Another Downtown Condo Project Canceled

Downtown Journal reports that David Bernard Builders, a division of Rottlund, has terminated its development agreement with the City of Minneapolis and given up rights to a parcel of land along the riverfront, near the Guthrie Theatre. Here's the meat:

David Bernard Builders, a division of Rottlund Co., needed to sell 40 percent of the proposed 107 units to secure construction financing. The five-story project netted 16 sales and four reservations, and the sales center closed in the spring of 2007 after a little more than a year on the market.

The developer held on to the land rights for nearly four years before dropping redevelopment plans in January.

Michael Noonan, division president of Rottlund Homes, said one factor in the decision to cancel the project was city officials’ desire to designate about 30 feet along Chicago Avenue for open space that would preserve a view corridor to the Guthrie. He said they parted ways when the city refused to allow Rottlund to extend the development contract at no additional cost.

Crowther said the city does not have any immediate plans for the site other than to keep it clean and maintain the grass the developer has planted. She said city officials might offer the property back to the market in the future, but they have no plans at the moment.

This is the third lot on the riverfront that a condo developer has returned to the city. Brighton Development suspended plans last fall for the Portland, a five-story condo building at South 2nd Street and Portland Avenue, as well as Washington Live-Work at the corner of Portland & Washington, a site initially slated for condos and then commercial space. City staff have said they plan to eventually bring those sites back to the market for redevelopment.

Man, this condo shakeout was easy to predict. I think I read somewhere (but can't find the link now) that more than 4,000 new units were planned to be built between 2005 and 2010 in Minneapolis. No way that kind of condo development could be supported even in boom times -- this is a single-family housing kind of town. But for those of us who would enjoy the urban appeal of a downtown condo, it might be good news a couple years down the road, as it appears the condo market has already reached saturation.