Building Buzz: Welcome to February!
Welcome to Building Buzz, where we're reading the headlines so you don't have to.
Already halfway through February, the construction industry is tackling big challenges and seizing new opportunities.
Minnesota continues to wrestle with greenhouse gas emissions from buildings, even as the state makes strides in overall reductions. Meanwhile, Milwaukee County is preparing for a $490-million overhaul of its nearly century-old Public Safety Building, aiming to modernize and streamline its justice system. Nonresidential construction spending saw a slight dip to close out 2024, but data centers and manufacturing remain bright spots for growth this year. On the housing front, office-to-apartment conversions are set to hit an all-time high in 2025, offering a creative solution to outdated office space. Locally, projects like Yellow Tree’s 242-unit development in Inver Grove Heights and Big-D’s new affordable housing in Rosemount are adding much-needed residential options.
With infrastructure, sustainability, and innovation in the spotlight, it's shaping up to be another dynamic month in construction. Let's dive in further to this Building Buzz:
FEBRUARY 3
Buildings continue to pose greenhouse gas challenge
Minnesota continues to struggle to reduce greenhouse gas emissions from buildings. The state released data from 2005 and to 2022 that showed continued emissions in three categories related to businesses and housing. Combined, they represent 33% of all emissions in the state, collectively more than agriculture, electricity generation, and the leading polluter, transportation. Still, the state continues to see progress. Overall, emissions have dropped 14% since 2005, according to Katrina Kessler, commissioner of the Minnesota Pollution Control Agency. One challenge has been the return to normality after the pandemic when emissions plummeted in 2020 and 2021 before jumping 6.4% in 2022. (Finance & Commerce)
Milwaukee County plans $490M Public Safety Building overhaul
Shortly after hiring a consulting firm to redesign the Public Safety Building, Milwaukee County officials toured the crumbling facility ahead of a $490-million reconstruction project. The building, located at 821 West State Street in Milwaukee, is nearly 100 years old and doesn't reach state standards for courthouses, creating slowdowns in the local justice system and safety risks for those who use the facility, according to many local officials and judges. In January, the county announced it selected engineering firm AECOM to provide architectural planning and design services on a multi-year project. The county also brought a team from the National Center for State Courts' Court Consulting Services Division to seek stakeholder input. AECOM will work on design through 2027, and construction could begin in 2028 or 2029 and continue through 2031 or 2032, officials noted. (The Daily Reporter)
Nonresidential construction spending down 0.2% in December; Data Centers and Manufacturing make up 94% of spending increase in 2024
Spending was down on a monthly basis in 9 of the 16 nonresidential subcategories. Private nonresidential spending increased 0.1%, while public no0nresidential construction spending was down 0.5% in December. While its expected public sector activity should at least partially rebound in the coming months, high interest rates and an emerging trade war with Canada and Mexico will continue to weight on many privately financed segments. (Associated Builders and Contractors)
Pipeline of office-to-apartment conversions expected to hit all-time high in 2025
It's true that converting office space to multi-family buildings is no easy task. But such conversions offer an opportunity for cities to remove outdated or obsolete office space and replace it with highly desirable rental housing. This truth explains the prediction from RentCafe that the number of office-to-apartment conversions will soar across the United States in 2025. In its Market Insights report, published January 30th, RentCafe said estimates that the number of apartments set to be converted from office spaces in the United States will jump to a record-breaking 70,7000 in 2025. (RE Journals)
Yellow Tree pays $3.6M for Inver Grove Heights development site
Yellow Tree Development has closed on the site of its planned 242-unit, $66.4-million apartment building in Inver Grove Heights and hopes to begin pushing dirt by midyear. Silver Tree LLC, an entity related to Yellow Tree, paid $3.6-million for the 4.4-acre development site at the southwest corner of 70th Street and Agate Trail, according to a certificate of real estate value made public. Construction would begin as soon as May, but it's more likely to happen in June or July. In April, the Inver Grove Heights City Council granted land-use approvals for the project, which will offer 242 market-rate apartments ranging from studios to three-bedroom units, and amenities such as a sky lounge with a roof deck, a fitness center, a yoga studio, work-from-home stations, and a pool. (Finance & Commerce)
FEBRUARY 4
Big-D completes affordable rentals in Rosemount
The 160-unit Landing at Amber Fields Apartments, part of the larger Amber Fields development, offers a mix of one-, two-, and three-bedroom options. Each unit feature "in-home washers and dryers, stainless steel appliances and granite countertops." Community amenities include a club room, fitness room, underground parking, outdoor patio, playground, and dog park. The units are affordable for households at 50%, 60%, and 70% of the area median income (AMI). (Finance & Commerce)
Milwaukee plans $490M Public Safety Building overhaul
Shortly after hiring a consulting firm to redesign the Public Safety Building, Milwaukee County officials toured the crumbling facility ahead of a $490-million reconstruction project. The Public Safety Building, at 821 West State Street in Milwaukee, holds a handful of criminal courts and holding and jury facilities for the county court system. The building in nearly 100 years old and doesn't reach state standards for courthouses, creating slowdowns in the local justice system and safety risks for those who use the facility, according to many local officials and judges. The early plan assumption is to move facilities out of the safety building, then deconstruct and reconstruct the facility. Overall, the county wants to put all the criminal courts under one roof. The design process will take two years and early plans aren't final. (Finance & Commerce)
Sports complex could spur development in SE Rochester
The city of Rochester has signed off on a $5-million property acquisition for a future $65-million sports and recreation complex, a project that will bring new outdoor athletic facilities to the southeast part of the city. A second project phase with indoor facilities could ultimately double the project cost. The 160-acre property deal, approved by the City Council on February 3rd, offers more than enough land for both indoor and outdoor attractions --- as well as potential private sector development, which could generate revenue to support the second round of construction. City officials looked at more than 15 potential sites for the complex and boiled that list down to three before settling on a property owned by Seneca Foods Corp. Located north of 45th Street near St. Bridget Road Southeast, the Seneca site has ample room for expansion and future development, such as hotels, restaurants and housing, according to a city staff report. (Finance & Commerce)
FEBRUARY 5
$23.5M in funding helps advance 3 Trellis projects
Nonprofit developer, Trellis Co. will start interviewing contractors to build its 40-unit supportive housing project in Mankato, according to a Trellis leader. The project, which has yet to receive an official name but is located at 750 Linder Avenue, will begin construction near the end of 2025 and has an anticipated completion timeline of 12 - 14 months. The project completed its gap financing after the Minnesota Housing Finance Agency awarded the project $7.25-million in December. The Mankato project was not the only project for which Trellis was awarded funding. For two preservation projects in Eveleth and St. Louis Park, the firm received $7.65-million and $8.56-million. Trellis is the only group to receive multiple funding awards for multi-family projects in this round of state funding, having been given a total of $23.5-million. (Finance & Commerce)
Rochester OKs annexation, rezoning for 220 new homes
Bigelow Homes, which is headquartered in Rochester, hopes to begin site work as soon as the summer on the multi-year development. The Rochester City Council approved annexation and rezoning requests to push the plans forward. Besides the annexation, the council approved a zoning change from "R-1," which is for "larger lot" single-family development, to "R-2," which allows duplexes, fourplexes, townhomes and smaller lot single-family houses. From a construction standpoint, the goal is to begin moving dirt in July or August and commence street and underground work in Spring 2026. Finished lot should appear in August 2026, followed by two construction phases of 110 lots each. (Finance & Commerce)
FEBRUARY 6
$8.5M settlement reached in construction worker's death
Personal injury law firm SiebenCarey has announced that it has reached an $8.5-million settlement in the death of a construction worker who was crushed by a dump truck in downtown St. Paul in 2022. Part of the large settlement reflects the pain and emotional turmoil suffered before the worker's death, a remedy available thanks to changes in the state's wrongful death laws in the Omnibus Judiciary and Public Safety Bill enacted in 2023. Peter Michael Davis was a 61-year-old construction worker for subcontractor SGP Contracting Inc. He also had been a longtime employee of the St. Paul Regional Water Services Department. David was working construction on Wabasha Street just south of Seventh Street East in downtown St. Paul on September 28, 2022, when a loaded dump truck operated by Dawson Barber and owned by Ti-Zack Concrete backed up to the construction site. It backed up for approximately six seconds before it hit Davis, traveling just under 70-feet before stopping. (Finance & Commerce)
Hearth ready to build apartments on site made famous by 'Fargo'
Way back in 2022, Hearth Development cleared the city entitlement process for a planned $14-million, market-rate apartment building on a site that may be familiar to fans of the movie "Fargo" --- the old Lakeside Club location in Mahtomedi. Memorable scenes from the 1996 movie were filed at 10 Old Wildwood Road, the location of the Lakeside Club. The club has since been demolished, but the 39-unit apartment project is finally on the cusp of construction. Hearth plans to break ground next week on the building, which will be targeted to people 55 and older. Designed by Kass Wilson and built by Nottingham Construction, the building will feature an outdoor community space with a party deck, a golf simulator, pet wash, community room on the main floor, office spaces for residents and other amenities. (Finance & Commerce)
Tariff threats loom over construction spending
Construction spending in late 2024 inched upward thanks to single-family homes and data centers, but recently announced tariffs over the weekend could impact future construction spending. That's according to a report from the Associated General Contractors of America. Total construction spending in December was $2.9-trillion at a seasonally adjusted annual rate, AGC added. Public construction spending fell 0.5% for the month and rose 4.3% over 12 months, officials said. The three largest segments were highway and street, education, and transportation construction, which had short term falls but long-term gains. Private office construction other than data centers grew 1.2% in December and 12.8% year-over-year, officials noted. (Finance & Commerce)
FEBRUARY 7
Affordable 'passive house' townhomes pitched near Midtown Greenway
A local development team wants to build 10 passive house-designed, affordable townhome units on a former encampment site along the Midtown Greenway in Minneapolis' Midtown Phillips neighborhood. The 14th Avenue Townhomes, proposed by Trio Development Group and the City of Lakes Community Land Trust, would rise on three city-owned vacant lots at 2833-39 14th Avenue South, according to a staff report for the February 10th Minneapolis Planning Commission meeting. The construction cost would be about $4-million, according to Paul Gates Architect, who is working on the project. The commission will consider two variances and review a site plan for the proposed L-shaped building, which would offer three four-bedroom units, four two-bedroom, units, and three one-bedroom units. (Finance & Commerce)