A missed opportunity

The Victoria Park project in St. Paul seems to be dead. It was to be the biggest single development project in St. Paul.  It took ten years to plan.  The site is what we call a brown field. It used to be owned by Koch Mobile.  For years huge fuel storage tanks stood on the site. They were removed and the land was cleaned up. They started building just about the time the real estate market had peaked.  If it had started two or three years sooner maybe it would have worked out.

Victoriapark2 

The townhouses in the picture are no longer for sale. They are being rented out and the rental rates are between 1800 and 2300 a month.  There is a sign out on the land advertising the availability of commercial lots.  The project would have been good for the neighborhood.  There are currently no plans to continue with the project.  There are new developments in the metro area that have been abandoned. Some have half completed homes sitting on lots.  Maybe some day we will need more new homes and someone will be able to build some but right now they just are not selling.  Was the Victoria Park project the wrong kind of housing?  Was it built in the wrong place or was it just bad timing?

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6 Replies to “A missed opportunity”

  1. I think these types of townhouses have limited appeal. I suspect that the developers wanted townhouses because they thought the higher density would allow them to make more money or that was the only way to pay for the land developement costs.

  2. Stephen Gross says:

    Townhouses only make sense in neighborhoods sufficiently dense to warrant them. For instance, if there is a very busy, pedestrian-friendly retail strip that is hemmed in by non-residential areas (such as office or warehouse), dense housing–such as townhouses–makes sense.

    To understand this pattern, look at existing, viable high-density housing in the Twin Cities. There are high-rise apartments in both downtowns, and low-rise apartment buildings in the university area. These work because a LOT of people need to visit the downtown / university areas on a very regular basis (especially students!). It’s more efficient to increase near-proximity housing. At least, it’s more efficient than the well-established American pattern: more parking, wider roads, more suburbs.

    Anyway, back to the townhouses: I don’t know. I doubt they’ll stick around. St Paul is great in part because its neighborhoods having great single-family homes.

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  4. Patient Buyer says:

    Are they succeeding in renting them out at that price?

    Assume a $2,000 monthly rent payment. To convert to purchase price, subtract the probably $200 for association and another $200 for property taxes.

    That leaves $1,600. At 6% (yes, I know rates are a little lower now).

    $1,600 for principal and interest suggests a mortgage of about $260k. This suggests a household income of around $80-90k. That kind of household income is going to become more rare.

    What was the original asking price here anyway? More?

  5. PB – they have three of them rented. The rents are at between 1800 and 2300. The end units are more expensive that the interior units. Last time I showed one of the units I belelive the prices were in the low to upper 300K range. The origional plan for the site included a lot of units. I don’t remember how many but there would have been density.

  6. As a close neighbor to this project, I was disappointed to read Victoria Park had given up the ghost. I had hoped that it could remain on life support until the new Mississippi Market, Trade Joe’s, etc could be completed to spur interest.

    It is hard for me to not lay some of the blame at the foot of special interests that blocked its start for almost two years. That time it languished in court was precious and could have given the project some real traction before the housing bubble burst.

    I also do not understand why they started with development of the homes in the middle of development. I remember driving by prior to the Shalom Senior Development being built and just thinking how lonely those expensive townhomes looked in the middle of the gargantuan, otherwise empty development. Why not start with the area overlooking the Mississippi River to get some $ in and give perspective buyers a sense of security that the project would not go belly-up? Alternatively, why not start with the condo/apartment sections of the development that would have had lower cost of entry (Is that the right phrase?) to get a larger head-count into Victoria Park to provide quicker money infusion. I love West Seventh, but people who buy there (including me) are not looking for something akin to an area like Lake of the Isles, and those townhomes are out of reach for most people living close by and many people nationally.

    One of the reasons I settled in the West Seventh/Fort Road Federation neighborhood five years ago was its people: proud, hard working, mostly blue-collar folks that have long roots there (again, me, too) and would work to keep it a great place to live. I only hope that future developers can figure out an equally appealing project.

    Let’s just pray that the Schmidt Brewery does not befall the same fate as Victoria Park and Island Station.

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