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Architecture & Design, Commercial Real Estate, Development, Property Management

History of the Empire State Building: A Financial Flop for Nearly 20 years

By QuickLiquidity | Date: June 13, 2017 | Category: History

In the late-1920s, New York’s economy was booming and a competition to build the world’s tallest building was heating up. One man who was at the center of it all was Walter Chrysler of the Chrysler Corporation, who wanted to build the world’s tallest building as a monument to himself and American capitalism. Chrysler began construction of his monument, the Chrysler Building in 1928 at 405 Lexington Avenue. Despite the buildings name, the Chrysler Corporation did not pay for the construction of the building and never owned it. Instead Chrysler paid for it himself, with the hope of his children one day inheriting the world’s tallest building.

The architects of a competing building, 40 Wall Street, had devised a plan to prevent the Chrysler Building from ever becoming the world’s tallest building. Seeking the title for themselves, they planned 40 Wall Street to be 925 feet tall: 85 feet taller than the Chrysler Building had originally planned to be. When Chrysler found out about 40 Wall Street’s plans he decided to add a surprise 186-foot spire to his building. 40 Wall Street finished construction first in April of 1930, and held a celebration for being the tallest building in the world, without knowing that they were about to be surpassed. Less then two months later, the construction workers at the Chrysler Building hoisted 4 parts of the secret spire to the top and riveted them together in 90 minutes. At 1,046 feet high, the Chrysler Building became the world’s tallest building¹.

John J. Raskob of General Motors, a rival of Chryslers, also aspired to build the world’s tallest building. Raskob purchased 350 Fifth Avenue and began construction of the Empire State Building in March of 1930, only a few months before the Chrysler Building was completed. Raskob hired architect William F. Lamb, who finished the original drawings for the Empire State Building in only two weeks. In one of their first meetings Raskob had taken a jumbo pencil, stood it on its end and asked Lamb, “Bill, how high can you make it so that it won’t fall down?” Using over 3,400 laborers a day, the building went up in just over a year, well ahead of schedule and under budget at $40 million, which would be nearly $600 million today. During certain periods of construction, the frame grew a remarkable four-and-a-half stories a week. Not to be bested by the Chrysler Building, Raskob put the final cherry at the top of his building – a spire, making the Empire State Building a soaring 102 stories and 1,250 feet high. The Empire State Building was completed in May of 1931 and became the world’s tallest building, a title it would hold for nearly 40 years until the World Trade Center was completed in 1970. While successful in beating the Chrysler Building in height, the Empire State Building was far from being the success Raskob had hoped.

 

Full Article: http://www.quickliquidity.com/blog/history-of-the-empire-state-building-a-financial-flop-for-nearly-20-years.html

Architecture & Design, Development, Twin Cities Real Estate, Urban Planning

Former Washburn-McReavy Funeral Home Development Remains Postponed

If you take a leisurely drive east over the 3rd Street bridge, you will see a familiar building. Familiar in the sense, the building is 90 years old. Your grandparents likely could have seen it as children. However, today unlike 90 years ago, fences surround the building with visible graffiti and construction equipment. It is the sight of one of many development projects in historic Northeast Minneapolis. 

The plan for the 90 year old building, previously occupied by Washburn-McReavy funeral home, was demolition to make way for a 40 story high rise. The project thus far is similar to the redevelopment efforts of Nye’s Polonaise which occupied the historic Harness shop and 112 Hennepin building. The Nye’s Polonaise project originally planned a high rise building, but in the end scrapped 24 of the original 30 floors to accommodate the neighborhood and Heritage Preservation Commission.

While it is not the same building as Nye’s, the project has been postponed now for almost a year. It will be interesting to see what happens, but recent history and potential project pressures may indicate serious alterations to the original plans.

 

http://www.bizjournals.com/twincities/news/2017/05/31/court-blocks-teardown-for-alatus-40-story-condo.html

 

Best of Real Estate Matters, Commercial Real Estate, Development, Green Building, Historic Tax Credits, Housing Trends, Investment Real Estate, Minneapolis / St. Paul Housing, Minnesota Real Estate Hall of Fame, Minnesota Real Estate Journal, Real Estate Programs, Real Estate Trends, Think Outside The Box, Twin Cities Real Estate, Urban Planning, UST Real Estate in the News

New Members of Minnesota Real Estate Hall of Fame Announced

The Minnesota Real Estate Hall of Fame, established in 2010 by the Shenehon Center for Real Estate at the University of St. Thomas Opus College of Business, will add three new members in a morning ceremony Thursday, Nov. 5th, at the Golden Valley Golf and Country Club.

Members of the Minnesota Real Estate Hall of Fame are chosen for their outstanding business performance, high standards of ethics and community activities. The three new members

Dan DolanWells Fargo

For more than 50 years, Dan Dolan has pursued a career in real estate. He was a leader in improving the professional and ethical standards in real estate and was an early promoter and employer of women in real estate sales. His real estate developments include the Evergreen Community, an upscale residential development in Woodbury; and the Oakdale Crossing Business Park.

Throughout his career, Dolan has been actively involved in boards and fundraising, including the merger of Cretin and Durham high schools, fund raising for the University of St. Thomas, and serving as King Boreas XLII in the 1978 St. Paul Winter Carnival. He may be eligible for retirement, but Dolan is just as passionate as ever about real estate development and continues to receive offers of employment in the industry.

Larry Laukka  

Since 1962, Larry Laukka has actively served in all  aspects of the real estate industry, but primarily in the building and development business. Laukka’s experience has included the design, development, financing, construction and marketing of more than 6,000 dwelling units and home sites throughout the greater Twin Cities community, and the management of approximately 3,000 owner-occupied townhomes and condominiums. His leadership roles include president and director of the Minneapolis Builders Association (MBA), senior life director of the National Association of Home Builders (NAHB) and founder of the Minnesota Housing Institute (MHI), which served the real estate industry’s state-wide needs to commercially promote home ownership and legislative action.

In the 1960s, Laukka worked with The Near Northside Re-Development Agency, a community based organization established to guide the redevelopment of the near north side of Minneapolis. The agency focused on the growing need for market rate housing and led to the development of single-family housing, hailed as “The Suburb in the City.”  After being approached by Governer Wendell Anderson, Laukka helped develop the State Housing Finance Agency and chaired the Minnesota State Housing Code Advisory Board until a state-wide building code was in place. Most recently, he served on the Fairview Southdale Hospital board of trustees and chaired the development of its new Carl N. Platou Emergency Center opened August 2015.

James Solem

For more than 40 years, James Solem provided outstanding leadership and tireless work in real estate finance and public policy, supporting the development of rental and ownership housing for low and moderate income households. He was the executive director of the Minnesota State Planning Agency from 1970 to 1978, and served as commissioner of the Minnesota Housing Finance Agency from 1978 to 1994 – a position he was appointed to five times by three Minnesota governors. From 1994 to 2000, Solem was the regional administrator for the Metropolitan Council, leading the long-range planning for transit, wastewater, parks and community development in the seven-county metropolitan area.  From 2000 – 2006, at the University of Minnesota’s Center for Urban and Regional Affairs (CURA), he led a project to bring new ideas to the issues of affordable housing and regional growth.

Now retired from the Metropolitan Council, Solem is active with consulting and volunteer service. He is chairman of the board of the Community Reinvestment Fund and of the boards of Common Bond Housing Corporation and the Greater Minnesota Housing Fund. Throughout his career, Solem demonstrated an exceptional knowledge of operations and governmental polices, brought a high level of ethical standards to the real estate industry and championed those most in need.

The program is open to the public and the cost is $60. More information is available at http://www.stthomas.edu/centers/shenehon/minnesota-real-estate-hall-of-fame/

To register use the following link:    https://webapp.stthomas.edu/eventregistration/ust/register.jsp?eventcrn=B1973

The Minnesota Real Estate Hall of Fame now has 30 members. Previously named were:

  • 2010: Tony Bernardi, Lloyd Engelsma, Gerald Rauenhorst, William Reiling, Jim Ryan and Sam Thorpe Sr.
  • 2011: Robert Hoffman, Darrel Holt, Bernard Rice, Emma Rovick and five members of the Dayton family: Bruce and the late Douglas, Donald, Kenneth and Wallace.
  • 2012: David Bell, Robert Boblett Sr., Philip Smaby and Boyd Stofer.
  • 2013: Leonard Bisanz, Helen Brooks, Thomas Crowley, M.A. Mortenson Sr. and Kenneth Stensby.
  • 2014: George Karvel Ph.D., Cyril “Cy” Kuefler Sr., Jim Stanton

 

Retail Real Estate, Think Outside The Box, Twin Cities Real Estate

Eagan Outlet Center to Feature Snow Melter

The new Twin Cities Premium Outlets center opening in Eagan next month will feature a unique piece of equipment to help manage snow in the winter. Rather than store snow on site or pay to have it hauled away, the property will use a stationary snow melter made by Trecan, a Canadian company which specializes in the design and manufacture of the machines. With capacity to melt 40 tons of snow an hour, the snow melter will help the property management keep the center’s sidewalks and 1,400 parking spaces accessible to customers during the winter months.

The snow melter at the new Twin Cities Premium Outlets in Eagan (source: MSP Business Journal)

The Trecan snow melter at the new Twin Cities Premium Outlets in Eagan (source: MSP Business Journal)

The Trecan machine melts snow that is dumped in by plows by mixing it with hot water heated by a natural gas burner. The snow melt then drains directly to the municipal storm sewer. A filter collects trash and other debris before it enters the sewer.

The Twin Cities Premium Outlet will be (surprisingly) the first shopping center in Minnesota to feature an on-site snow melter. It will also be the first in Simon Property Group’s portfolio of 300 shopping centers worldwide, although the company also plans to install one in a Montreal mall opening later this year.

By using the snow melter, Simon hopes to keep operating costs lower for tenants. The machine can melt 200 cubic yards of snow per hour at a cost of about $110, substantially less than the cost for haul away and off-site disposal of a comparable amount of snow. Additionally, because the property won’t need space for snow mounds the developer was able to build fewer parking spaces and keep more of them available for customers during the winter months.

The 409,000-square-foot outlet mall is set to open Aug. 14th and will have more than 100 stores. It was developed by Simon Property Group and Paragon Outlet Partners.

Government Policy, Residential Real Estate, Uncategorized

A Look at Property Taxes Nationwide

With income tax returns completed and filed (hopefully on time), the next big tax payment many people across the country will make will be property taxes. According to the findings of a new residential property tax study from the Tax Policy Center, in 60% of U.S. counties the reported property tax burdens average between $500 and $1,500 a year. But that might only cover a month’s worth of taxes on a home in the most highly taxed counties.

Property Taxes by County

Average Residential Property Taxes by County (source: CNN)

Some of the highest average property tax burdens can be found in the New York. Westchester County, N.Y. ($9,647 a year) and Nassau County, N.Y., ($9,080) (both New York City suburbs) had the highest average residential property tax burdens. Many other counties in New York also have high property taxes, a result of duplicative local government units (one county alone had 941 separate governments, including towns and villages as well as police, fire, and school districts) and an education funding system that relies predominantly on property taxes.

On the other end of the spectrum, 24 counties nationwide had annual property taxes below Continue Reading

Residential Real Estate, Student Housing

MN Court of Appeals Upholds Winona’s “30% Limit” on Rental Licenses

In a case being followed by many college towns across the state, the Minnesota Court of Appeals recently upheld a City of Winona ordinance limiting rental licenses.  The ordinance caps the number of properties elgible for rental certifcation to 30% of the properties on a block. Licenses are granted on a first-come first-served basis. Rental properties existing prior to the adoption of the ordinance are exempt from the requirement.

The ordinance was adopted in 2005 as a result of an increase in the number of rental properties and concerns about off-street parking. A City task force found that rental housing comprised about 39% of Winona’s housing units, but were resonsible for 52% of complaints. The task force paid special attention to neighborhoods surrounding Winona State University, which has enrollment of 8,900 students, and found that rental properties tended to “become run-down and unnatractive.”

The appellants in the case are the owners of three house who were each denied rental licenses due to the 30% cap. One homeowner wished to rent his home while he was on military duty in Afgahnistan, while another sought to rent his property out after he was unable to afford his mortgage payments. Their attorney Anthony Sanders stated their case as “an issue of whether you can take a perfectly safe home and rent it out to perfectly safe tenants, of whether you can be denied that right because your neighbor’s already done it.” According the Sanders the plaintiffs will ask the Minnesota Supreme Court to consider the case.

In its ruling the MN Court of Appeals found that it could “easily conclude that the public has a sufficient interest in rental housing to justify a municipality’s use of police power as a means of regulating such housing.” In upholding the lower court’s decision, the Court of Appeals found that the 30% rule was rational, and did “not delegate legislative power to other property owners,” it affirmed the district court’s award of summary judgment to the City.

Real Estate Law, Real Estate Lending, Residential Real Estate

New Minnesota Law to Shed Light on Contract for Deed

A new Minnesota law set to take effect August 1st will require additional notification be provided to buyers in contract for deed transactions. In a contract for deed, the seller, rather than a lending institution, finances the buyer’s purchase of the property. The buyer takes immediate possession of the property and agrees to pay the purchase price in monthly installments. The seller retains the legal title to the property until the last payment is made and the contract is fulfilled.

Under the law passed in May, sellers will be required to provide notice to buyers that suggests obtaining an appraisal and inspection prior to signing a contract for deed, and that outlines the potential drawbacks of such purchase arrangements. Failure to provide this notice could result in a penalty of up to $7,500 for the seller. The Minnesota legislators behind the new legislation were motivated in part by a Star Tribune report earlier this year that documented potential abuses of the contract for deed mechanism. Many of the more than 1,000 deals examined by the newspaper found features that would make default likely for many buyers, including high interest rates, large ballon payments, and negative amortization. In many instances, contract for deed purchases were completed with no home inspection, leaving buyers responsible for correcting major code violations or safety hazards that a typical inspection would have revealed.

A 2009 article from the Minneapolis Federal Reserve highlights some of the pros and cons of contract for deed. A benefit for both sellers and buyers is that they are much faster and less expensive to execute than traditional mortgages, with no origination fees or high closing costs. Because there is no lengthy mortgage approval process, contracts for deed are appealing to buyers who are on time constraints or who do not Continue Reading

Industry News, Multifamily, Twin Cities Real Estate

Minnesota Shed 11,400 Jobs in April, but Metro Area Showing Growth

A press release from the Minnesota Department of Employment and Economic Development (DEED) highlighted 11,400 jobs lost statewide in April of this year. The largest losses occurred in trade, transportation, utilities, and government sectors. The information, education, and health care sectors all grew during the month.

DEED May 2013 Jobs Report

DEED May 2013 Jobs Report

The Twin Cities Metro Area has bucked the statewide trend, having added 26,000 jobs over the past year. A market report by Marcus & Millichap predicts that the metro will add 49,000 jobs during 2013, of which a significant number will be in the health services sector. This employment growth, couple with stronger renter demand, has kept multifamily vacancy in the range of 2.5%, among the lowest rates in the nation.

The Twin Cities metro has added jobs every year since 2009 (source: Marcus & Milllichap)

Multifamily vacancy has remained low despite increasing supply (source: Marcus & Millichap)

Commercial Real Estate, Development, Green Building, Industry News, Real Estate Trends, Uncategorized

A Fresh Vision for Richfield: Redeveloping the Lyndale Garden Center Site

When it comes to development, Colleen Carey, President of The Cornerstone Group, doesn’t believe in just razing one property to replace it with a run-of-the-mill mixed use concept.  Rather, her goal is to “transform the spaces that surround us into spaces that inspire us.”  Her upcoming project, which will transform an abandoned retail site on a core section of Lyndale Avenue in Richfield, will accomplish her company’s mission with a variety of unique components that connect housing and retail with principles of sustainability, community, and the arts.

The ambitious project involves several stages; first, there are new retail tenants to secure and a dilapidated greenhouse to rehab.  Carey’s ideal tenant mix includes a natural foods grocer and boutique retail, a local café, and she is exploring the idea of having a farmer’s market – either indoors or outdoors on the site.  Also incorporated in the former Garden Center building will be community space including room for performance arts.

The Cornerstone Group's Site Plan for the Lyndale Garden Center Redevelopment in Richfield, MN

The Cornerstone Group's Proposed Site Plan for the Lyndale Garden Center Redevelopment in Richfield, MN

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Commercial Real Estate, Industry News, Real Estate Trends, Uncategorized

MN State Shutdown Day 13: Impact on the Local Economy

capitol

While many Minnesota businesses and most of us in the real estate industry are not seriously impacted by the shutdown yet, there is still cause for concern.  Now in Day 13 of the shutdown, it is already one of the longest in our country’s history.  In the meantime while 22,000 state workers are out of work, the shutdown affects everyone from citizens who depend on social services to vacationers traveling to state parks to professionals who rely on state permits or licenses to do business.  In the press lately are many accounts of individuals who have been affected.  The question we are posing at St. Thomas, is how are local businesses and real estate being affected?  If the shutdown is having an impact on your business or real estate sector, we encourage you to submit your comments at the end of this post.

Several Minnesota agencies that provide support to businesses and real estate are experiencing adverse effects or are shutdown completely.  Minnesota Housing Finance, the state’s affordable housing bank, is under a partial shutdown.  Loan servicing is still available but new applications may be delayed due to reduced staffing.  Forgivable loans available through the state to homeowners affected by the North Minneapolis tornado are also on hold.

Commercial barge traffic on the Mississippi River may be restricted as early as this week, according to the St. Paul Port Authority, which is obligated to “keep its waterways open for commerce.”   BargeOn Friday, SPPA’s counsel Eric Larson appealed the state’s move to suspend its dredging permits during the shutdown, citing that closure of just one of its four river terminals will result in 6,000 tons of commodities per week being unable to reach its destination.  That’s the equivalent of 200 semi-trucks of product and includes staples such as livestock feed, water treatment chemicals, and recyclable metals, some of which are shipped from international locations.

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