April 24, 2023

A former city-owned parking lot downtown is about to turn into a multi-storied mixed-use project, while other city-owned parcels have been gaining interest slowly.

The One2 is being developed by Green Acre Real Estate and Lloyd Cos. It’s along 12th Street between First and Second avenues and will include 175 studio through three-bedroom apartments.

Part of the property is a former city-owned parking lot, but the site also includes buildings that will be demolished in the next few weeks.

“We’ll commence demolition, start removing the parking lot on the First Avenue lot, and then we should be wrapping up our final building permits and getting ready to go vertical,” said Luke Jessen, vice president of development at Lloyd Cos.

Depending on which side of the building you’re looking at, it either will be six or seven stories high to account for the difference in grade on the site, which also will include underground parking for 230 vehicles.

The apartment mix is “trending pretty heavily toward the one-bedrooms and studios,” Jessen said.

Amenities will include a fitness center, community room, elevated courtyard and dog park.

“The location is really great off the 12th Street Plaza between the Dakota News Now building and the federal courthouse. We just feel like that space has a direct connection to Phillips Avenue, which we think gives it that fun activity while somewhat being set off, but you’re right there close to everything going on on Phillips with easy access to the core of downtown.”

There’s also retail space on the first floor offering about 3,000 square feet.

“I could see anything from small retail to a brewery or small bar or even an office,” Jessen said. “The options are kind of endless there, but we hope it’s something fun and interactive that takes advantage of the bump-outs that are going to go in to help activate Phillips Avenue further into downtown.”

The plan is to open the One2 in early 2025.

Other city-owned property is still on the market — including the opportunity to privately develop the area around the city’s parking ramp along 10th Street east of Phillips Avenue. The city opened up applications for developers in November 2022, and the plan had been to begin reviewing them in early 2023.

“We’re in discussions with people, but we still haven’t received any firm proposals,” Mayor Paul TenHaken said. “To me, that’s just indicative of the economy and the market we’re in.”

The challenge of financing and construction costs is apparent, he said.

“If we had a two-years-ago economy today, we’d be announcing a tenant on there,” he said. “The cost of building a hotel on top of our parking ramp right now, given some of the other downtown properties, there’s just a lot of uncertainty that needs to shake out.”

The parking ramp itself is occupied enough that it is cash flowing and servicing its debt, TenHaken said.

“So the only thing being lost is potential opportunity … but it’s really not there. It’s really not hurting anyone other than aesthetics,” he said. “We have an incredible investment that we’ve made that at the right time we’ll be able to get a good ROI on, and we’re not going to rush it.”

The city continues to work with Iowa developer Christensen Development on a project that would involve 4.6 acres of city-owned former rail yard land south of Eighth Street, including office, retail and apartments.

The city hears from owner Jake Christensen “on a regular basis,” said Jeff Eckhoff, director of planning and development services. “It’s just a tough time right now with the financing market, but there is strong interest. He’s got some tenants he’s very close with, and as soon as he gets enough of the project tied up, he’ll move forward.”

At that point, the city expects to see a final design to move forward with its negotiated sale, Eckhoff said.

“He’ll do the office part first, and multifamily will follow,” he said. “The market has changed, but he’s very much engaged.”