MBEX Has the Scoop

Building Buzz: January 8 - 12

We're reading the headlines so you don't have to!

From projects in development and under construction, economic outlooks for 2024, and new federal rulings on independent contractor classifications, here's what was buzzing in the building world from the week of January 8-12, 2024:

 

Construction outlook for 2024 a mixed bag as contractors struggle to attract, retain labor
Labor has been consistently cited as a top challenge for general contractors, an issue that long predates the Covid-19 pandemic. The construction industry added 17,000 net jobs in December, part of what was a stronger-than-expected jobs report released late last week by the U.S. Bureau of Labor Statistics. Between December 2022 and December 2023, industry employment grew 2.5%, to 197,000 new jobs, according to an analysis of BLS data by industry trade group the Associated Builders and Contractors. Still, the unemployment rate in construction continues to outpace the national unemployment rate, at 4.4% in December compared to 3.7%. (1-8-2024  |  Minneapolis-St. Paul Business Journal)
 

Labor crunch will continue to squeeze contractors
Nearly 8 out of 10 respondents to a new Associated General Contractors of America survey said they have a hard time filling salaried or hourly craftworker positions, but 69% still said they anticipate a "total increase" in headcount. A fifth of respondents said it will get harder to hire in 2024. Nonetheless, contractors will need those workers. In 14 of 17 sectors, respondents anticipated the dollar value of project they compete for to increase this year compared to 2023. (1-8-2024  |  Construction Dive)
 

Plan for 255 new homes advances in Lakeville
TEG Land Holdings LLC, an entity related to Twin Cities Land Development, wants to develop 255 new homes, including 127 attached townhome lots, 99 detached "villa" lots, and 29 single-family home lots, on a site north of 205th Street and west of Interstate 35. The Lakeville Planning Commission unanimously recommended approval of a revised preliminary plat for the development, known as Ritter Meadows. The plans will be up for review at the January 16th City Council meeting. (1-8-2024  |  Finance & Commerce)
 

Costco plans a store in Ostego along I-94
Costco Wholesale Corp. wants to build a store on a vacant property on the edge of Albertville and Ostego near Interstate 94. The retailer submitted a development application to the city of Ostego, according to City Administrator Adam Flaherty. City Planner D. Daniel Licht said the application will be tentatively considered at the February 5th Planning Commission meeting. The site is north of 60th Street Northeast between Interstate 94 and Maciver Avenue North. The development application shows the building will be about 164,000-square-feet and includes a parking lot with 938 stalls. (1-9-2024  |  Minneapolis-St. Paul Business Journal)
 

LGBTQ+ workers expect more inclusivity from employers
Every year, more and more companies seem to recognize Pride Month. But a recent analysis shows that LGBTQ+ workers expect more than this once-a-year acknowledgement from their employers. In fact, some employees actually criticize such behavior as mere pinkwashing. So, what do LGBTQ+ workers want? In 2023, the jobs website Indeed conducted a survey of LGBTQ+ full-time workers from across the U.S., and the results provide a clear picture of their needs. (1-9-2024  |  Finance & Commerce and The Conversation website)
 

Met Council hikes Southwest Light Rail budget to $2.86B
Officials leading the Southwest Light Rail project said that the cost to build a 14-mile train link between downtown Minneapolis and Eden Prairie has risen to $2.86-billion. The rail line's price tag has steadily increased over the years as its timeline has stretched out. What was once pitched as a $1.3-billion project, to be completed by 2018, is now expected to take until 2027. The ballooning budget has drawn scrutiny from legislators and auditors. A report last year criticized the Council for not holding contractors accountable for overruns. (1-9-2024  |  Minneapolis-St. Paul Business Journal)
 

Minneapolis called a model for housing development
Other cities take heed of Mineapolos and its zoning regulations. At least that's what researchers at the Pew Charitable Trust are saying in a report published last week. The report by the nonprofit's housing team says Minneapolis' zoning code adjustments have helped it better tackle housing issues while other major U.S. cities have fallen behind. (1-9-2024  |  Finance & Commerce)
 

New federal rule on independent contractors could trigger wave of lawsuits against businesses
Companies will potentially have a harder time classifying millions of workers as independent contractors under a new Department of Labor final rule. The new rule expands the so-called "economic reality" test so that employers have to weigh a wider variety of factors when classifying workers, including how much control the worker has over their schedule and their employment, how permanent their employment is, and how integral their work is to the work of the company, among the six factors employees must consider. (1-9-2024  |  Minneapolis-St. Paul Business Journal)
 

New labor rule tightens worker classification standards
The Biden administation entacted a new labor rule that aims to prevent the misclassification of workers as "independent contractors," a step that could bolster both legal protections and compensation for millions in the U.S. workforce. The Labor Department rule, which the administration proposed 15 months ago, replaces a scrapped Trump-era standard that lowered the bar for classifying employees as contractors. Such workers neither receive federal minimum wage protections nor qualify for employee benefits, such as health coverage and paid sick days. (1-9-2024  |  Finance & Commerce)
 

Construction planning numbers end 2023 on a high note
The Dodge Momentum Index, a benchmark that measures nonresidential construction planning, closed out the year with a 3% jump in December, buoyed by data center growth, according to the Dodge Construction Network. Over the month, both commercial and institutional planning improved 1.0% and 6.1% respectively. The gain reversed the 1.4% drop in November, when a slowdown in commercial planning pushed the index down, accroding to Dodge. That indicates support for construction activity this year, said Sarah Martin, associate director of forecasting for Dodge Construction Network. (1-10-2024  |  Construction Dive)
 

Duluth hotel development site sold in $2.7M deal
In a deal worth more than $2.7-million, Kinseth Hospitality Cos. has sold land in Duluth to D & D Real Estate Holdings, according to public documents. According to the documents from the Duluth Planning Commission, the land is for a four-story, 100-room TownPlace Suites by Marriott on Sundby Road north of West Page Street. The tract of land that has been traded is one that's been highly contested throughout the years. Neighbors and environmentalists are worried about the harm the development may cause to a creek near the land. The Duluth Planning Commission opted to require an Environmental Assessment Worksheet, or EAW, for the property. (1-10-2024  |  Finance & Commerce)
 

Eagle Brook gets green light for megachurch in Plymouth
After a divided vote from the Plymouth City Council, Eagle Brook has a clear path forward to construct a 64,000-square-foot church on a 53-acre site at 17910 Chankahda Trail. The megachurch threatened to sue the city if the council rejected the plans. The Council's 3-3 vote on a resolution opposing the project means the project can advance. Residents opposed to the project cite concerns about traffic, the size and scale of the building, and more. City staff recommended denial of the church's request for rezoning, preliminary plat, site plan, and other approvals. (1-10-2024  |  Finance & Commerce)
 

New Northtown owner plans more improvements at Blaine shopping mall
Felix Reznick, principal at 4th Dimension Properties, is adding an Imagination Station play area for children to the former D'Moxi space across from the food hall. The Imagination Station has a climbing area and other topys to keep kids busy. It doesn't pull a profit but could help attract more shoppers.  (1-10-2024  |  Minneapols-St.Paul Business Journal)
 

New St. Cloud mall owner: 'The dinosauers are dying'
The new owner of the 1980s-vintage Midtown Square mall in St. Cloud has big plans to turn the half-empty retail center into a multipurpose hub for everything from indoor sports to flex light industrial uses. An entity related to Brait Capital of Edina paid $8-million for the mall property at 3333 Division Street West, according to a certificate of real estate value made public. Lighthouse Management Group Inc. of St. Cloud is the seller. (1-10-2024  |  Finance & Commerce)
 

Biden awards $623M to states, tribes to build EV charging network
The Biden administration is awarding $623-million in grants to help build an electric vehicle charging network across the nation. Grants will fund 47 EV charging stations and related projects in 22 states and Puerto Rico, including 7,500 EV charging ports, officials said. Congress approved $7.5-billion in the 2021 infrastructure law to meet President Biden's goal of building out a national network of 500,000 publicly available chargers by 2030. The charging ports are a key part of Biden's efforts to encourage drivers to move away from gasoline-powered cars and trucks that contribute to global warming. (1-11-2024  |  Finance & Commerce)
 

Downtown Rochester luxury apartment fetches $37M
A luxury apartment building in downtown Rochester has a new owner in Northland Investment Corp., according to public documents. The Maven on Broadway, a six-story, 154-unit multifamily complex was purchased by the Newton, Massachusetts-based firm for $37.7-million. The seller is another Massachusetts group, Berkshire Resiential Investments, which is based in Boston. (1-11-2024  |  Finance & Commerce)
 

Milwaukee could finally take control of and redevelop Northridge Mall
The city of Milwaukee could take control of the abandoned Northridge Mall by the end of January and demolish the building in the summer. If the city acquires the vacant property through foreclosure, it would be an end to years-long litigation between the city and mall owner U.S. Black Spruce Enterprises. After the city issued a raze order in 2019, the mall has been the subject of city and state court cases, and incidents of both trespassing and arson. (1-11-2024  |  Finance & Commerce)
 

Lawsuit between Doran Special Projects, St. Paul apartment complex ends
A lawsuit between Bloomington-based developer Doran Special Projects LLC and Marshall Lofts LLC, the Hopkins-based business behind a St. Paul apartment complex, is over. Court records show that Doran moved to dismiss the lawsuit on December 12, 2023, after the case was referred to mediation on August 7, 2023. Doran first filed the lawsuit in June alleging Marshall Lofts never paid Doran for $812,798 worth of contracting work done at 2105 Marshall Avenue and 250 Finn Street in St. Paul. Those addresses are the locations of an apartment complex, also called Marshall Lofts, as well as an adjacent residential rental building called The Finn.  (1-12-2024  |  Minneapolis-St Paul Business Journal)

Building Buzz: December 25 - 29

We're reading the headlines so you don't have to. From projects under construction, federal funding allocations, and employment reports, here's what was buzzing in the building world during the week of December 25 - 29, 2023:

 

Wayzata Schools buys Optum subsidiary Solutran's ex-Plymouth headquarters
The school district bought the two-story, 32,000-square-foot building, located at 13305 North 12tth Avenue for $7.75-million, according to a public real estate filing with the Minnesota Department of Revenue. (12-20-2023 | Minneapolis / St. Paul Business Journal)

Big deals found in multi-family, but 2023 still lags behind 2022 market
There is one thing to be said about the 2023 multi-family / apartment market: Nothing came close to the sale of the Berkman apartments in 2022. The Rochester apartment has kept its spot in the history books as one of, if not the highest single-asset multi-family transaction in Minnesota. 

But this year's champion for highest-value transaction belongs to Weidner Apartment Homes for the eight-building Inspire Apartments in Minneapolis' Uptown, which, if they had been bought at their taxable value of $162-million, would have put it up near the Berkman transaction. But they were bought at the relatively modest price of $111-million, a bargain for the new owners. (12-22-2023 | Finance & Commerce) 

McAlister's Deli is headed to Mankato, then Twin Cities with 10-unit agreement
McAlister's Deli is making its Minnesota debut in Mankato with plans for further expansion in the state. The national deli concept joins the state with a 10-unit franchise agreement. Other target markets include Apple Valley, Burnsville, Rochester, Albert Lea, Faribault, New Ulm, Northfield, Owatonna, and others. McAlister's Deli will land at 1860 Adams Street next year. (12-22-2023 | Minneapolis - St. Paul Business Journal)

Milwaukee receives $4M for safe street upgrades
Milwaukee will receive a $4-million grant from the U.S. Department of Transportation as part of its "Safe Streets and Roads for All" grant program. The city will use the funds for a safe street program tied with goals to eliminate traffic deaths by 2037. (12-22-2023 | Finance & Commerce)

A wave of minimum wage increases is on the way in 2024
The highest minimum wage by state ringing in the new year will be Washington, at $16.28, followed by California, at $16. The District of Columbia saw its minimum wage increase to $17 on July 1, 2023. Many states have either scheduled increases into minimum wage laws or have pegged them to inflation, triggering automatic bumps in their minimum wage rates. Minnesota increases to $10.85 for employers with annual gross revenues of at least $500,000 and $8.85 for employers will revenues of less than $500,000. (12-22-2023 | Minneapolis / St. Paul Business Journal)

Wells Fargo economists: No 'Goldilocks' economy for you!
Wells Fargo economists may not be running victory laps just yet, but their call earlier this year for big rate cuts in 2024 is now closer to market consensus. Or rather, market consensus is moving closer to Wells Fargo's outlook. The bank's economists shed more light this month on their outlook for the year ahead, reiterating their earlier call that the economy will slip into recession in mid-2024. (12-22-2023 | Minneapolis - St. Paul Business Journal)

Electric vehicles owners and solar rooftops find mutual attraction
When Jim Selgo moved to his home in Goodyear, Arizona in 2019, he quickly had rooftop solar installed, having had a positive experience with solar at his previous home. Less than a year later, motivated to take more action to address climate change, he said, Selgo bought his first electric vehicle, a Nissan Leaf. He hasn't paid for electricity or gasoline since. (12-25-2023 | Finance & Commerce)

Office market sluggish in 2023
"Flight to quality" continues to be the term to define the 2023 office market, with many companies scrambling to reduce their footprint, but to do so in buildings with the best amenities available/ But the year's capital market tells a different story. The second half of 2022 was described to Finance & Commerce as "pencils down" as interest rates continued to increase. That narrative continued this year, as transactions overall saw a dramatic fall. 2023 saw one transaction that breached $100-million. The next hightest? $50-million. Some office buildings, left behind by their traditional users, have been purchased to be converted into an apartment or a warehouse. (12-25-2023 | Finance & Commerce)

Solar canopy approved at Wisconsin union training center
Greenfield officials gave a thumbs up to the International Brotherhood of Electrical Workers (IBEW) Local 494's proposal to build a solar power canopy over part of its training center parking lot. The union wants to install a 104-foot by 20-foot solar structure to train apprentices and offset 90% of the training center's electrical usage, according to a city staff report. The size of the structure, which will be wide enough to cover 11 parking spaces, is based on the building's electrical usage. (12-25-2023 | Finance & Commerce)

DJR founder Dovolis urges architects to take risks
Is Dean Dovolis an architect or an inventor? Dovolis, founder and owner of Minneapolis-based DJR Architecture, appears to be embracing both roles as he devises new ways to team with partners to tackle affordable housing, economic and other disparities, and urban agriculture. (12-25-2023 | Finance & Commerce)

Construction economists cautiously optimistic for 2024
As the end of 2023 edges closer, experts shared their views on the state of the construction industry going forward. According to experts from the nation's leading contractor associations, certain parts of the construction industry fixated on manufacturing and infrastructure will continue to see prosperity, while some challenges like labor shortages will still likely be universal in 2024. One thing experts rejoiced about? The slowing of the Federal Reserve's interest rates; in mid-December, Jerome Powell, chair of the Fed, announced rates would stay between 5.25% and 5.55%. (12-26-2023 | Finance & Commerce)

Industrial market dipped in 2023
Transaction volumes were down across the board in commercial real estate. But the industrial market faired better than other specialized classes. The high points of this year's market didn't come close to last year's highest trade. In a 17-property portfolio trade from Artis REIT to Capital Partners and Investcorp, last year's highwater mark was $248.9-million. This year's was a seven-building recapitalization deal work $88-million between PCCP and Eagle Realty, while Capital Partners stayed invested in the property. (12-26-2023 | Finance & Commerce)

CP, West Development pitch three-building industrial project in Rogers
A pair of developers are proposing a new three-building, 557,000-square-foot industrial development in Rogers. The project, led by a joint venture between St. Louis Park-based West Development and Minnetonka-based CP Development, would be situated on a 45-acre vacant property along Highway 1010 and abutting the Crow River. (12-27-2023 | Minneapolis / St. Paul Business Journal)

Industrial development planned for Rogers
As detailed in an environmental assessment worksheet, the location of the development would be near the intersection of 147th Avenue and State Highway 101 in Rogers. The plot of land does not have an assigned address and is valued at $5.45-million, according to Hennepin County tax information. (12-27-2023 | Finance & Commerce)

Notable projects finished in 2023
Heading into 2023, Minnesota's construction industry wasn't exactly bubbling over with enthusiasm about market conditions for the coming year. Even though any eagerness was tempered by rising costs, labor shortages, and other headwinds, the past year saw work completed on some key public and private sector projects. Let's take a backward glance at a few of those projects. The list isn't comprehensive, but it offers a snapshot of notable projects in both the vertical and highway sectors. (12-27-2023 | Finance & Commerce)

WisDOT's year in review touts 350 road safety projects
The Wisconsin Department of Transportation (WisDOT) was busy in 2023, including completing the final leg of the Zoo Interchange and securing hundreds of millions of federal dollars coming to state road projects. Among the transportation agency's year in review was a third year of state transportation funding increases, money for studying more passenger rail routes and more than 350 projects funded for safety and road improvements. Several key items on WisDOT's end of year list were tied to the influx of federal funding for infrastructure projects. (12-27-2023 | Finance & Commerce)

The year in clean energy: Wind, solar and batteries grow despite economic challenges
Led by new solar power, the world added renewable energy at breakneck speed in 2023, a trend that if amplified will help Earth turn away from fossil fuels and prevent severe warming and its effects. Clean energy is often now the least expensive, explaining some of the growth. Nations also adopted policies that support renewables, some citing energy security concerns, according to the International Energy Agency. These factors countered high interest rates and persistent challenges in getting materials and components in many places. (12-27-2023 | Finance & Commerce)

Checking in on RiverNorth development plan
ION is building a $30-million manufacturing facility as part of a planned company expansion and relocation. Located on a 1.1-acre parcel at 201 West Broadway Avenue between Second Avenue North and Washing Avenue North, the new building will have 5,000-square-feet of office space on the ground floor and a much larger amount of production space on two floors above. An aboveground parking structure will attach to the building's rear. Groundbreaking is expected in October 2024. (12-28-2023 | Finance & Commerce)

Kelly Doran, Twin Cities real estate developer, passes away at 66
Twin Cities real estate developer Kelly Doran, who founded both Doran Cos. and Doran Group, died overnight on December 28, 2023, following a fight with cancer, a press release from the Doran Group announced. He was 66 years old. Doran, born in Duluth, was a leader in the multi-family housing industry, as well as in retail space. In 2007, he founded the powerhouse commercial real estate firm Doran Cos., which has three divisions --- Doran Development, Doran Construction and Doran Management. (12-28-2023 | Finance & Commerce)

New Milwaukee museum shifts groundbreaking as it pursues fundraising goals
The museum wants to move the current building from 800 West Wells Street and build a 200,000-square-foot, six-story museum in the nearby Haymarket neighborhood. At a Milwaukee County board meeting, museum officials said deferred maintenance added up to $100-million and noted aging infrastructure such as failing elevators, escalators and a water tower. The new $240-million natural museum will break ground next spring. (12-28-2023 | Finance & Commerce)

Big projects to watch in 2024
The coming year could be eventful for at least some construction businesses in Minnesota. State and federal funding is advancing housing projects, infrastructure work, and other construction in the metro area and beyond. In December, Minnesota Housing announced nearly $350-million worth of funding for affordable housing statewide. Labor costs, workforce availability, inflation and other concerns are still hanging in the air. But in general, the outlook for 2024 is "slightly more positive" than it was for 2023, according to a recent Associated General Contractors of Minnesota survey of construction businesses. (12-29-2023 | Finance & Commerce)

Minnesota State Office Building project will cost $454M; here's what that price includes
The Pioneer Press has a report on the big-dollar renovation and expansion of the 290,000-square-foot building near the State Capitol. The project, already underway, promises to expand the building to more than 456,000-square-feet, repair decaying plumbing and electrical systems, and improve accessibility and security for the 90-year-old property that serves as offices for state House members and the Minnesota Secretary of State. The nearly $500-million overhaul of the Minnesota State Office Building isn't expected to be finished until 2027, but expect to hear a lot about it between now and Election Day 2024. (12-29-2023 | Minneapolis / St. Paul Business Journal)

Building Buzz: December 18 - 22

We're reading the headlines so you don't have to. From projects under construction, federal funding allocations, and employment reports, here's what's buzzing in the building world from the week of December 18 - 22, 2023:

Highway 210 project receives federal funding
The upcoming Highway 210 / Washington reconstruction projects in Brainerd received federal funding. U.S. Senator Amy Klobuchar and Tina Smith announced on December 11th, the U.S. Department of Transportation awarded $25-million to the project. The money is provided through the department's Multimodal Project Discretionary Grant program, and it will allow the Minnesota Department of Transportation to address safety concerns along the thoroughfare. The project --- estimated around $45-million --- is planned for 2026-2027 and will see the reconstruction of Highway 210 / Washington Street between Baxter Dreive and Pine Shores Road in Brainerd. (12-11-2023 | Brainerd Dispatch)

Catalyst Construction breaks ground on Mayfair Medical Commons
Milwaukee-based developer Irgens announced construction has started for Mayfair Medical Commons, a new 45,823-square-foot medical building in Wauwatosa. The building is part of a larger redevelopment planned for a prime infill site south of the Research Drive entrance into the Milwaukee County Research Park, officials said. The project calls for a two-story, steel frame structure with a flexible interior design. Ample signage will give many users bidding opportunities, less than a mile from the Milwaukee Regional Medical Center and access to Interstates 94 and 43. The Sigma Group provided civil engineering services. (12-12-2023 | Daily Reporter)

Enclave Cos. pitches 200 apartments, day care in Bloomington
Enclave Cos. is proposing to construct a 201-unit apartment building and detached day care in Bloomington. The Fargo, North Dakota-based developer is expected to present plans to the Bloomington Planning Commission next week. The project is proposed for a vacant site located at 6701 West 78th Street, which once housed a Life Time Fitness facility, according to city documents. The property owner is a business entity tied to Chanhassen-based Life Time. (12-15-2023 | Minneapolis / St. Paul Business Journal)

Minneapolis secures $20M for traffic safety measures
The U.S. Department of Transportation recently awarded the city of Minneapolis $20-million as a part of its "Safe Streets and Roads for All" grant program. The city will put the funds toward its Vision Zero program, which aims to reduce traffic collision deaths to zero by 2027. (12-15-2023 | Finance & Commerce)

The 2021 infrastructure bill put $5B toward and EV-charging network. The first station just opened.
On the western outskirts of Columbus, Ohio, two doors down from a Waffle House, is a truck stop that, as of recently, has the first electric vehicle charging station in the country to be financed in part by the 2021 federal infrastructure law. The Pilot Travel Center at I-70 and U.S. 42 has four charging ports. They are part of a partnership between General Motors and Pilot that the companies say will lead to chargers being installed at 500 Pilot and Flying J locations. (12-16-2023 | Fast Company)

Woodbury authorizes $800k clubhouse renovation at Eagle Valley Golf Course
The Woodbury City Council authorized a contract on December 13th with Minneapolis-based Kraus-Anderson Cos. Inc. to carry out an $800,000 renovation to the clubhouse at Eagle Valley Golf Course. The contract still needs to be signed by Woodbury's mayor and city administrator, which Dan Morris, recreation enterprise manager for the city, said he expected to happen this week. The $810,561 will come from the course's $2.8-million annual budget. (12-16-2023 | Minneapolis / St. Paul Business Journal)

Affordable housing project in Edina advances with MN Housing funds
Solhelm Companies' plan to bring 89 units of affordable housing to Edina appeared to be stuck in the mud just six months ago, but things are looking up as it's one of the big winners in the latest round of funding announced by Minnesota Funding. The project, known as 5780 Lincoln, will offer homes affordable to households at 50% or less the area's media income. The new apartment building will replace the old Londonderry Office Park at 5780 Lincoln Drive, as previously reported. (12-18-2023 | Finance & Commerce)

Alliant Energy completes 623-acre solar project in Wisconsin
Madison-based Alliant Energy announced the completion of a 99-megawatt solar array in Waushara County. "The completion of this project is a major accomplishment that will deliver safe, reliable, cost-effective energy to our customers for decades," Ben Lipari, assistant vice president of resource development at Alliant, said in a statement. (12-18-2023 | Finance & Commerce)

Convenience store chain making $151M of Wisconsin capital investments
Convenience store chain Kwik Trip plans to invest more than $151-million in an expansion of its Wisconsin operations, state officials announced. The company, according to the Wisconsin Economic Development Corp., intends to: (1) Expand its dairy, commissary and baking facilities in La Cross; (2) Purchase an renovate a commercial office building in Onalaska; and (3) Construct a new satellite distribution center. (12-18-2023  |  The Construction Broadsheet)

Glen Taylor to donate $172-million for Minnesota and Iowa rural development
Glen Taylor, the state's richest man and the current majority owner of the Minnesota Timberwolves/Lynx organization as well as the owner of the Star Tribune, announced that he is donating $172-million to support people in southern Minnesota and rural communities across Minnesota and Iowa. The donation is the first phase of a larger charitable plan to support childhood education, rural community-revitalization, environmental sustainability and the social well-being of families in need and aims to create financial framework to support these and other causes. (12-19-2023 | Minneapolis/St Paul Business Journal)

Kowalski's is headed to Ridgedale Center
Local grocer Kowalski's Markets is heading to Minnetonka's Ridgedale Center. The Woodbury-based grocery store will be located in the 25,600-square-foot space previously occupied by Sears Auto Center. The family-owned and -operated grocery store is set to open sometime in 2025. (12-19-2023 | Minneapolis / St. Paul Business Journal)

Minnesota DLI alleges 'widespread wage theft' on 19 projects
The Minnesota Department of Labor and Industry said that is has uncovered 'widespread wage theft and unlawful practice' on 19 construction projects throughout Minnesota, including the Viking Lakes mixed-use development in Eagan. As a result of a its investigation, the department said its seeking $2.4-million in back wages and liquidated damages from Property Maintenance & Construction LLC (PMC, also known as Property Maintenance and Construction Inc), and Advantage Construction Inc. (12-19-2023 | Finance & Commerce)

Prudential campus redevelopment clears Met Council hurdle
The Metropolitan Council's Community Development Committee recommended approval of a comprehensive plan amendment for a proposed redevelopment of the former Prudential campus in Plymouth, but the project didn't make the committee's list of sites recommended for environmental cleanup money. The amendment re-guides 75-acres on the site at 13001 County Road 10 from "commercial office" to "mixed use," and accommodates "future redevelopment of the site with a mixture of multifamily housing, retail/commercial uses, and a medical technical business park," according to a committee staff report. (12-19-2023 | Finance & Commerce)

Ex-Viking Tim Baylor buys South Minneapolis Burger King for mixed-use plan
Minneapolis-based JADT Development Group, led by founder and CEO Tim Baylor, plans to develop a mixed-use building at the site of a South Minneapolis Burger King that shuttered during the pandemic. The fast-food joint is now being torn down after the property sold last week for $1.15-million, according to a public real estate filing with the Minnesota Department of Revenue. The public filing notes that the restaurant will be transformed into a new 75-unit apartment building with first-floor commercial space. (12-19-2023 | Minneapolis / St. Paul Business Journal)

Beacon Interfaith project in Maplewood gets funding boost
Beacon Interfaith, a nonprofit affordable housing developer, announced 40 new units will be built in Maplewood after the group secured state funding for the project. The state funding is a part of the historic one-time $1.3-billion investment signed in by Governor Tim Walz in May. More specifically, the $14.8-million awarded to Beacon Interfaith is a part of $250-million designated for financing affordable multi-family housing, according to a press release from Beacon. The 40 homes will be a community called Gladstone Crossing at 1375 Frost Avenue. Half of the home will be designated for people with incomes that are 30% of the area median income, while the other half will be for people with incomes that are 50% AMI. (12-20-2023 | Finance & Commerce)

Luxury housing project in Inver Grove Heights lands $60-million in financing
Trident Development has closed on financing for a 244-unit luxury residential community that it's planning in Inver Grove Heights, near the Eagan border. JLL Capital Markets announced it worked on behalf of St. Cloud-based developer Trident to secure a $45-million construction load from Grand Forks, North Dakota-based Alerus Financial and $15.14-million in mezzanine financing from Minot, North Dakota-based Centerspace for its apartment and townhome project called Avalon Apartments and Townhomes (12-20-2023 | Minneapolis - St. Paul Business Journal)

Minnesota's 2022 work fatalities similar to 2021
The number of fatal work injuries on Minnesota jobsites in 2022 was roughly unchanged from with the previous year, according to a report released by the Minnesota Department of Labor and Industry. DLI, citing information from the U.S. Department of Labor, reported that 81 fatal work-injuries were recorded in Minnesota in 2022, up from 80 in 2021. The state's 2022 fatal-injury rate is 2.8 fatalities per 100,000 full-time-equivalent workers, which is unchanged from the 2021 rate. (12-20-2023 | Finance & Commerce)

New bill would require school districts to follow competitive bidding process
Wisconsin school districts would have to use competitive bidding for construction projects worth $150,000 under a proposal introduced by lawmakers. Assembly Bill 723 would require public school boards to enter the competitive bidding process when constructing new buildings and facilities, according to the bill text. The bill would raise the amount required for local governments to solicit competitive bids for public works projects, instead of awarding them directly, from $25,000 to $50,000. Some highway projects would be excluded. (12-20-2023 | The Daily Reporter)

Wayzata Schools buys Optum subsidiary Solutran's ex-Plymouth headquarters
The Wayzata school district bought the two-story, 32,000-square-foot building, located at 13305 North 12th Avenue for $7.75-million this week, according to a public real estate filing with the Minnesota Department of Revenue. (12-20-2023 | Minneapolis-St. Paul Business Journal)

Biden's Milwaukee visit highlights Black-owned businesses, lead pipe replacement
President Joe Biden toured a Black-owned plumbing company that's replacing lead pipes, a nationwide initiative that's been supported by his administration with billions of dollars, during his visit to the battleground state of Wisconsin. The trip was designed to spotlight a surge in federal government assistance for Black-owned small businesses during Biden's term and to highlight his administration's efforts to ramp up investment in distressed communities. (12-21-2023 | Finance & Commerce)

Enclave pitches 201-unit apartment in Bloomington
If Enclave Cos. has its way, Bloomington will soon be 201 apartments richer, as the developer plans to build on a lot that has been vacant for 17 years. The building, located at 6701 West 78th Street, would be five stories with 201 units. A detached, 11,000-square-foot day care center would also operate on the property, according to city documents. (12-21-2023 | Finance & Commerce)

Minnesota construction jobs up in November
Minnesota's construction industry added 300 jobs in November and has now seen growth in seven of the past eight months, according to data released by the Minnesota Department of Employment and Economic Development (DEED). Overall, the state gained 9,500 jobs from October to November, the fifth straight month of growth, DEED said in a press release, adding that it's the largest increase since January and "well higher than the national rate" of job growth. Also in November, Minnesota's labor force decreased by 7,433 workers for a participation rate of 68.3%. The U.S. rate is 62.8%. (12-21-2023 | Finance & Commerce)

Why Minneapolis' 2040 Plan didn't fix housing's 'missing middle'
Cody Fischer became an infill housing developer in Minneapolis in large part because of the Minneapolis 2040 plan. That comprehensive plan, which went into effect in 2020, is heralded in planning circles as one of the biggest reforms to what's consistently identified as a significant barrier to building more housing in America: the elimination of exclusively single-family zoning. (12-21-2023 | Minneapolis - St. Paul Business Journal)

Down year for multi-family but improvement could be near
When asked how he felt the market for apartments and other multi-family real estate fared in 2023, Northmarq's Ted Bickel had two words to describe it: "Choppy and slow." While there are other factors, interest rates are the first thing he points to when looking for a cultprit for the "choppy and slow" environment. (12-22-2023 | Finance & Commerce)

Wisconsin to spend $414M on wastewater, storm infrastructure
Wisconsin Governor Tony Evers, along with the state's Department of Natural Resources, announced that the Badger State would send $414,4-million to 84 municipalities through its Clean Water Fund program. The funding will help municipalities across the state build needed water infrastructure, according to the release. Projects that reduce phosphorus discharges and address aging equipment are included in the awards, with a focus on small and disadvantaged communities. (12-22-2023 | Construction Dive)

Workplace Law Updates for the New Year

Article updated 12-28-2023

A number of important workplace updates have been put in place via the Minnesota Department of Labor and Industry (DLI) over the past few months and quite a few go into effect in the new year. We've gathered them here for commercial constructors to review and take action as needed.

 

EARNED SICK AND SAFE TIME
Minnesota's earned and sick and safe time (ESST) law goes into effect January 1, 2024. The DLI continues to add resources and materials to help employers comply with the new law.

Resources recently added include new ESST FAQs, a recorded webinar presentation, an outreach toolkit for organizations and individuals who would like to help build awareness about the ESST law, and a sample employer notice that must be provided by employers to employees starting by January 1, 2024 when the ESST law goes into effect, and an ESST workplace poster (available in 18 languages).

 

MINIMUM-WAGE RATE
Effective January 1, 2024, Minnesota's minimum-wage rates will increase from $10.59 to $10.85 an hour for large employers and from $8.63 to $8.85 an hour for other state minimum wages.

Learn more about minimum-wage rates.

 

PAY-HISTORY BAN EFFECTIVE JANUARY 1, 2024
Employers in Minnesota may no longer ask a job applicant about their pay history beginning January 1, 2024. This law is being implemented, overseen, and enforced by the Minnesota Department of Human Rights.

 

NEW EMPLOYEE NOTICES
Veterans Benefits and Services
• All employers with more than 50 full-time employees are required to display this poster in a location where employees can easily see it. Required as of January 1, 2024

Earned Sick and Safe Time
• All employers must provide this notice to each of their employees by January 1, 2024 or at the start of employment if employment starts after January 1, 2024. Employers that have an employee handbook must include the notice in the handbook. Required as of January 1, 2024

Nursing Mothers, Lactating Employees. and Pregnancy Accommodations
• All employers must provide this notice to each of their employees at the time of hire and when an employee makes an inquiry about or requests parental leave. Required as of July 1, 2023

Employer-Sponsored Meeting or Communications
• All employers must post notice of employees' rights under this law by August 31, 2023. State law prohibits from taking or threatening to take any adverse employment action against employees who decline to attend employer-sponsored meetings concerning religious or political matters. Last updated August 2023

Minimum Wage Rates
• All employers are required to display this poster in a location where employees can easily see it. Last updated October 2023 

How to get the above mentioned poster notices?
1.)  Download and print the posters individually or in a five-poster PDF file. Posters fit on 8.5" x 11" paper.
2.)  Order posters online.
3.)  Email a request to dli.post@state.mn.us with a business name, contact name, mailing address, phone number and the name and amount of each poster needed.
4.) Order posters by phone at (651) 284-5042. When ordering, include a contact name, mailing address, phone number, and the name and amount of each poster needed. 

 

NOTICE OF CORRECTION TO PREVAILING-WAGE RATES
Affects highway and heavy regions

The commissioner of the Minnesota Department of Labor and Industry certified prevailing-wage rates for highway and heavy construction projects in all 10 Minnesota regions November 20, 2023.

This notice regards a correction to the rates for Region 2 (Job Code Group 306), Region 3 (Job Code Group 304), and Region 7 (Job Code Group 304). This correction is for all public works highway and heavy contracts advertised for bid on or after this date. 

The revised wage rate determinations and all other wage rate determinations are available online.

 

UPDATE ADDED DECEMBER 28, 2023
The Department of Labor and Industry (DLI) commissioner has certified prevailing-wage rates for commercial construction projects in all 87 counties, effective December 26, 2023. 

These rates were identified by annual voluntary survey of commercial construction projects in Minnesota collected by DLI.

See wage-rate determinations on DLI's website here. 

 

NOTICE OF TRUCK RENTAL RATE CERTIFICATION
The commissioner of the Minnesota DLI has announced a certification of minimum truck rental rates for state-funded construction projects in Minnesota.

The new rates are effective Monday, December 18, 2023. View the minimum truck rental rates here.

 

NEWS RELEASE
DLI seeks $2.4-million in back wages and liquidated damages in enforcement action against construction contractors

Minnesota's DLI has initiated a contested case against Property Maintenance & Construction LLC and Property Maintenance and Construction Inc (PMC) and Advantage Construction Inc (Advantage) by filing a Notice and Order for Hearing at the Office of Administrative Hearings. In the notice, DLI alleges PMC and Advantage failed to pay workers as required by law, resulting in back wages owed in the amount of approximately $1.2-million and an additional equal amount of approximately $1.2-million as liquidated damages.

DLI's investigation of PMG and Advantage uncovered widespread wage theft and related unlawful practices on 19 separate construction projects, including the Viking Lakes project in Eagan, Minn., during its investigative audit period of March 4, 2019, to June 5, 20222. DLI identified 25 employees that it alleges were jointly employed by PMC and Advantage and had not been paid the wages they were due, including overtime wages. DLI's findings include that many employees were paid off the books and in cash for a substantial portion for their employment and were not provided with earning statements as required by law. 

DLI also alleges the violations were willful. As described in the notice, PMC's owner displayed knowledge of overtime laws while flouting them and refusing to pay workers the overtime wages they were owed. Additionally described in the notice, the owner discouraged workers from reporting violations of the law and participating in DLI's investigation. As a result, DLI imposed a civil penalty of $25,000 for these willful violations of the law. Read the full press release here.

Hard Hats, Harder Times: Construction’s 2024 Landscape

As we wrap up 2023 and peek into 2024, let's have a real talk about the construction landscape. It's been a rollercoaster, hasn't it? With buzzwords like "recession" and "economic downturn" flying around, it's natural to feel uneasy about the future of the industry. But, we're a resilient bunch, and there's a lot we can do to navigate these choppy waters.

First off, the construction sector isn't immune to the hiccups of inflation, labor shortages, and those pesky supply chain disruptions. And yes, the experts are predicting more slowdowns thanks to those supply chain issues, rising costs, and high-interests rates. These challenges are not disappearing overnight, so its' crucial to stay sharp and find ways to keep the projects rolling smoothly.

The big question isn't if contractors will weather the storm, but more how well they do it. Let's dive in:

 

LABOR SHORTAGES
Everyone is feeling the pinch here. Finding and keeping great workers is tough, and the construction industry is feeling the squeeze particularly hard on this one compared to other industries. The demand for skilled hands is sky-high, but there isn't enough skilled workers to go around. Last year's survey from the AGC of American showed 91% of contractors struggled to fill positions. And guess what? In order to keep up with demand, about 546,000 new workers need to be brought on.

 

SUPPLY CHAIN DISTRUPTIONS
Oh, COVID-19, the gift that keeps on giving, right? The supply chain is still trying to bounce back, and the Build America, Buy America Act is adding more pressure with sourcing U.S.-made materials, especially for those businesses working on federally funded projects. We're talking longer wait times for materials to arrive.

 

INFLATION & MATERIAL COSTS
Here's a number for you: construction input prices have jumped 37.7% since 2020. This year's increase is 4.9%, a bit less scary than 2021's 23.1% hike. The price tags on materials are all over the place, with some, like lumber, actually dropping, while others, like concrete and construction equipment, are on the rise. This has made renting equipment more popular than ever.

 

THRIVING DURING UNCERTAIN TIMES
So, how can we keep our heads above water? Adaptation is the name of the game. Many industry vets have weathered economic downturns like this before, and there's wisdom in that experience. Look for cost-cutting strategies, protect your assets, keep informed, and stay optimistic.

 

STAY ON TOP OF TRENDS
Knowledge is power, folks. Keeping up with industry trends and news helps contractors prepare and tweak their strategies. Think articles, reports, newsletters --- all that good stuff to keep your business in the loop (and MBEX is a great go-to source for all of the above).

Another great place to gain insights into the 2024 construction season, tune in to Construction Executive's 2024 Construction Economic Update and Forecast on Wednesday, December 13 at 1:00pm CST. Led by Anirban Basu (chief economist for Associated Builders and Contractors) and crafted with commercial constructors in mind, he will offer insights on challenges facing the industry, sharing data and insights on labor expenses, materials pricing, market-sector growth and construction spending, as well as the latest on inflation and if, and/or when we'll actually see a recession. Register for this one-hour, free webinar here.

 

PLAN FOR THE UNEXPECTED
Expect hiccups with supply chains. Here are a few pro tips:

• Order early to avoid delays.
• Have a backup plan for material shortages/delays to keep projects on schedule.
• Look for alternative suppliers and subcontractors, as well as better rates.
• Use security measures like cameras to protect your materials.

 

FOCUS ON YOUR TEAM
A project is only as good as one's team. Investing your workforce is key; here's a few ideas on how to support them:

• Competitive Pay: It's not just about the paycheck; it's a sign of your company's value. The best talents expect the best compensation. 
• Embrace diversity: Diversity isn't just good for ethics; it's good business. More diverse companies tend to be more profitable.
• New Recruitment Avenues: Hit up job fairs and trade shows to find fresh talent, with both inexperienced and well-versed backgrounds.
• Supportive Culture: A great work environment keeps great workers. Think safety, fun, and growth opportunities.

 

LOSS PREVENTION
With high material costs, safeguarding your assets is crucial. Security cameras and professional monitoring not only deter theft but might also snag your business an insurance discount. Protecting your assets is key to maintaining profitability.

 

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No one is denying we're in a tough spot right now, but this industry is resilient (remember how we powered through the thick of COVID-19?). By facing these hurdles head-on, staying united, and being smart about costs, our industry is poised to emerge stronger than ever.

Roll up those sleeves, finish 2023 strong, and let's show 2024 what we're made of.

Building Buzz: September 2023

Look for our monthly Building Buzz feature that captures noteworthy construction happenings and people of note featured throughout the month in publications such as Finance & Commerce and the Minneapolis / St Paul Business Journal. 

In short, we're keeping an eye on the headlines so you don't have to.

Below are headlines of note from September 2023.

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Finance and Commerce

PROJECTS - Proposed, In Action & Milestones

Avinity Plans Conversion for St. Paul Assisted Living Facility
A Presbyterians Homes & Services affiliate plans to convert its newly acquired assisted living property in St. Paul to affordable homes for seniors and employees. Avinity, an entity related to Roseville-based Presbyterian Homes, paid $9 million for the 105-unit property at 2235 Rockwood Avenue in the Highland Park neighborhood of St. Paul, according to a certificate of real estate value make public. The seller is StuartCo Property Management, which first opened the community in the 1990s, according to Avinity.

$13M Veterinary Clinic Proposed in Wisconsin
Ethos-Wisconsin Veterinary Referral Center (e-WVRC) presented plans to the Pewaukee Plan Commission for a new $13 million, 25,704-square-foot pet hospital to replace its current facility in Waukesha. WVRC wants to build a 24-hour facility offering emergency and specialty pet care at the east side of Pewaukee Road and south of Interstate 94. The building will have space for a 50,000-square-foot addition, project plans showed. WVRC is working with Keller, Inc. to design the project and move through the city permitting process.

New Viking Lakes Apartment Project Gets Positive Reception
The Minnesota Vikings are winless on the field so far this season, but the football team's owners are unbeaten at Eagan City Hall when it comes to approvals for their latest apartment project in the city. MV Ventures, a development company owned by the Wilf family, owners of the Vikings, wants to construct 327 apartments in three buildings on part of the Viking Lakes campus near Dodd Road and Interstate 94 in Eagan. The campus includes retail, residential, hotel and office buildings, and is home to the Vikings' headquarters and training facility. 

Police Operations Building Nears Construction in Apple Valley
The city of Apple Valley hopes to start construction next spring on a new police operations building near Eastview High School. The city's Planning Commission recently reviewed plans for the 25,000-square-foot building, which will rise on the former McNamara Contracting site at 14325 Flagstaff Avenue, west of Eastview High School, and south of the current central maintenance facility. Designed by Oertel Architects, the building will offer a 15,000-square-foot fleet storage area capable of holding 30 vehicles, and a 10,000-square-foot area for support and office spaces. The office and support area will include locker rooms, showers, a roll call room, offices, conference room, and storage areas. 

Sick to Break Ground Next Year on Bloomington Campus Expansion
German sensor maker Sick USA has closed on the land it needs to build a 144,000-square-foot expansion of its technology campus near the Mall of America in Bloomington. Sick didn't disclose the sale price and a certificate of real estate value for the land sale hasn't been made public as of September 25. The company said its plans to begin construction in spring 2024 on part of its campus at 2601 American Boulevard East.

Wisconsin Church Finds New Purpose as Affordable Housing
St. John's Lutheran Church, one of Madison's oldest churches, is getting ready to tear down its current space and build a 10-story, 130-unit affordable apartment building. Real estate experts said the church is part of a wider trend of religious groups turning their underused property into housing to help combat a nationwide shortage. 

$400M Mixed-Use Development Gets Final Approval in Wisconsin
The Wauwatosa Common Council approved Barrett Lo Visionary Development's $400 million mixed-use development near the former Boston Store at Mayfair Mall. The development is made possible through nearly $58 million in financing help from the city. Barrett Lo will build around 918 apartments and 12,000-square-feet of commercial space in three phases with the expected groundbreaking date in 2025. The project is on six acres of land, which the developer said is situated mostly across surface parking lots. Construction phases of mid-rise structures will take between 10-12 years, the developer added. 

Church Plans to Convert Former LA Fitness Center
The former LA Fitness center at 2420 Cleveland Avenue North in Roseville is the latest large commercial building in the Twin Cities set to get a new life as a church. Everyday Community and Church, now based in St. Anthony, closed September 14 on the $6.4 million purchase from Reality Income Corp. in San Diego, California. 

Board Considers New Visions for North Commons Park
Two design options --- a $35 million renovation and addition and a $49 million new construction plan --- have emerged for the planned North Commons Park makeover in Minneapolis, a project that could be "transformational" for the North Side, supporters say. At issue is a plan to turn the 26-acre park at 1801 James Avenue North into a hub for arts, sports, recreation and community activities. Working with Fihan Design and Architecture and Locus Architecture, the Minneapolis Park and Recreation Board is asking the public to weigh in on the options. 

59-Acre Mixed-Use Technology Hub Proposed in Wisconsin
An Illinois-based developer wants to build a technology hub on nearly 60 acres of the Pabst Farms property in the city of Oconomowoc. Wingspan Development Group, a sister company of general contractors Nicholas & Associates, presented their plan before the Oconomowoc Common Council. In March, the developer bough 59 acres of Pabst Farms immediately east of Fleet Farm and north of Interstate 94.

Developer Starts Construction of 130 Single-Family Apartments in Wisconsin
An Illinois developer in late summer broke ground on a 130-unit apartment project in Milwaukee's south suburb of Oak Creek, and developers said this will further introduce the national trend of built-for-rent housing to Wisconsin amid a tight real estate market. Arlington Heights, Illinois-based Heyday is building 22 buildings across 47 acres at the southeast corner of Puetz Road and 27th Street. Each building holds four, six or eight units in single-story ranch-style homes. Each unit will have a two-car garage. It took developers 18 months to plan and push the proposal through the city permitting process. 

Construction of Luxury Couture Tower Accelerates in Milwaukee
Elected officials, organized labor representatives and developers met at the ongoing Couture tower project as a highlight of the North American Building Trades Union (NABTU) national tour at the Milwaukee lakefront. Construction of the high-rise has accelerated, and the developer said residents will move in by April 2024. Currently, the Couture concrete core is at the 33rd level of the luxury apartment tower. The concrete deck has been poured to level 30, precast panels are up to level 21 and exterior glass is up to level 16. 

Blue Line Up for $18.6M in Fixes and Upgrades
The Metropolitan Council is looking at an $18 million-plus bill to repair and update a portion of the Blue Line light rail corridor in Minneapolis and Bloomington. Railworks Track Systems recently submitted the low bid of $18.64 million to replace track and signal components for the light rail line, which runs from downtown Minneapolis to the Mall of America. A second bid came in slightly higher at $18.646 million. 

CORE X Plans Big Project in Bridgewater Township
New Jersey-based cold storage provider CORE X Partners is proposing a major expansion in Bridgewater Township, a Northfield-area community of 1,900 residents. The two-phase project would bring up to 370,000-square-feet of new cold storage space to a mostly agricultural area served by rail and 140th Street, according to an Environmental Assessment Worksheet released. Also included in the project are rail siding, septic, well and roadway improvements.

Capitol Planning Body Seeks Proposals for Mall Redesign
With the Minnesota State Capitol freshly restored and a major renovation in the works for the nearby State Office Building, the Capitol Area Architectural and Planning Board is turning its attention to the mall area around the sateae's most iconic building. The board hopes to update mall area plans with help from an outside consultant team. In a new request for proposals, the board is seeking a term to "build upon" the 2040 Comprehensive Plan for the Capitol area and update the Capitol Mall Redesign Plan, which dates back to the mid-1980s.

First Prefabricated Bridge in U.S. Installed in Wisconsin
A new kind of bridge installation with time and labor-saving benefits made its debut in the United States for the first ti,e in Eau Claire. The Eau Claire County Highway Department installed a bridge with prefabricated parts on County Highway V. Australian company InQuik Bridging Systems manufactured bridge components in a Virginia factory and shipped them to western Wisconsin, where highway department crews placed the structure and poured concrete under the watch of structural engineers.

$16M Adaptive Reuse Event Space Proposed for Former Wisconsin Factory
A Chicago-based developed has proposed a $16 million redevelopment plan of the former Kearney and Trecker manufacturing building with the goal of turning it into an events venues in West Allis Baum Revision has proposed a development agreement with the city to renovate around 41,000-square-feet of space at 6771 West National Avenue, according to city officials. The building was put up in 1918 and served as a foundry, officials added. 

'Passive house' apartment project planned in Minneapolis
An up-and-coming local developer with a passion for carbon-smart multifamily housing wants to replace a 115-year-old triplex in south Minneapolis with an apartment building designed to passive house standards. Footprint Development's latest project, which is up for Planning Commission review, would bring 32 apartments and 1,553-square-feet of commercial space to the triplex site at 3561 Minnehaha Avenue, which is at the northeast corner of Minnehaha Avenue and 36th Street. 

Timberland finishes luxury apartments
Timberland Partners --- a Minneapolis-based real estate investment, management and development firm --- has completed a 246-unit luxury apartment building in Eden Prairie. The community at 8300 Commonwealth Drive is the company's largest development to date, according to a press release. 

Eagle Brook Church still in growth mode
Eagle Brook Church didn't have to stray far from its temporary home at Wayzata High School to find a place for its new $39 million campus in the Twin Cities suburbs. The campus, Eagle Brook's 10th permanent location in the Twin Cities and Rochester, will rise on an existing farm site on Chankahda Trail, just north of Meadow Ridge Elementary School in Plymouth. The 54-acres site is a mere two miles from Wayzata High School, where Eagle Brook has been holding services since 2018.

Enclave's redevelopment project in Edina clears environmental hurdle
Enclave's mixed-used redevelopment plan for the former Macy's Furniture Store location in Edina has reached another milestone with the completion of an environmental reviews. The Minnesota Environmental Quality Board said that an Environmental Impact Statement is not needed for the project, which would bring 460 housing units and 300,000-square-feet of office and mixed-used space to the one-time retail site at 7235 France Avenue South. The 8-acre site is on the east side of France Avenue north of Gallagher Drive. 

Report Blames Deadly Iowa Building Collapse on Removal of Bricks and Lack of Shoring
A partial building collapse in Iowa that killed three people in May was caused by the removal of brick and inadequate shoring of the 116-year-old structure, according to a report released by officials. The 113-page investigative report by two engineering companies also blamed the collapse on improper understanding of a structural bearing wall, inadequate oversight of repairs and a history of improper maintenance. 

 

PEOPLE

Former Inmate Rebuilds Life Through Work in Construction Trades
Like many electrical apprentices, John Bailey spends his time bending pipes, putting in wall outlets and wiring panels. He works with journeymen to decide how to best handle the job and counts on more-experienced electricians for mentorship. Before Bailey found a new life in the trades, he has been incarcerated twice in Wisconsin.

 

COMPANIES

How Ryan was able to Deliver PrairierCare Expansion Early
A youth and young adult psychiatric hospital in Brooklyn Park is poised to help more patients during a historically busy month now that its expansion project is Brooklyn Park has crossed the finish line ahead of schedule. The expansion added 30,000-square-feet to PrairieCare's inpatient hospital at 6400 Zane Avenue North. Minneapolis-based Ryan Cos. US Inc. announced that it delivered the expansion in August, about three weeks early. The expansion --- which adds 30 inpatient beds and will allow PrairieCare to serve an additional 1,000 patients each year --- comes at a time when "there is historically an increased need" for psychiatric services, Ryan said.

WSB Expands Baxter Office
WSB, a Golden Valley-based design and consulting firm, has expanded its office in Baxter, Minnesota. The company. which opened its first Baxter office in 2015, has relocated to the Johnson Center at 14275 Golf Course Drive in Baxter. The new 2,360-square-foot space "represents WSB's further investment in the central Minnesota region," according to a press release. 

Spotlight: Architecture firm has 'bittersweet' post-Floyd rise
As 2020 began, Damaris Hollingsworth was looking forward to a good year for her fledging architecture firm, Minneapolis-based Design by Melo. Three of Design by Melo's five projects went on hold, however, when the pandemic hit in March. Other firms were letting people go for the same reason. Hollingsworth considered applying at Target or Starbucks to pay bills while keeping smaller design jobs --- and her firm --- going. Them, just as suddenly, her business took off despite the pandemic. New work rolled in from July through December. It continued into 2021, Design by Melo's first seven-figure year, and beyond.

Building a Winery on the Iron Range took Vision and a Web of Support
Is there a skill common to schoolteachers and successful restaurateurs? Northern Minnesota wine entrepreneur Tia Marie believes the ability to "read the room" she developed in 28 years as a teacher has factored into her success as the owner of two Minnesota-focused wine bars: Smoke on the Water, a production wine and cider facility located on Trout Lake in Coleraine; and Unwined Up North, the "super tiny" wine spot she opened in her hometown of Grand Rapids a few years earlier.

 

INDUSTRY NEWS - Local & National

Permits for Single-Family and Small Multi-Family Surge in September
Builders of single-family homes are enjoying their best September in nearly 20 years, but apartment construction activity remains slow as planned multi-family units fell further behind last year's pace during the month. In September, cities in the 13-county metro area have issued permits for 656 new single-family houses (up 80% from a year ago), and 820 planned multi-family units (down 33%), according to a monthly report released by the Keystone Report. Overall, planned units are down 6.75% from September 2022.

Recent Floods Heighten Concerns That Dams May Not Be Built for Climate-Induced Storms
The recent floods in Massachusetts that put a few dams at risk have raised concern that structures may increasingly be at risk as the region is hit by stronger and wetter storms. There are thousands of dams across New England and many were built decades if not centuries ago. often to help power textile mills, store water or supply irrigation to farms. The concern is they have outlived their usefulness and climate change could bring storms they were never built to withstand. 

Construction Jobs Rise in 45 States Over Last 12 Months
The number of workers on construction sites rose from August 2022 to August 2023 in 45 states and the District of Colombia and fell in five states, according to an Associated General Contractors (AGC) analysis of U.S. Bureau of Labor Statistics data. Texas added the most construction jobs year over year, with 21,1000 jobs (or a 2.7% increase). California came in second with 15,600 additional jobs (1.7% increase), and the rest of the leading states were Ohio (11,600, or 5%), Georgia (10,600, or 5%), and Pennsylvania (10,500, or 4.1%). 

Wisconsin's Workforce Development Programs Recognized Nationally
Wisconsin's workforce development programs were recognized nationally by touring labor organizations, who are gearing up to change construction's culture and address employment hurdles as the federal government raked in money for infrastructure projects. 

New Reports See Mixed Bag for Construction Economy
Demand for construction loans is down as the industry in the Twin Cities and beyond struggles with rising interest rates and tighter lending standards, but total construction spending is up from last year thanks largely to federal money, according to new reports. In its Midyear Construction Trends report, commercial real estate and investment management company Jones Lang LaSalle (JLL) said financing constraints "have driven a rapid decline in construction starts over the last quarter,...As interest rates are expected to peak near year-end 2023, construction starts will continue slowing well in 2024."

Construction Industry Adds 22,000 Jobs in August, Warns of Infrastructure Red Tape
The construction sector added 22,000 jobs in August, but the industry was still hounded by a skilled worker shortage as unemployment stayed around 3.9%, according to an Associated General Contractors (AGC) analysis. AGC reported construction spending rose 0.7% in July despite a downturn in most infrastructure investment categories. AGC officials cautioned progress on many public infrastructure projects was likely undermined by added layers of red tape left behind by the Biden administration. Meanwhile, average hourly wages jumped again, and demand was ever-growing for private projects. 

AGC Advises 'Zero Tolerance' for Cannabis on Construction Sites
Worried about the impact of marijuana legalization, Twin Cities commercial building contractors will rely on a drug-free policy unless guidance from the courts and the state changes. The AGC has advised members to use a zero-tolerance for cannabis approach on their job sites under the "safety-sensitive" exclusion of the marijuana law.

2040 Plan Court Ruling Creates More Uncertainty in Minneapolis
The recent court ruling related to the city of Minneapolis' 2040 comprehensive plan will create more uncertainty and have a chilling effect on construction of new housing in the city. That's what some local developers and homebuilders are saying in reaction to the ruling from Hennepin County District Court Judge Joseph Klein, who ordered the city to revert to its 2030 Comprehensive Plan within 60 days. 

Sustainable: More interior designers embrace sustainable materials
In designing more sustainable buildings, architects should pay closer attention to the materials they use. Carpets, flooring, paneling, paint and other products often carry toxins or unrecyclable materials such as plastics. Greener alternatives exist, but the design industry has embraced them slowly. 

Cities across Wisconsin ramp up new construction in 2023
Milwaukee's construction growth is already visible from large scale projects on the lakefront and downtown. But now it's also visible in Wisconsin's record books. The city so far this year has $449.3 million in new construction, adding 1.14% to last year's value of $39.4 billion, according to the August 9 Wisconsin Department of Revenue (DOR) Net New Construction Report. 

 

PROJECTS OUTSIDE FIVE-STATE AREA

Performing Arts Center Opens at Ground Zero After Two Decades of Setbacks and Changed Plans
In a mammoth room behind translucent marble walls, workers are setting the stage for the World Trade Center's newest addition. It isn't another office tower, nor is it a monument, at least explicitly, to the memory of the September 11 terror attacks. It's a theater complex. 

$50M Renovation of White House Situation Room Complete
The White House Situation Room --- a space of great mystique and even greater secrecy --- just got a $50 million facelift. Actually, "room" is a misnomer. It's a 5,500-square-foot, highly secure complex of conference rooms and offices on the ground floor of the West Wing. 

Largest Renewable Energy Infrastructure Project in U.S. Breaks Ground
An energy infrastructure project bigger than the Hoover Dam is how Hunter Armistead describes the $10 billion venture his company will be overseeing during the next three years. As the chief executive of one of the world's largest wind and solar development companies, Armistead said breaking ground on Pattern Energy's SunZia transmission line marks a major milestone as the United States looks to make good on promises to address climate change and bolster the nation's already overwhelmed power grids as demand increases and weather events become more extreme. 

Some U.S. Airports add sensory-inclusive facilities and operations
Andrea Nissen is trying to prepare her 65-year-old husband, who has Alzheimer's disease, for a solo flight from Arizona to Oklahoma to visit family. She worries about travelers and airport officials misinterpreting his forgetfulness or habit of getting in people's personal space, and feels guilty about not be able to accompany him.

 

Minneapolis / St Paul Business Journal

PROJECTS - Proposed, In Action & Milestones

After Mixed Feedback, Plan for 355 Rentals in Maple Grove Heads to City Council
The project, which includes a mix of 350 apartments and townhomes and a new commercial building, on a 79-acre site at 17425 101st Avenue North, moved past the city's Planning Commission. But it didn't get wholehearted endorsement'; some commissioners said they'd prefer owner-occupied housing instead.

Minneapolis College Begins $22.5 Million Renovation of Downtown Business School Center
Minneapolis College and Metropolitan State University will start a $22.5 million renovation project this month to upgrade their jointly run business school center in downtown Minneapolis. The Management Education Center, located at Old Harmon building at 1300 Harmon Place, is a dual business school and entrepreneurial hub occupied by Minneapolis College St. Paul-based Metro State University, which are both under the umbrella of the Minnesota State public college system. 

Wilfs Ready Plan for 300+ Apartments at Viking Lakes Development
The developer behind the 200-acre Viking Lakes campus in Eagan is getting ready to pursue its final residential phase with more than 300 new apartments. A business entity tied to Eagan-based MV Ventures, a company owned by the same Wilf family that owns the Minnesota Vikings football team, is returning to the city of Eagan as it plans new buildings for the residential development known as the Viking Lakes Residences. 

Wellington's Plan to Redevelop Vacant Perkins Sit in Minneapolis Seeks TIF
The developer behind a $54 million plan to redevelop the site of a former Perkins restaurant located along Interstate 94 in Minneapolis is seeking tax increment financing. The project, led by St. Paul-based Wellington Management Inc., includes a six-story building with 155 units of affordable housing and 800-square-feet of ground-floor commercial space. The city's Planning Commission Committee of the Whole will consider a plan establishing a new TIF district to help finance construction costs. 

Everyday Community and Church Buys Former LA Fitness Site in Roseville
A shuttered LA Fitness location in Roseville has been sold to a Twin Cities church that plans to renovate the property into a worship space. Everyday Community and Church paid $6.4 million to buy the 55,000-square-foot property from Realty Income Corp. of San Diego, according to a certificate of real estate value. 

Windsong Farm Golf Club Building Second 18-Hole Course
Windsong Farm Golf Club is doubling down on its commitment to golf with the addition of a new 18-hole course, at a time when other private clubs are looking beyond golf to attract new members. Construction on the new 18-hole golf course at Windsong Farm Golf Club in Independence, Minnesota, began four months ago and when complete, Windsong will be the only private club in the Twin Cities with two 18-hole courses.

Greater MSP Vying for $75M to Make Minnesota an AI-Enabled Global MedTech Hub
Greater MSP and a consortium of big Minnesota employers are vying for a chunk of $500 million in federal funds to make Minnesota an artificial intelligence-enabled "Smart MedTech" hub. It's part of the U.S. Economic Development Authority's Tech Hubs Program, which aims to grow new innovation centers throughout the country to strengthen domestic economic and national security. The program was part og the CHIPS and Science Act of 2022, which earmarks $10 billion over five years. 

Empty Bloomington Office Building Could See New Life as Indoor Golf Venue
A pro golf instructor plans to convert an unoccupied office building in Bloomington into a recreation facility featuring golf simulators and restaurant space. The plan by Ernie Rose includes adding dining space and 23 golf simulators on the first two floors of the 45,000-square-foot Creekridge Office Center. Including acquisition and buildout, the project is expected to cost $6 million, Rose told the Business Journal. 

Minneapolis City Council OKs Roof Depot Site Sale to EPNI
A plan by East Phillips Neighborhood Institute (EPNI) to buy the former Roof Depot site in south Minneapolis for $11.4 million has been approved by the Minneapolis City Council. The local community group has been planning an urban farm at the site, located near East 28th Street and Longfellow Avenue, for years. The 230,000-square-foot building is a former Sears warehouse that city officials once marked for demolition, to be replaced by a Public Works water maintenance facility. 

Johnson Brothers Liquor Plans Warehouse at Former Blue Cross Blue Shield of Minnesota HQ
A local wine and spirits distributor is proposing to redevelop the former Eagan headquarters of Blue Cross Blue Shield of Minnesota with a 460,000-square-foot warehouse facility and other uses. St. Paul-based Johnson Brothers Liquor Co. plans to relocate its corporate headquarters and Minnesota distribution operations to Eagan as part of a plan to transform the former BCBS site, at 3535 Blue Cross Road, and the surrounding area. This comes after BCBS confirmed earlier this year that it was putting its headquarters up for sublease.

New Balance is Opening Factory Store at Twin Cities Premium Outlets
Twin Cities Premium Outlets is expected to get Minnesota's first New Balance Factory Store later this year. The 4,000-square-foot store should open in the fourth quarter of 2023, ahead of the holidays, featuring a full range of performance footwear and apparel for men, women and children, according to an announcement from the Eagan shopping center. 

Minnesota Made Hockey in Edina Plans New Training Center, Consolidation
Minnesota Made Hockey is proposing to build a 10,240-square-foot training facility on the same property as its existing hockey and ice facility in Edina. The new building would be built at the southern portion of Minnesota Made Hockey's 5.55-acre site at 7300 Bush Lake Road West, which is currently home to a 63,311-square-foot facility containing two ice rinks, according to documents submitted to Edina's planning department. 

Life Time Unveils New Pickleball Club Concept in Chanhassen
Life Time Group Holdings Inc. is expanding from pickleball courts to a full-scale pickleball club, as announced in a groundbreaking announcement. The fitness club's first-ever pickleball club will be built in the company's home city of Chanhassen and is expected to be completed in early 2024. It will be built in a 25,000-square-foot building adjacent to Life Time's current fitness club at 2901 Corporate Place. The pickleball club will feature eight indoor and seven outdoor courts, as well as a viewing area, lounge and dressing rooms. Construction is being lead by Life Time's own construction firm, Life Time Construction. 

Grand Casino Mille Lacs and Hinckley hotels getting multimillion-dollar facelifts
Grand Casino's two largest hotels, the Mille Lacs and Hinckley hotels, are getting multimillion-dollar makeovers. The renovation project, which is starting this month, was announced by Onamia-based Mille Lacs Corporate Ventures (MLCV), the parent company of Grand Casinos. According to the press release, the hotels' complete transformation is part of MLCV's plan to revitalize its assets. 

$300 million plan to redevelop Plymouth's Prudential site to return to city
A $300 million plan to redevelop the 75-acre Prudential site in Plymouth will go before the city's Panning Commission on September 6. Commissioners are expected to consider a comprehensive plan amendment to accommodate the redevelopment plan, which is being led by co-developers Minnetonka-based Roers Cos. and Indianapolis-based Scannell Properties. 

North Loop Green in Minneapolis gears up for early 2024 opening
The development team behind North Loop Green, the mixed-use project under construction right next to Target Field, is gearing up for its next milestones as it eyes opening early next year. Since construction crews topped off of North Loop Green's 35-story residential tower in early August, attention is turning to residential leasing, signing retail tenants, and filling a few more offices, said Bob Pfefferle, managing director at Hines. 

Lawsuit says construction of hotel in Edina's Pentagon Village is off
The development of a hotel planned for Edina's Pentagon Village that has been in the works for years is facing yet another snag. Rise Construction Services LLC, the construction are of Rise Modular, terminated its contract with Fifth Side Lodging LLC to build the hotel, according to a lawsuit filed by Fifth Side Lodging LLC in U.S. District Court on August 28.

 

COMMERCIAL REAL ESTATE

Caribou Coffee Signs 100,000-Square-Foot Lease at Maple Grove's Arbor Lakes Business Park
Caribou Coffee Co has signed on to lease over 100,000-square-feet at Maple Grove's Arbor Lakes Business Park. Edina-based Endeavor Development, which is leading the development of Arbor Lakes, announced the new lease with the Brooklyn Center-based coffeehouse chain the last week of September. Caribou is expected to move into the new space at the start of 2024, according to Josh Budish, principal of Endeavor.

 

INDUSTRY - Local & National

Construction Firms Cite Labor as Biggest Challenge Despite Slowdown in Starts
The U.S. construction market is starting to shift in the wake of less work from the private sector and ramped-up spending in industries like infrastructure and manufacturing, bolstered by federal incentives. And while supply-chain issues and higher materials prices have normalized since the peak of the COVID-19 pandemic, inflation, higher interest rates and --- most notably --- labor shortages are challenging company leaders across the industry.