kind of "sell yourself" location.
[00:13:40] Sherry: Is that one known yet?
[00:13:42] Ari: Uh, we can talk about it. I’m working on one in the North loop. I’m working on one on France Avenue in Edina and one in downtown Hudson right on the river.
So the common link between those five projects is they’re in absolutely. once in a lifetime locations. And the second you talk to somebody about any of these addresses, their eyes light up and they’re like, "wow, that’s a great location" versus, "Oh, I don’t know where that is. Can you tell me about it?"
And I think the era of, "I don’t know where that is. Can you tell me about it?" We’ll come back and it really needs to come back for certain neighborhoods to grow. It’s just much more challenging right now.
[00:14:18] Ian: I imagine that that means that you have made the concession to yourself that like, Oh, the upfront cost of acquiring this property is going to be higher because it is already well known.
[00:14:28] Ari: That’s right. And that, you know, it’s just an equation. If the cost is higher, can you charge more in rent? And, and one thing I didn’t cover is, you know, within the housing world, I’m doing primarily market rate housing. Um, there are affordable housing developers who do an amazing job and know much more about it than I do.
[00:14:46] Sherry: And we’re hoping to have a part two of this.
[00:14:47] Ari: Great! I’ve, I just made the strategic decision that I would focus in market because it’s what I know. And I, I think I do a decent job at it and, um, be able to collaborate with affordable housing developers who really know their business because they’re similar, but they’re also apples and oranges, you know, especially on the financing.
So yeah, the cost of the land can be higher, but sometimes it’s not. And sometimes it’s not because it’s a really complicated site and it hasn’t been, uh, efficient or desirable for developers to take a run on in the past, not because of the location isn’t good, but maybe because it has some underlying dynamics that are really kind of cumbersome to sort out.
[00:15:24] Ian: Yeah. Can we dig into those a little bit? Like, what are some of the things that hold you back from a particular location aside from people don’t know about it?
[00:15:32] Ari: Yeah. I mean, certain things that are opaque to the public, right? Ownership interests can make redevelopment and a sale extremely complicated. If there are kind of generational issues or if there are multiple ownership issues, it can essentially freeze a site because a transaction is so difficult to overcome.
[00:15:53] Ian: And give me an example of what that looks like.
[00:15:55] Ari: You could need a elder generation to agree to something that a younger generation wants to do. And it’s,
[00:16:03] Ian: you’re talking about like the current owners who you’re trying to acquire from. Okay.
[00:16:06] Sherry: So like family squabbles?
[00:16:08] Ari: Yeah, just to be sure. Like, no, I’m going to talk in generalities, like not specific to a, to a certain site, but sure.
You could have that situation where decision making power is in, you know, the oldest generation, but the middle or the younger generation is kind of really thinking about, Hey, we should sell because there’s more, more potential and more value. And, and there’s a disagreement and that leads to inertia.
Like that, that’s common. And I’ve seen that. more than once. I’m working on another site that’s got multiple owners because they each own like these different pieces and to do a project, you have to assemble them all and the owners don’t have completely consistent goals and objectives. So it takes a lot of time to build relationships and try to bring, you know, these disparate interests together.
Sometimes too, it’s like something more obvious, like contamination or, uh, physical dilapidation or other things that people just may not want to touch.
[00:17:04] Sherry: Sure. So like zooming out, looking over your career, what’s a story of a particular frustration that you had? Um, can you tell us about a time that really didn’t go well?
[00:17:20] Ari: Yeah, I mean the easiest one to talk about is that my experience in Prospect Park because that was an example of you know possibly thinking a little bit too big too early. And You know "time kills all deals" is sort of a an off repeated real estate adage.
And that particular project had too much time and too many kind of punches to the gut to sustain all of them. Like it could sustain a lot of them, but it ended up not being able to sustain all of them.
[00:17:51] Sherry: And what, what was the project called or is it still around?
[00:17:54] Ari: Yeah, that project was first known as The Art and Architecture project. And then it subsequently was known as The Wallace. That was the branding that we came up with. Uh, the building, the Art and Architecture Building was originally called Wallace Coach and Carriage.
[00:18:06] Sherry: Oh, sure.
[00:18:07] Ari: Sure. The Wallace Prospect Park was kind of a cool way to bring it back to where it started.
And it, it experienced a series of lawsuits, which happens sometimes with real estate projects. It experienced some neighborhood discontent where there were kind of, you know, two sides, you know, the pros and the cons, and, uh, that, that didn’t always work very well. It experienced the pandemic. Which was really kind of a big, big major gut punch.
It experienced some partnership issues and I think it could have endured, you know, four out of the five, but it was the fifth one that, you know, pushed it over the edge. And, uh, you know, it’s, it’s a site that I think about all the time because to this day, nothing has happened on it. I started working on it in the middle of 2017.
We’re talking about seven years ago, still nothing has happened on the site. And I’m, I wonder.
[00:18:57] Sherry: Wow. It sounds like a really steep learning curve to do this.
[00:19:00] Ari: That was a 250 plus unit project. So it was quite substantial.
[00:19:04] Sherry: Okay. So moment of joy, like what has been. Your moment of joy doing what you do?
[00:19:10] Ari: I would say it was when the 695 Grand project opened, you know, cause that was a lifelong dream of mine before I even knew that I was interested in real estate.
Like I knew Grand Avenue. I used to come to Grand Avenue for dates and middle school and high school. Like I had lived in, in, um, the suburbs, but like, that’s where you came. That was the, like the place to be and to be able to develop on that site on a, you know, not the highest profile intersection, but a fairly high profile intersection with a really amazing team in what has now become my backyard.
Cause I live just a few blocks from there. It was just a dream come true and the project could have died eight different ways and it didn’t, uh, it made it through and it opened and it was successful. It is successful. Uh, and so that, that’s my, my kind of victory lap is seeing that and seeing it thrive is, is really gratifying.
[00:20:03] Sherry: Yeah, can confirm as if someone who lives in the neighborhood. Um, so when you, as a developer are thinking about a project, what’s your bigger concern on the front end, you decide to develop a site, are you thinking and waking up in the middle of the night about zoning issues? Or the public comment process.
[00:20:21] Ari: Ooh, that’s a really good one. I would say zoning issues primarily. Because you either can get around them or you can’t. And if you can’t, like, that might be the end of you. Public comments are important. They are emotional, typically. Um, they can also be a distraction. Because it’s pretty easy. And you would both know this just from each of your, your own experiences.
It’s pretty easy to see if there’s substance or if there’s anger and when there’s substance, that’s great. That’s actually something that as a developer, I really look to because substantive feedback that has an aim of, you know, constructive criticism and productivity and some kind of advancement is good.
You know, the developer doesn’t know everything, you know? We know a lot about some a things, less about others, but we need feedback to make sure that we’re on the right track. And when we can get that and it can influence design, if it can influence program, that’s great. But oftentimes we see anger and it’s just raw anger at any kind of change.
And that’s something that, you know, isn’t pleasant. And we try to empathetically respond to it to the best of our abilities, but it, it doesn’t always help. And particularly with comments that are digital. Sometimes you don’t know if it’s real. You don’t know if like a human being wrote that, did they just ask ChatGBT to spit out some nasty comments?
So those I don’t, sometimes I don’t even read them. You know, I used to read every single one and now I’m like, if it’s important, my attention will be drawn to it.
[00:21:56] Sherry: Yeah, yeah. Is it different between Minneapolis and St. Paul? Does that equation shift? Um, Because we’re all about fighting between the Twin Cities in this podcast.
[00:22:06] Ari: Maybe a little bit. I mean, in our particular neighborhood, you know, there’s a history of, engagement to put it lightly, um, around certain kinds of developmenty things or certain kinds of municipal policies. And I think that’s good. Like, I think it’s good to have an active community. It doesn’t always manifest itself in a nice way.
I would put it sometimes it can be very mean and antagonistic and that what’s the point? It’s like, if you want to try to improve a particular outcome, improve it in a nice way, you’re more likely to have success, but I’ve noticed in certain campaigns, whether it was, I’ll just pick on them, like organized trash or the parking meters, which predated me a little bit, um, or Save Our Streets or, or a particular, you know, around the Summit Avenue bike trail or a particular development project, like it’s not a kind of good versus good debate. It’s kind of like a, a dark and, and mean versus like a happy and sunshine. And if that’s the debate, like it’s probably not a lot of productivity that’s going to come out of it. And it doesn’t, my, my bottom line is it doesn’t need to be that way. You can engage in the critical substantive issues in a nice way and then try to get to a better outcome.
[00:23:19] Ian: Yeah. Yeah. I, I’m always trying to foster, especially on this show, like what is our positive vision for the future? You know, with whatever topic of conversation we’re covering. Yeah. So I totally hear you there that it’s, yeah.
[00:23:37] Sherry: What makes people tend to fight mixed use projects? What are some common arguments you’ve heard against it?
[00:23:44] Ari: I would say it’s less about the mixture of uses and more about the project in general. And it’s, I think when you get to know a particular block or a particular parcel, even you think like that’s your experience, whether it’s positive or negative and any kind of change to it can be felt as like an affront, like a personal affront.
And certain kind of excuses, I would say are thrown out because, and I say the word excuses carefully, but also intentionally, because when they’re countered with data and facts, they usually still stay there as an excuse, um, versus kind of like a reasonable concern. Um, but you hear things about changing character, destruction, uh, "out of place" on and on and on.
And I think those are all code words for, "I don’t like it. And I don’t want my experience as it exists today to change." Um, not always, it’s a generalization, but I think that’s kind of a common thread.
[00:24:45] Ian: Yeah.
Um, speaking of like changing the character of the neighborhood, like how, how much attention do you usually put towards.
You know, matching like the, the materials used for the exterior of the building or, you know, the architectural style, that kind of thing
[00:25:00] Ari: You mean with your existing fabric.
[00:25:02] Ian: Yeah. Yeah.
[00:25:03] Ari: Um, a lot
[00:25:04] Ian: like what, yeah. What are your preferences?
[00:25:05] Ari: A lot. What’s interesting though, and this is, this is news to a lot of folks is first of all, there’s not a right way to do it.
And if you’re building on a historic street or on a street that has a lot of structures that go back. The right answer isn’t always to replicate them. Sometimes the answer is to contrast them to help them stand out more. Because, you know, what the, the design styles that a lot of people love and appreciate today when they see, you know, just walking on the street in terms of masonry detail and glazing detail.
And a lot of things that A. Don’t exist anymore because the craftspeople and artisans who built them, you know, died a hundred years ago and they have not been replaced or they’ve been replaced on such a small scale that it’s very difficult to employ in a big setting. And also that they look better over time.
Right? So certain kinds of masonry is an example, like it’s seasons and it looks a lot better 50 years after they’re put in place than it did on the first, our first, uh, day they were put, put in place.
[00:26:00] Sherry: Oh, man. I didn’t that, I didn’t even realize that. Yeah. Whenever I see a new brick building, I’m like, Ugh,
[00:26:05] Ari: Yeah. It doesn’t look as nice. Uh, the brick, sidebar, the brick is often acid washed after it’s put in place, so I’ve seen brick. That once it’s first installed, I’m like, wow, that looks awesome. Why does it look so much nicer than what I’m used to seeing? And then it’s acid washed to kind of clean up all the grouting and all the overspray and everything.
And it takes that like beauty away. And then it takes 50 years to get it back to just kind of season. So a long way of answering your question, Ian, I think there are certain common things that I would look to do. It’s like, if the, the dominant material is masonry, then maybe kind of. Take a cue from that, but also don’t copy.
And even if you want to, your architect will probably tell you they will, they’ll strongly encourage you not to. I’ve noticed that architects, even ones who spent a lot of time working in historic districts tend to have a little bit more modern flair. Not that they won’t do something that has more of a historic or traditional look, but they’re trying to do a little bit more modern to do their own thing.
To put their own stamp on it. And so the
[00:27:06] Ian: adding to the conversation rather than just repeating what’s already been said,
[00:27:09] Ari: That’s a perfect analogy. And so the, the developer and the architect and any other stakeholders who are involved, we’ll try to bring those kinds of different ideas together into a design that makes sense.
[00:27:20] Ian: Yeah. So a design that a lot of people are like, they’re just so over it is five over ones. Right. That’s it’s, it’s. People people love to hate on it, right?
[00:27:30] Sherry: Five five stories of housing over one layer Yeah
[00:27:32] Ian: Well specifically like the cinder block for the first floor and then timber for everything above that and you know, like it has a very particular visual style for what you do with the the timber that I think people push back against like, Oh, these are all looking exactly the same these days.
[00:27:49] Sherry: Or they’re built cheaply. I’ve heard that too. Yeah.
[00:27:52] Ian: Yeah. Yeah. People have a variety of different reasons to hate on it, but like everybody seems to hate on it. So like, like what are, what are the other options for you as a developer when you’re coming up with a,
[00:28:04] Ari: It’s a great question. Um, the short answer is not many.
[00:28:08] Sherry: And what is why
[00:28:09] Ari: it’s, it’s a function of cost primarily, you know,
[00:28:12] Sherry: Cost, not code?
[00:28:13] Ari: Not a, well, it’s both both. So there’s other ways you can build, right? You can build out of concrete, you can build out of steel, you can build out of block, you can build out of, uh, heavy timber, like structural timber, instead of kind of what’s referred to as stickframe.
Um, so there’s a lot of different ways you can build, but code and cost. Push you 95% of the time into five over one. It’s not because developers or architects like that style more than we like anything else. It’s that you usually don’t have a practical other choice. As an example, if you’re going to build out of concrete, which you have a lot more flexibility to do just based off of the way that concrete is poured, you have to be at 10 stories minimum, just to cover the fixed cost of having all of that concrete, Infrastructure.
[00:28:59] Sherry: Now, does that count like underground parking as stories?
[00:29:02] Ari: No, I mean 10 above grade.
[00:29:04] Sherry: Oh, wow.
[00:29:05] Ari: That’s a rule of thumb. It’s not always exactly 10, but typically if you’re in a zoning code that only permits six or seven, you’re going to, there’s no way you’re doing concrete because you can’t get enough efficiency out of that fixed cost to build it to justify doing the project.
And the truth is tenants notice a difference. But it doesn’t mean that, you know, these buildings that we’re talking about, these five over one or five over two buildings are undesirable to tenants, you can get quite significant rents, so it doesn’t mean that you have to build out of concrete to get higher rents, it just means that it would be nicer, but in being nicer, you can only do it in certain locations where that height would be received.
[00:29:46] Sherry: What’s an example of concrete. Like that, what’s a, what’s an example of that type of construction that we might think of?
[00:29:52] Ari: Um, well, to be extreme, like the 11 on the river condo tower.
[00:29:56] Sherry: Oh, okay.
[00:29:57] Ari: Towers can’t be built out of wood. They need to be built out of concrete. It is very uncommon to see an urban concrete building.
I would say one exception that I can think of that’s not 10 stories would be the Nolan Mains building.
[00:30:11] Sherry: Okay.
[00:30:11] Ari: In Edina at 50th and France.
[00:30:13] Sherry: Oh, yeah.
[00:30:13] Ari: I’m almost positive that one is built out of concrete. And, um. It’s not 10 stories. It’s between four and six, I think. But that those are probably some of, if not the most expensive units in the whole metro area.
Um, you really, you have to be able to have that kind of price elasticity to live in a building like that in a location like that to have it make sense. I would say a combination of the codes, kind of direct you to where you go, but also our subcontractor and general contractor base, right? We’ve got a really deep subcontractor base that really knows how to build these kinds of buildings and they do it really well And they do it efficiently.
And so you see that over and over again.
[00:30:54] Sherry: Oh the five over ones you’re saying?
[00:30:55] Ari: If you were let’s just say coming from Chicago, which happened to be where I started my development career and you come to Minnesota the grand idea is to build buildings here like you’ve seen them built in Chicago, you would immediately encounter a, uh, supply chain problem because you don’t have the subcontractor base who knows how to build those kinds of buildings.
Or even if they know how to build those kinds of buildings, they don’t do it very often. So they’re not going to charge you the thing that the same as the thing that they do routinely.
[00:31:25] Ian: If you have very few people bidding on a job, You’re going to have higher prices.
[00:31:30] Ari: Exactly. Yeah, exactly. So there’s certain kinds of development in Chicago that you see everywhere and you see basically none of it here.
And it’s, we call it missing middle. It’s, you know, kind of the four, six, eight. 22 unit, um, buildings that are between three and four stories more, more commonly that are built out of masonry. Like they’ve got, you know, block, uh, block structural system and then, you know, usually wood stud interiors.
[00:31:57] Sherry: Yeah.
[00:31:58] Ari: That’s very common there. It’s used for both rental and for sale housing. So when you talk about like, there’s no new for sale condos, like there really isn’t in the Twin Cities, partly it’s because we can’t build that sort of a building.
[00:32:09] Sherry: Is that the stairwell problem? Or is it also, I mean, if you say you’re saying it’s the contractor problem, is it also the stairwell problem?
[00:32:15] Ari: The stairwell problem contributes to it. Okay. And maybe
[00:32:17] Ian: we’re talking single, single access staircase? Okay.
[00:32:20] Sherry: Yeah. Yeah. Can you break that down a little bit Ian?
[00:32:22] Ian: Yes. The, uh, I don’t know, is that a Chicago thing? Seattle’s the city that I think of most often.
[00:32:26] Ari: No, Chicago you still need two.
[00:32:28] Ian: Okay. Where, um, if, if, uh, so for most places in the United States, fire code dictates that if you exceed three stories or so, uh, you have to have two different staircases that every, like every unit needs to have access to two staircases to get out.
Yeah. And that constrains, uh, the types of buildings that we can build, right.
[00:32:51] Sherry: And a lot of our advocacy friends are trying to fight that at the state level in Minnesota to create more of this missing middle. Um, yeah, but you’re saying that even if that happens, there aren’t a lot of contractors who can build that?
[00:33:02] Ari: Well, you can build those buildings out of wood. You don’t have to build them in exactly the same way that they do in Chicago. Uh, and that change would help a lot. I think it would make buildings look a little bit more interesting and they’d be more accessible. And, you know, being able to get two frontages of windows in a apartment unit, which that would enable is desirable, right?
The vast majority of our apartments, you know, 90 percent of them in a given building have one frontage windows. So that’s where you have to put your living room. That’s where you have to put at least one bedroom, sometimes two. And so it limits what you can do in building design. You have corridors that are double loaded, which just means that you can go into units on the left side or the right side of the, of the corridor.
Corner units are more desirable because they’ve got multiple light access points. And so we, we try to do more of those.
[00:33:49] Sherry: So anything else you want to say about how zoning codes, zoning or even, um, compliance codes, uh, building codes. How did those impact the pricing of building mixed use?
[00:34:02] Ari: We’ve got, um, energy requirements in Minnesota that are oftentimes significantly higher than they are in like just other Midwestern states.
I’m not saying whether that’s a good thing or a bad thing. It just is a thing. And so that ends up leading to higher costs. It also ends in or leads into, um, you know, a better sustainability profile, but right.
[00:34:22] Ian: Lower energy costs over time.
[00:34:24] Ari: Absolutely. And it just makes buildings more expensive to build.
We’ve got other standards that, you know, can sometimes add some levels of cumbersome, but, but I wouldn’t say they’re necessarily common to Minnesota, there are certain things that are just common to the building code and the standards are constantly changing. So you might be pricing a project under the 2022 electrical code, but for every project coming after 20, I’m not literally, but every project coming after 2024 is the 2025 new electrical code.
And that adds 20 percent of the costs of your electrical package. And so there are things like that, that you’re navigating, that you’re always going to be navigating. But if, if Minnesota ended up as a leader in the, the single stair compatibility, which seems to have like quite a bit of life safety data to show that it’s safe.
I think that would be great.
[00:35:12] Sherry: Yeah. And what about electrification? Where, where are developers on that? I mean, I know so many people are still really hot on gas stoves, for example.
[00:35:20] Ari: It’s, it’s difficult, although not impossible to efficiently heat a building in our climate on only electricity. It can, it can be done.
Sometimes it leads to like extremely high electrical bills when you’re doing it that way. And gas, although it has like a higher carbon footprint is less expensive. And so the, the cooking is really like a small percentage of the energy load of the building.
[00:35:45] Sherry: It’s the heat pump versus furnace model. Is that it?
[00:35:48] Ari: Yeah. Sometimes. I mean, Magic packs, which are the most common, um, HVAC unit, uh, HVAC units for apartments. You know, you see all the grills on the outside of buildings. Those are magic pack grills. It’s just one box that provides heating and cooling. That can be served by either electric or gas. You might expect like gas is a little cheaper, electric is, uh, or the cost to install electric is a little cheaper.
The cost to service electric is a little higher and vice versa for gas. So I would say there’s some Interest that I’ve seen in induction technology to cook instead of gas. Most people prefer gas. At least they tell you they prefer gas. Whether that would really lead to like a leasing decision is a little bit more gray.
[00:36:31] Sherry: Especially in a tight housing market?
[00:36:34] Ari: We had on a recent project that I did, we had multiple residents reach out to us who had signed leases before the building was open ask if the stove could be switched from gas to induction. We said, sure. Oh, wow. You have to pay for it, but if you want to, we’re happy to switch that up for you. I think that’s going to pick up steam.
[00:36:51] Sherry: Nice. Okay. So listeners of our podcast know that I am obsessed with talking about the East Grand Avenue overlay district and, uh, all the little geeky nerdy aspects of that. And for, you know, there was a lot of folks, including me for a long time that were trying to change it, to update it, to make it more developer friendly. So how did the passage of the overlay update impact the timing and choice of your project?
[00:37:18] Ari: Great question. It impacted it significantly. The process that the 695 Grand project went through to petition the neighborhood and the city to provide relief from the three story maximum was contentious, to put it mildly.
And so in the new overlay district standards where there is no height limit, there’s no height limit imposed on top of what the zoning code, um, governs, it all of a sudden makes development a lot easier to contemplate. On East Grand in particular, you know, it’s not that there’s no height limit period, which a lot of the folks who were engaged in this process, you know, were really concerned about.
It’s like, we’re not going to let people build to the sky at this point. Um, so it was, it was an educational, uh, experience too. It said, no, they’re actually, there’s zoning. There’s just not this overlay on top of the zoning. And it doesn’t mean that everything is zoned to enable redevelopment. So, in looking at this site at Grand and Victoria, I said, if it were rezoned, then it could comply with the overlay standard, but it needs a new underlying zoning,
[00:38:25] Sherry: Which I think from what I’ve heard, city folks are pretty positive on because at least in St. Paul, and I don’t know what the equivalent is in Minneapolis. It’s called a neighborhood node. It’s supposed to be transit oriented development. It’s supposed to be a little bit more concentrated. Is that your understanding?
[00:38:38] Ari: Absolutely. Absolutely. Absolutely. I think, you know, from discussions that we’ve had. That application will be met favorably. I mean, that, that’s sort of my sense. Part of the reason why you do all these zoning things before you close on a property is because unexpected things happen all the time. So we, um, we feel good about it, but nothing is guaranteed. And I would also say without getting us too sidetracked, it’s very uncommon for a city to rezone a whole neighborhoods all at once or whole cities all at once. It’s a very cumbersome process. It’s politically charged. It’s can be controversial. So a lot of zoning districts were established decades and decades and decades ago And what cities often do and I’m not blaming them for this, but it just is a fact of life, is they wait until a developer comes along and says, Hey, I’d like to, or a homeowner, uh, or a business and says, I’d like to do this thing here. And I think these are all the reasons why you should consider changing the zone. And more often than not, they say, yeah, makes sense. And you might say, well, why didn’t they just do that from the beginning? Why don’t they just go parcel by parcel and say, what makes sense on this parcel? First of all, it takes a lot of work.
Second of all, even the best and smartest and brightest planners don’t always get it right. Sometimes it was rezoned like five years ago, but five years have gone by and nothing’s happened there.
[00:39:59] Sherry: Or something life changing or earth shattering like COVID happens.
[00:40:02] Ari: So you need both, I think cities need to be doing a better job of proactively updating their zoning and not reacting to proposals every single time. And they also need to be flexible and just kind of meet the market where it is. I worked on a project in Maplewood that had a long term zoning guidance for a particular density that was established in 2007. And it sat vacant since 2007 up until last year.
[00:40:30] Sherry: My kid was born then, like that’s nuts.
[00:40:33] Ari: We we made a uh rezoning application of the city and the city was favorable but some of the neighbors said oh no, you know We bought our property based off of this adjoining zoning designation and they’re not wrong like that.
That is a thing but if the city’s intent was to guide it for you know, a certain amount of density and 15 years go by, and that density doesn’t come. It’s like, how many more years do you have to wait before you say, maybe we didn’t get that quite right. And we need to make a modification so that we can unlock the value here.
[00:41:04] Sherry: And I can imagine that that also adds significantly to the cost of building these things.
[00:41:09] Ari: Yeah. I mean, it’s, it’s cost and uncertainty, right? Because oftentimes it’s a combination of city staff, professional city staff, and elected officials. And unelected officials to things like planning commissions who are involved in making the decision.
And you would like to think that everybody’s operating under the same decision making, uh, parameters. They’re not always
[00:41:32] Ian: right. Current City Council doesn’t always, uh, you know, respect the things that a previous city council passed and said was their priorities.
[00:41:41] Ari: Exactly. And, and a volunteer planning commissioner may not have the same skill set that a professional city staff member or a city council member who kind of lives and breathes these topics every day has. And so you don’t always get perfect predictability and consistency. And that that’s just part of what it means to be a developer is you have to try to get your hands around that risk and decide what’s going to make sense to take on and what isn’t going to make sense to take on.
[00:42:07] Ian: So we, we’ve moved along in the, in the development process where, you know, things have been approved. It’s time to start thinking about, you know, getting rid of the old building and start building your new one. Number one, what are your thoughts on like demolishing versus deconstructing, right, to preserve those materials for later?
[00:42:27] Ari: So there’s a lot of, um, gradient in between, right? So when people think of demolition, they think of like one scrape, everything gets like put in a dump truck and it goes to a landfill. It’s even for projects that don’t take any special extras for their demolition or deconstruction. It’s usually more recycle-y than that because the, the demolition contractors have a lot of incentive.
The salvage material that’s valuable, right? So it could be brick or, uh, masonry or granite or other things that get crushed up into other things and resold. It could be scrap metal. And so they’ve got certain restrictions, both, uh, from a regulatory perspective and from a practical perspective that have them create this, you know, different material piles.
If you ever see a demolition happening, you should go check it out. Cause you’ll notice that they’ve piled up like materials. More often than not they’re not doing it because of the developer paid them more to do it or like did a special process.
[00:43:25] Ian: So it’s already like the organizational system in my apartment, there are different piles for different things from an outsider’s perspective. They just look like piles, but like, I know where things go.
[00:43:38] Sherry: Those things are valuable
[00:43:39] Ari: And you’re going to make the most out of them. So anyway, there, that’s kind of a traditional way of doing it. Deconstruction, is what it sounds like. It oftentimes is kind of piece by piece, uh, going out to further maximize the value in salvaging it, recycling it, reselling it, you know, whatever it is.
And I, I like to do something kind of in between, you know, more than the minimum, but oftentimes just the time it takes to deconstruct kind of takes it off the table,
um, because you can’t start deconstructing until you own, uh, for obvious reasons. And once you own, you need to go.
[00:44:14] Sherry: Yeah, you have to pay it off, right?
[00:44:17] Ari: You’ve got investors who are now waiting and you’ve got a market that you’re trying to hit. You can’t buy the building that’s otherwise ready to start building, be like, I’m just going to take a year to kind of carefully take every one of these pieces up. So you might try to do certain things that are of notable value, something big or interesting or something like that.
And it’s very easy to at least do kind of like fixtures and furnishing. So there’s a series of nonprofits around town who will come in and salvage everything that they can basically pull off the wall. You could go further and actually deconstruct, but like anything they could pull off the wall, flooring, cabinetry, plumbing, fixtures, all this
stuff.
[00:44:54] Ian: Is this like the, the Habitat for Humanity ReStore? Is that how they,
[00:44:57] Ari: some of it goes to the ReStore, um,
[00:45:00] Sherry: The reuse center at U of M does that for U of M properties, right?
[00:45:03] Ari: Exactly. And there’s a few other nonprofits that do it. They, they do it in workforce training and, um, other kinds of social programs, um, are sometimes involved, but from the developer’s perspective, is very, it can be profitable because you pay them a certain amount of money to do it, but then they give you the value of everything that they took.
So there’s, there’s appraisers who will go through and they’ll look at the inventory of what was taken and pictures of it. They’ll come up with an appraisal. Let’s say that it costs you $2,000 to send, you know, one of these nonprofits in, but they salvaged $50,000 worth of material. You get credit for, and then it comes off your taxes.
So maybe that $50,000 worth of material saved you $20,000 in taxes that you had to pay $2,000 for. So like it can be a very profitable thing that also is good for the environment and good for the people who are doing the work and et cetera, et cetera. I always try to do that if that’s possible.
[00:45:56] Sherry: That’s a world I didn’t know about.
[00:45:58] Ian: I, I would suspect that a project like the one at Victoria and Grand, where it’s a fairly like, it’s, it’s not just a residential house that you’re getting rid of. I imagine that it would be harder to deconstruct that than if you were doing a project where it’s like, we’re replacing a single family house with an apartment building.
[00:46:18] Ari: That’s right. Right. That’s right. And it depends. There’s a lot of variables that what is it made out of? How hard is it to deconstruct? You know, if it can be knocked over with a backhoe in a day versus like, again, sort of pulled apart over months and months, you’re very, very rarely going to be able to afford doing the pull apart.
[00:46:37] Sherry: Yah. And just knowing that that building in particular in St. Paul has a lot of meaning for some folks, it kind of makes me wonder whether that’s part of the equation of the public input process is like, what could be saved and put somewhere else?
[00:46:52] Ari: It could be. We’ve gotten a lot of questions and comments about the dragon, like the dragon sign.
So I was like, okay, we can pull the dragon off and it’ll find a new home. I don’t know exactly what its home will be, but it can find a new home. Certain other things like, you know, the exterior brick.
[00:47:06] Sherry: Yeah.
[00:47:07] Ari: You’re probably not going to be able to reuse it in your project, but it can be reused in a different project.
[00:47:12] Ian: And it’s had 50 years to, you know, get that spiciness.
[00:47:17] Ari: And then, you know, there, there’s other things inside that you don’t know about until you start taking the building down. And if you find something that’s salvageable, you salvage it. The project that I’m working on in the North Loop has a bank vault, an old vault inside one of the first floor spaces
[00:47:31] Ian: That’s dope
[00:47:31] Ari: that would, would become a retail space. It’s not currently a retail space. And so it’s like, okay, obviously when we’re demolishing all the, you know, partition walls and everything else inside, you try to save that so it can be reused in some capacity. So sometimes the neighborhood just has to trust you a little bit that you’ll make a good decision if presented the option, but you don’t always know about the option until you’re like in the moment,
[00:47:54] Sherry: and this is why we need good local developers that actually care about place. And maybe if we can keep costs down, it doesn’t have to be national developers all the time. There’s my rant. Thank you very much.
[00:48:04] Ian: What do, what do teachers in Ohio know about, uh, the dragon sign?
[00:48:08] Ari: Some, sometimes it’s really an emotional thing. I’ll give you an example. I worked on a project in a Minneapolis suburb that was in kind of a wooded environment. And it was on the waterfront. It was very cool, very cool project. And some of the trees on the site needed to come down. Like the building footprint was incongruent with the tree location.
Big old trees. And we felt like, okay, it’s a little sad that they have to come down. There’s unfortunately nothing that we can do about it. But what if we had a milled into finished material that we then brought back into the building? So we did. We, and it took a year. So you have to do that in advance because I learned about how kiln drying lumber works. Uh, you can’t just cut it down and put it in the next day. It has to dry out for a year or more, but we turned all of those trees into the benches and like little, uh, coat areas inside many of the apartment units. We used it as wall covering and a couple of our amenity areas. So it’s cool. Like, does anybody care that that wood came from that tree that was outside? Some people do some people like it
[00:49:10] Ian: so you leave them there as a warning to the other trees.
[00:49:12] Ari: Yeah. Uh, for better or for worse, this side of Victoria and Grand doesn’t have any old trees that we’re worried about, but it’s got dragon signs and yeah, yeah.
[00:49:23] Ian: So then, yeah, let’s take a step back even before you decide whether you want to demolish or deconstruct, like why not reuse, like, like, remodel or incorporate the existing building into the project in some way, you know, where, what goes into that decision?
[00:49:41] Ari: Great question. It’s usually a table stakes item. Like it either is possible, or it’s definitely impossible. And I’ll, I’ll use the example of this site. So part of what makes this site developable is the potential to build a level of underground parking. So if you imagine excavating a big rectangle with the building on top, can’t really do that with the building on top. So that’s what I mean by a table stakes. It’s like, you’ll know right away. Usually if you need to build a level of underground parking, you’re not going to be able to keep what’s up above it. Um, and typically, even though the city doesn’t have parking minimums, Practically and from a market perspective, you do need to build parking. Otherwise, people won’t rent your apartments. And that’s where everybody would agree. That’s where it should go underground, out of sight, out of mind. Um, and so that, that’s one, one reason.
[00:50:28] Sherry: And didn’t you share with me one time how much underground parking costs? And I.
[00:50:32] Ari: It’s a lot. It could be $20,000 a stall. It could be $50,000 a stall, depending on how deep it is and how much retention you have to do around the site, what the soil or sand is made or clay is made out of.
[00:50:44] Sherry: And you never, you never know what’s under there too.
[00:50:46] Ari: Well, you know, a little bit, like, we’re, you know, I’m actually in the process right now of, you know, having drill rigs go and drill holes down and then, you know, they can see all the layers of material underneath.
So, you know, but you know what it is in those spots.
[00:51:00] Sherry: Yeah.
[00:51:01] Ari: Sometimes those spots are representative of the whole site. Sometimes they’re not representative and you find something that you didn’t know was there.
[00:51:06] Sherry: Right. You could be in York in the UK and find Richard III’s body under a parking lot that you want to develop.
[00:51:12] Ari: You hope not to find anything archaeological.
[00:51:15] Sherry: Yeah.
[00:51:16] Ian: Um. Is that a thing that happened?
[00:51:17] Sherry: Yeah. That’s a real thing that happened. Huh. He’s still in the parking lot, Ian.
[00:51:21] Ian: Great. Okay. Yeah.
[00:51:21] Sherry: Yeah. Yeah. With a little plaque.
[00:51:24] Ari: So, so, so parking is one thing, underground or not. The other thing is. Is the building worth resaving? Like, can it be reused? And there’s not always a right or wrong answer to that. Yeah. But if certain buildings are, have, you know, deteriorated so much that it would cost substantially more to fix them up than it would to rebuild. It’s a hard proposition to make and it has to have enough intrinsic historic architectural design value that it’s worth it to do it. And sometimes it is like the project that I’m working on in the North Loop, a conversion will utilize historic tax credits to convert the building from office to apartments, right? That’ll preserve the building structure and reuse just, just like you’re asking, but that particular building is worth it. And that worth is, is oftentimes objective.
Like you have consultants who look and evaluate and determine worth it, not worth it. And, um, You know, that, that’ll influence it too.
[00:52:23] Sherry: And I imagine that has a lot to do with maintenance. Like whoever has owned it has taken really good care of it.
[00:52:28] Ari: Yeah, absolutely. If it’s been well cared for, it’s more likely to be a reuse candidate. If not, it might not. And in sometimes it’s not a black and white answer. Sometimes it’s like, well, this portion could be reused, but this portion can’t. And to redevelop it, we have to do all of it. We can’t just do this portion, so, unfortunately, Not every old building can be saved. Hopefully more can in the future than can’t, but I think it’s generally from like a society’s perspective, like, okay, that occasionally we have to lose an old building.
So long as we’re making investments to make sure that we are doing that thoughtfully and that we’re for everyone that we’re taking down, we’re making extra sure to save, you know, the ones that are worth saving.
[00:53:09] Sherry: All right. Ari, it’s been a real pleasure. Uh, I know you as a person that cares deeply about community life, vibrant third places. I think with the first, one of the first conversations we ever had was around the neighborhood plan and Summit Hill.
And you just loved vibrant third space was so important to you. And that’s kind of what made me want to have you on the show to talk about this. Um, when you think about the cities right now, what role do you see yourself and your firm playing? Like, where do you fit? What paths are you trying to forge for those who come after you?
[00:53:43] Ari: Yeah, I think,
this is where
[00:53:45] Ian: his savior complex comes out.
[00:53:46] Sherry: Oh, of course. Yes.
[00:53:47] Ari: I think it’s making. significant and thoughtful investments in specific places that you really know well. And it’s not just like the physical geography, it’s the people and the relationships and trust, right? And so it’s not always easy to do that. It takes a long time and it doesn’t always work. But I, I, I’m trying to set an example for other people to do that too. And to show that you don’t have to be a big, big, big established development company to take on a project. Like if you can get your hands around risk and you can get your hands around raising money, you can do it. You can do it. You might make some mistakes along the way, but if you’ve got a good team, like you can do it. Uh, and so that, that’s a, an example that I want to set. And when people say that it can’t be done, oftentimes it can. People said Grand Avenue could not be redeveloped for all the reasons that we, we’ve talked about today.
And we showed that it can, and that would help unlock, you know, future potential. Um, and it doesn’t have to be, you know, 200-300 unit buildings. Like you can do a 20 unit here, an 85 unit there, whatever it may be, different sizes are okay. Small is okay.
And big is okay. As long as you’ve got a, the right kind of mixture.
[00:55:04] Ian: Would you say that a background in like business and being able to manage risk is more important or like having an understanding of like the city’s process and zoning laws and, you know, all of the. The stuff that’s specific to?
[00:55:20] Ari: Yeah. So I, I, um, I have a business background, business and finance. I got my MBA and I focused in real estate and finance.
If I could go back and redo it again, I would have done an engineering undergrad so that I had a deeper technical expertise in what I’m doing and more, much more so on building sciences than on like. legal sciences in entitlements and zoning, because I think you can, you can learn entitlements and zoning a lot easier than you can learn architecture and engineering or construction.
So that that’s for me, sort of what I envy in my skillset that I I’m getting better day by day, but I’m not like a design and construction guy. And I, I wish I was more, I think I’ve gotten good enough at the, the, um, entitlement side, you know, just with my, my business and finance background, but I, I wish I had that, that engineering.
[00:56:15] Sherry: Well, Ari, thank you so much. It’s been such a pleasure to talk to you. I’ve learned a ton. I hope you enjoyed this. Uh, anything you’d like to share with our listeners, other things you’re up to information about where folks can find you.
[00:56:28] Ari: Yeah. Uh, folks can find me on my website, Aftonpark.com. [email protected] is my email address. I respond to everything. Um, so I I’d love to hear from you if you found anything in today’s episode to be interesting. And, uh, no, I’m, I’m excited to not only continue to make investments in St. Paul, which is where I live and where I’m from, and what I’m, I’m really passionate about, but all over the Twin Cities, I think, um, we’ve got an amazing, amazing community here with a lot of room to grow and a lot of needs that hopefully some of the projects that I work on can help, you know, make a little contribution to.
So thank you.
[00:57:02] Ian: Sweet. Yeah, it’s been a pleasure. And thank you for joining us for this episode of the Streets.mn Podcast. The show is released under a Creative Commons Attribution Non Commercial Non Derivative License, so feel free to republish the episode as long as you are not altering it and you are not profiting from it.
The music in this episode is by Eric Brandt and the Urban Hillbilly Quartet. This episode was produced by Sherry Johnson, transcribed by Stina Neel, and was hosted and edited by me, Ian R Buck. We’re always looking to feature new voices on the Streets.mn Podcast, so if you have ideas for future episodes, drop us a line at [email protected]. Streets.mn is a community blog and podcast and relies on contributions from audience members like you. If you can make a one time or recurring donation, you can find more information about doing so at [https://streets.mn/donate]. Find other listeners and discuss this episode on your favorite social media platform using the hashtag #streetsmnpodcast.
Until next time, take care.