Inside St. Paul's office-to-luxe apartment transformation
Add Axios as your preferred source to
see more of our stories on Google.
The living room of an apartment in Landmark Tower. Photos: Nick Halter/Axios
Renters will begin moving into St. Paul's Landmark Tower next week following the building's conversion from mostly office space to 187 luxury apartments.
Why it matters: City and civic leaders hope that projects like this will spur a downtown St. Paul rebound by filling vacant work space with residences.
Between the lines: Developer Sherman Associates is asking for top-of-the-market rental rates, with most priced between $2.25 and $2.50 per square foot. That equates to $2,141 a month for a one-bedroom, 907-square-foot unit.
- Other developers will be watching to see if Sherman can lease the building up at those prices. If so, it could prompt more conversions.
What they're saying: "This is going to be a case study that is going to move the needle one either one way or the other on the viability of other office-to-housing conversions in the coming years," company CEO Chris Sherman told Axios.
Yes, but: The 25-story Landmark Tower has advantages that few other office buildings in downtown St. Paul have. The tower has floors that are conducive to residential living because the original construction in 1983 included 18 condos on the top five floors.
- On a recent tour of the building, it felt very much like new construction, with high-end finishes, plenty of windows and amenities that you see in new buildings, including tenant lounges, roof decks, a hot tub and a sauna.
- It's also in a great location overlooking Rice Park, with Mississippi River views on one side and vistas of the Cathedral and Capitol on the other.
By the numbers: The $97 million project qualified for 20% federal historic tax credits matched by 20% state credits.
- The project also got $12 million in tax-increment financing (TIF) from the city.
- To make such a subsidy work, a development needs to increase a property's tax bill, which is tricky because office buildings are taxed at a higher rate than residential buildings.
- The office portion of the tower was assessed at $9 million before the redevelopment. It's now assessed at $6 million. Sherman said when it gets fully leased, he expects it to be assessed around $30 to $35 million and will pay four times the taxes the office tower paid.
What we're watching: A newly proposed bill in the Minnesota Senate — with bipartisan authors — that would provide a 30% state tax credit for projects like this. It had its first hearing yesterday.
Take a look around
