The Saint Paul Condo Blog

The Commerce Building celebrated its Grand Opening on Monday.  The building has been operating since June as an apartment building, but Monday was the big party.  They completed "phase 1" of the building which consisted of 55 apartments on floors 7-12.  Phase 2 with complete the lower portion of the building with an additional 45 units and a fitness center, movie room, business center, and more.

The Commerce building was partly financed by tax credits, meaning any perspective tenant needs to meet certain financial requirements (read: you can't make too much money).  After talking with the building manager for a little while, I started to wonder how people afford the rent they were asking with the caps that are in place.  A single person can make nor more than $33k a year.  A two person household = $38k, three people was $42k I believe.  OK, so I can see a single person paying $875 for an apartment, but $1075 a month for a two bedroom I just don't see how it's possible?  That seems like a really high rental amount based on a two or three person household income caps.

Ok, enough of that!  On to the good stuff.  I was really impressed with the finishes of the apartments; nice cabinets, terrazzo floors, and District Energy for heating and cooling, and really solid doors (no hollow core here!).  When the real estate market corrects, look for this on the conversion list.

The House and Senate both passed legislation that will help the mortgage market and FHA.  The president is expected to sign this into law.  Here are the bullet points courtesy of the National Association of Realtors:

• GSE Reform – including a strong independent regulator, and permanent conforming loan limits up to the greater of $417,000 or 115% local area median home price, capped at $625,500.  The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).

• FHA Reform – including permanent FHA loan limits at the greater of $271,050 or 115% of local area median home price, capped at $625,500; streamlined processing for FHA condos; reforms to the HECM program, and reforms to the FHA manufactured housing program. The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).

• Homebuyer Tax Credit - a $7500 tax credit that would be would be available for any qualified purchase between April 8, 2008 and June 30, 2009.  The credit is repayable over 15 years (making it, in effect, an interest free loan).

• FHA foreclosure rescue – development of a refinance program for homebuyers with problematic subprime loans. Lenders would write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. Borrowers would have to share 50% of all future appreciation with FHA. The loan limit for this program is $550,440 nationwide. Program is effective on October 1, 2008.

• Seller-funded downpayment assistance programs – codifies existing FHA proposal to prohibit the use of downpayment assistance programs funded by those who have a financial interest in the sale; does not prohibit other assistance programs provided by nonprofits funded by other sources, churches, employers, or family members. This prohibition does not go into effect until October 1, 2008.

• VA loan limits – temporarily increases the VA home loan guarantee loan limits to the same level as the Economic Stimulus limits through December 31, 2008.

• Risk-based pricing – puts a moratorium on FHA using risk-based pricing for one year.  This provision does will be effective from October 1, 2008 through September 30, 2009.

• GSE Stabilization – includes language proposed by the Treasury Department to authorize Treasury to make loans to and buy stock from the GSEs to make sure that Freddie Mac and Fannie Mae could not fail.

• Mortgage Revenue Bond Authority – authorizes $10 billion in mortgage revenue bonds for refinancing subprime mortgages.

• National Affordable Housing Trust Fund – Develops a Trust Fund funded by a percentage of profits from the GSEs.  In its first years, the Trust Fund would cover costs of any defaulted loans in FHA foreclosure program.  In out years, the Trust Fund would be used for the development of affordable housing.

• CDBG Funding – Provides $4 billion in neighborhood revitalization funds for communities to purchase foreclosed homes.

•  LIHTC – Modernizes the Low Income Housing Tax Credit program to make it more efficient.

• Loan Originator Requirements – Strengthens the existing state-run nationwide mortgage originator licensing and registration system (and requires a parallel HUD system for states that fail to participate).  Federal bank regulators will establish a parallel registration system for FDIC-insured banks.  The purpose is to prevent fraud and require minimum licensing and education requirements.  The bill exempts those who only perform real estate brokerage activities and are licensed or registered by a state, unless they are compensated by a lender, mortgage broker, or other loan originator.

Our First Video Blog Post... What do you think?

EDIT:  Changed video server...again.

Thanks again to Dan for sparking another blog post for me!

I thought I would recap the status of the failed projects that Downtown has seen in recent years.  Some of them you'll know, others were really under the radar.  I will try and order these by failure date, but there's no guarantee that it's accurate.

Sibley House
Sibley House was to be a new construction high-rise tower at the corner of 4th and Sibley.  For those of you familiar with the area, it's the tot-playground - or as my daughter calls it, "the train park".  This project singlehandedly sparked the residents of downtown to get the park out of the hands of the HRA (Saint Paul Housing & Redevelopment Authority) and permanently over to Parks and Rec.  A battle that wasn't won until recently.  The development died in late 2001, early 2002.  The developer (GMT Corporation, the original developer behind River Park Lofts) cited higher steel costs and lack of financing for high-rise construction in the post 9/11 era.  What ever the reason, it would have been an unique building!

Lower Town Depot
Lower Town Depot is the abandoned building located on the Bruce Ventos Nature Trail, just east of Downtown.  The concept was pretty cool, a self sustaining condominium just steps from beautiful trails.  Not really sure what knocked off this project, but I heard rumors there was infighting between the development partners.  The location has it's pluses and minuses.  The plus was obviously the nature trail, the minus was it's in the middle of a sea of train tracks and near a waste water treatment facility.  If this building wasn't all by itself, this project may have seen more interest.  It's hard to be self sustaining, when every time you need something you have to hop in a car.

Island Station
If there were one project that really had a unique product to pitch, this was it.  Even the marketing was very clever!  Who wouldn't want to live in a converted power plant on the river???  The building was going to be pretty upscale, which netted a lot of big name buyers - at first.  The project was hugely expensive, converting an old power plant into condos was not an easy task.  Which is why more condos in this development were to be located in two new construction buildings on the property.  Other unique aspects to the development was the private marina.  If I remember correctly each boat slip was being offered at $100,000!  I think a couple of things that canned this project were an inexperienced developer (banks were very hesitant), and the fact that the property required a new levee surrounding it to get floor certification.  Prior to being marketed it was a community for squatters.  Lots of them, some with boats!  It looks as f the squatters haver returned, minus the boats this time.

West Side Flats
I would guess at some point in the future, West Side Flats will be risen from the dead.  This project flopped because of design.  The design was great, just too tall.  It took many months to come to an agreement with the city with regards to how tall a building could be on the "wrong side" of the river.  Once everyone came to terms with that, they hit the wall with timing.  Writing was on the wall with the market conditions and they made the right decision to not build.

Minnesota Building
The Minnesota Building was in the early stages when it was canned.  They went as far to draft up plans, but never began marketing the building.  I still suspect that the building will show up as rentals down the road.  One main reason this project was nixed before it started - parking!  The ramp that is attached is not owned by the building, and with what they needed to get on a price per square foot basis, they would have to have parking with it, owned.

Commerce Building
The Commerce Building was pretty far along when the decision was made to convert to apartments instead.  Again, parking was an issue.  When the boom market returns, look for this building to be converted to condos.  The Apartments are having their grand opening in August, I believe.

Bonnie Jean Flats
Ahh, Bonnie Jean Flats, I've got some fond memories there (that was typed with a sarcastic tone)!  We were called in, as a last ditch effort to sell the 13 units of this building.  The developer (well, one of the partners at least) was trying to sell these for a full year before he called us in.  Too little, too late.  As the development partnership crumbled, the project was put on ice while the partnership was dissolved.   The building now is rental with a option to purchase.  The risk with this is your are buying a single unit in a rental building.  Unless of course everyone exercised their option.  Also, financing would be very difficult, if not impossible with this setup.

The Bridges of Saint Paul
The Bridges was such an amazing development to watch!  From the beginning, the developer had his vision in mind, and no one was going to tell him differently (sometimes that's good, sometimes that's bad).  The saga was almost movie worthy.  From neighborhood associations being taken over from "concerned citizens" or workers of the development, to the show downs in the press between the City and the developer.  I've never in my life seen so many full color, full page ads for a development EVER!  At one point, it almost looked like the developer was going to run for office just to get the project through!  What finally killed the deal was the zoning request denial.  At issue was the scale of the project and being located on the "wrong side" of the river (sound familiar?).

Farmers Market Flats
Sometimes you just can't win!  We represented this development at the beginning of the project, sold enough to start construction, but more delays started to pop up.  After we decided it was best we part ways, the development stalled.  The builder stopped construction, claiming the developer didn't have the funds to pay him, or sustain the project.  The developer, with the City's permission, fired the builder and hired a new one.  That's when the lawsuits started - First the builder sued the developer and the City for breech of contract (aka, being fired).  Then the whopper of a lawsuit - The City sued the builder for fraud!  Expect the hole in the ground at 5th and Wall to be there for quite some time.  In my opinion, these lawsuits will drag on for years.  :(

The Penfield
If the Penfield has started 6 months to a year earlier, we would be selling units in this project at huge discounts.  That would still be better than having a near abandoned sales center surrounded by dead grass.  The Penfield really went through a slow and agonizing death.  The rumors were flying for at least 9 months!  There were talks about adding a grocery story and a hotel to help reduce the number of condos in the project, but it wasn't enough to save it from the market downturn.  The developer is supposedly resubmitting a new plan to the city - this one with NO condos.  I do hope something can get built on the site, but I have a feeling it won't be nearly as grand as the condo version.

[Image of head house restaurant coming soon]

I heard today that the restaurant that was planned for the head house at Upper Landing has backed out of the deal.  Not surprising, giving the other restaurant news lately.  The interesting thing is what will happen with the space now.  Rather than leave it vacant in hopes of landing a restaurant in the future, the developers of Upper Landing will convert it in to a semi-rest stop for people enjoying the miles of trail that line the Mississippi River.

I can kind of understand why a restaurant would not want to open in the space just given the physical disconnect between Upper Landing and Downtown (funny part about that is Downtown is at a higher elevation than Upper Landing, I know it has to do with position on the river, but I still think it's comical).  The good news is the developer still plans on making a museum out of the actual head house.  I can't wait until it's all ready to go!

I thought I'd start a Hot List.  A list of properties that I think are a remarkably good deal.  Per the rules that govern realtors, I can not post information regarding listings that are not mine.  So if you want my list of "Hot Properties", just click the link below and I will send it over to you.

I will tell you, a few of the properties that I thought were a hot deal have sold within a week or two, buyers are on the prowl for a good deal!  So act quickly!

Yes, send me the Hot List!

I'm just about out the door, heading out to Wannamingo to celebrate the fourth with family.  As you celebrate with yours, have fun and be safe.

Happy 232nd Birthday America!

So here's the question at hand - does the increasing cost of fuel drive your decision making process?  I was recently asked this question from a reporter from the Pioneer Press about an article she was working on.

I seem to have the lone voice of dissent.  NO.  From the buyers that I have talked to, $4 a gallon for gas does not come up.  Being closer to work to avoid a long commute still seems to be a bigger trigger.  As much as people complain about the high cost of gas, I'm not seeing people change their choice of homes.  The nightmare that's called rush hour seems to be a bigger motivator, in my opinion.

What's your opinion?  Comment below and let's see where this takes us.

Sounds like the owners of NALAPAK in Minneapolis will be opening a new restaurant in downtown.  They hope to open in the Produce Exchange building, next to Jimmy John's Sub Shop and the newly opened Liquor Vault (don't get me started).  Not to knock a hopefully new restaurant, but it seems like there are numerous other locations that would be more fitting to an establishment as nice as Nalapak.  The old "A Night's Tale" space on Mears Park comes to mind.  Even the the newly renovated space along 9th and Jackson would seem more ideal.

I wish them luck in what ever location they select!

That is what I truly want to be...


I saw this parked outside of Embassy Suites in Downtown early Saturday morning.  When I went back home to grab my daughter, they were off.  I was trying to explain to my daughter what a weinermobile was, but at 4 that's hard.  She really didn't believe me there was a truck that looked like a hot dog.  So on Sunday night I was walking by Embassy Suites again - and alas, there they were!  So this time I scrambled back to the condo, grabbed Amelia out of bed, and brought her down here.

She's a believer now!

...'Cause if I were an Oscar Mayer wiener - Everyone would be in love with me!