As students move in, community moves out

Joel Sawyer

Frank Zaragoza remembers a time when the Motley neighborhood of Southeast Minneapolis was a quiet place with a strong sense of community.
“Forty years ago it was like a little village. Most people who lived in the neighborhood owned their own houses,” he said. “Now, most of my neighbors are gone. They’ve been bought out by the University.”
Zaragoza, 69, saw the University swallow up large tracks of the neighborhood in the 1970s, building the Oak Street Parking Ramp where houses once stood.
Now he and other longtime Motley residents say the University is poised to deliver what could be the death blow to what’s left of the neighborhood by selling its remaining properties to developers bent on building apartment-style housing for University faculty, students and staff.
The struggle that has resulted over the proposed sale puts the University, the neighborhood, real estate developers and local politicians in a debate over Motley’s direction.
Some neighborhood residents want the 15 houses, three vacant lots and church owned by the University sold to longtime residents as owner-occupied housing rather than to developers such as Dinnaken Properties. Dinnaken, a subsidiary of Cargill, already owns about 14 percent of the rental property in the Motley neighborhood.
“What should be done is to enhance this community and the relationship with the University by making (the area) into another neighborhood,” Zaragoza said. “Or,” he added sarcastically, “chase everybody out and change the name from the Motley neighborhood to the Cargill neighborhood.”
Dinnaken or any other potential developer who might want to gut some of the remaining housing stock could face stiff opposition from neighborhood residents and local politicians.
Minneapolis Mayor Sharon Sayles Belton, City Council member Joan Campbell, 2nd ward, and state Rep. Phyllis Kahn, DFL-Minneapolis, are among several prominent figures who support owner-occupied housing in the neighborhood.
“The neighborhood needs homeowner occupants, not absentee landlords,” wrote Sayles Belton in a January letter to the University’s Board of Regents.
“Currently, more than 90 percent of the neighborhood is transient,” she added. “A plan which encourages homeownership would dramatically improve the long-term viability of the Motley district.”
So far, the University has been silent about the issue, saying it is still analyzing the situation and receiving input from interested parties.
But, pressure from citizens, local politicians and some unlikely neighborhood allies seems to have delayed the sale, which was scheduled to take place by the end of June but has now been pushed back indefinitely.
For Zaragoza, the real question is what role the University should play when it comes to surrounding neighborhoods.
“Does their responsibility lie in the interests of citizens or the extension of corporate America?” he said. “This is part of Minneapolis. It’s not the University, it’s not Cargill.”
Anatomy of a deal
University officials first proposed the Motley property sale to the Board of Regents last October. It was determined at that time that the housing no longer served University housing needs and should be sold to the highest bidder in a public sale.
The University is slowly selling off all its remaining off-campus housing units and is seeking to add about 500 more bed spaces on campus.
The issue was discussed again by the board in February after regents were told that residents in the neighborhood were concerned they would be out-bid by Dinnaken Properties for any property they might want to buy.
At the meeting Regent Wendell Anderson, who has since retired, said he would like the University to review each property on a case-by-case basis and determine if selling those properties to the highest bidder is in the school’s best interest.
“(They) need not accept the highest bid because the person with the deepest pocket would always win, and that’s not always in the University’s best interest,” Anderson said in an interview last week.
Anderson, who advocated expanded housing opportunities for students during his 12 years on the board, said he would like to see some of the Motley properties sold to families for owner-occupied housing.
“I believe where you have significant single-family home development neighborhoods are stronger, neighborhood public schools are stronger and people have more stake in the neighborhood,” he said.
After the February board meeting, University officials began preparing for the sale. The school’s office of Housing and Residential Life sent eviction notices in March to about 50 tenants who live in the 15 houses, asking them to vacate their homes by June 30.
At that time, the University’s Real Estate Office hoped to formulate a marketing plan for the property and begin the sealed bidding process by April 1, but complications set in as it became clear that there were strong opinions over what should be done with the properties.
The bidding date was pushed back several weeks and finally postponed indefinitely Thursday as University administrators sought more information with which to develop their marketing plan.
“The University needs to give additional time to consider what its own goals are in accordance with the Twin Cities’ (campus) master plan, and some of the goals that have been communicated to us by various constituency groups, including the neighborhood,” said University Real Estate Office Director Sue Weinberg.
The master plan is the University’s long-range strategic vision for the school’s architecture, landscape design and overall physical environment.
“At this point and time, I don’t have a clue what will be in that marketing plan. There are so many competing interests that we have to consider,” Weinberg said.
But competing interests such as owner-occupied home advocates might not stand a chance if the University follows its master plan.
The master plan
Clinton Hewitt, associate vice president for University master planning, said he couldn’t say specifically what the marketing strategy for the property would or should be, but speculated that some of the property could be reused if it were economically feasible.
You have to ask, Hewitt said, if the property “can be reused for anything, and can we have our investments produce a return, or will something else be better?”
Many in the neighborhood, such as longtime resident Paul Scheurer, think the properties are worth saving and point to an independent appraisal by local developer Jim Larson that states the properties are worth rehabilitating.
According to Larson’s report, the properties would be worth double to triple their renovation price of $30,000 to $50,000 if they were rehabilitated.
Unfortunately, the campus master plan might not have room for rehabilitated houses. The University wants the neighborhood to remain connected to the University, Hewitt said, “with a focus on providing a variety of housing for faculty, staff and students.”
And that “variety of housing” might not include owner-occupied housing.
“The University’s interested in a little more density (in the neighborhood),” said Ann O’Loughlin, the University’s community liaison to the neighborhood. “Single-home ownership does not provide accessible housing for faculty, students and staff, necessarily,” she added.
For some longtime residents, that probably means acquiescing to Dinnaken Properties, the student population and the “avalanche of beer cans” that comes with them, Scheurer said.
Scheurer, Zaragoza and others blame Dinnaken and the University for much of what they perceive to be the neighborhood’s decline.
Over the years, Zaragoza said, “there have been little or no improvements (in the area) other than having housing for a greater number of students and more cars and more noise.”
A case of misunderstanding?
Many perceive Dinnaken Properties as a money-hungry real estate developer bent on steamrolling the Motley neighborhood for profit, a perception Brian Liston thinks is false.
Liston, a property manager for Dinnaken, said his company doesn’t want to destroy the neighborhood, but rather seeks to enhance it by building new properties that fit the needs of the neighborhood.
“We see ourselves as a quality management company that offers quality housing for the University community,” he said.
Dinnaken owns 30 properties in Motley, including Dinnaken House, which was built in 1990 on the site of an abandoned industrial warehouse; Tairre House, built in 1995 on a site where four condemned and vacant houses once sat; and Argyle House, built last year to house the University’s Residential College.
Dinnaken has made it clear that it would like to purchase three properties for sale on the 500 block of Ontario Street. Control of those houses would give complete ownership of that part of the block to Dinnaken and would allow them to build a medium-density townhouse development.
If Dinnaken does purchase the properties and develop the block, Liston said they would attempt to reuse the houses before demolishing them by selling them to buyers who could relocate the structures.
That won’t help tenants like filmmaker Billy Golfus, a University graduate who has rented the same two-story wood frame house at 513 Ontario Street since 1969.
“I’ve been here 28 years, man. This is my home, my life, my whole identity,” Golfus said. “If I have to bid against Dinnaken, then forget it.”
Golfus wants to buy the property from the University, but the cost of outbidding Dinnaken and rehabilitating the house might be too much for him to pay.
“I’m stuck between a rock and a hard place. I don’t know what to do,” Golfus said.
For the time being, however, renters such as Golfus have been issued a brief reprieve. The University extended the eviction date 90 days for residents in the 15 properties while it formulates its marketing strategy.
Motley’s future
Until the University develops its marketing plan, prospective buyers of the sale properties are left in the dark.
The University could agree to give owner-occupied preference to potential buyers regardless of price, or could target those properties to developers like Dinnaken.
“With all the interest out there, I really do think there will be some concessions made, and we won’t be selling every property for the best return we can get,” Weinberg said.
In the meantime, Weinberg advises any prospective buyers to contact the University, informing the Real Estate Office of their desire to buy any of the properties.
Whomever purchases the properties will likely receive financial assistance. The Prospect Park East River Road Improvement Association has already pledged $100,000 from its Neighborhood Revitalization Program fund to be used in Motley.
The money will be issued in $5,000 grants and can be used for down payments, closing costs or the rehabilitation of properties in the neighborhood.
But because of Motley community demographics, actual interest in purchasing might not be great. Less than 15 percent of the homes are owner-occupied and few in the primarily student-occupied neighborhood, except homeowners, feel very strongly about the issue.
That’s why Scheurer thinks it’s so important to take advantage of the University’s property sale.
“With a chance to add new homeowners — 15 — we can restore what it means to be a neighborhood,” he told members of the Motley neighborhood Task Force last week.
Even Liston, who serves on the task force, agrees — to an extent.
“I think it’s a great opportunity for additional home ownership in the neighborhood,” he said. “But there’s also a need for smaller, medium-density developments.”
Whatever happens, it’s unlikely that Motley will ever return to being the neighborhood it was 40 years ago.
“I don’t anticipate the campus going anywhere too quickly … and I think we all have to be sensitive to that,” O’Loughlin said. “I think we have to find (middle ground) together or try to. I’m not sure we’re going to, but we need to work at that.”