Business & Economy

Upper Harbor Terminal: Can Minneapolis invest in its north side without pushing people out of their neighborhoods?

A woman standing on the stoop of a house with two children.
Lifelong north Minneapolis resident Markella Smith door knocked in the McKinley neighborhood last year. Smith, executive director of the neighborhood organization, also serves on a city committee working to ensure north side residents guide the Upper Harbor Terminal redevelopment project.
David Pierini for North News

This story was reported and produced in partnership with North News, a community news source in north Minneapolis. The digital version was written by North News editor Kenzie O’Keefe. Freelance journalist Melissa Townsend reported and produced the audio stories, which will be posted here after they are broadcast.

By Kenzie O’Keefe, North News

Markella Smith, 34, “lives and breathes” Minneapolis’ north side. She grew up there, built two small businesses and is active in the neighborhoods. She is rooted in the area’s past and present.

So, it surprised her last year when she first heard that plans were in motion for a massive $200 million Mississippi riverfront development on her neighborhood’s doorstep.

The city and its chosen developers were preparing to transform the old Upper Harbor Terminal — 48 acres of prime riverfront land owned by the city — into a mix of parkland and private development: housing, storefronts, a music venue and possibly a hotel.

While Upper Harbor promises jobs and income, Smith and others fear it could drive up rents and taxes and drive out longtime residents, particularly people of color. Equally bad, it could end up a playground for mostly upper-income outsiders with the locals relegated to service jobs.

“We are not just the help,” Smith said recently, recalling a comment she heard at a community meeting about the Upper Harbor. “We don’t want to just be the minimum-wage workers at that place. We want to feel included.”

Over the past year, local leaders have pushed to give the north side more control over the project.

Industrial buildings near the river.
The 48-acre Upper Harbor Terminal sits just over 2 miles north of downtown Minneapolis in the city's McKinley neighborhood.
Photo by North News

But as the City Council moves toward a June vote with some construction expected to start next year, it’s still not clear how the neighbors will shape the project so it works for them. Signs of neighborhood gentrification not tied to Upper Harbor are already beginning to show.

For many north-siders, who for decades have heard economic promises made and broken, the question now is: Will this time be different? Can something be built that centers current residents culturally and creates wealth for them?

“I think that it could be a very good opportunity for north Minneapolis if it's done the right way,” Smith said. “But there are things and ways that it came about where I get the skepticism. I get the mistrust.”

‘Seat at the table’

North side riverfront development has been talked up for decades, but it took Asian carp to help force the issue to the surface.

Fears of the invasive carp pushing farther north up the Mississippi River led to the closure of the Upper St. Anthony lock in 2015. That effectively ended barge traffic at Upper Harbor, above the lock, and widened the prospects for development.

In January 2017, the city awarded exclusive development rights to a team comprised of United Properties, First Avenue and Minneapolis-based Thor Companies, which was one of the nation’s largest black-owned construction firms at the time.

But as it pushed ahead, many residents remained in the dark about Upper Harbor.

A person standing at a podium in front of a projection screen.
Since being elected in 2017, City Council member Phillipe Cunningham has fought for his constituents' voices to be centered in the Upper Harbor redevelopment process.
David Pierini for North News

City Council member Phillipe Cunningham estimated the Upper Harbor planning process he inherited after his election in late 2017 was already about 60 percent along.

“I was completely overwhelmed by the project because it was so far down the tracks,” said Cunningham, whose ward includes the land.

Cunningham, who was elected on a progressive, racial equity platform, pushed to get the neighborhoods a greater voice in the project. In May 2019, the City Council established the Collaborative Planning Committee, a 17-member advisory panel that includes Markella Smith and other north and northeast residents stakeholders.

In meetings, it’s gathered input with the intention of putting forward ideas driven by community members.

“There are possibilities that are tangible. This is an opportunity to do something different,” said DeVon Nolen, who since last year has been leading a separate, monthly Upper Harbor community discussion funded by the McKnight Foundation and led by Pillsbury United Communities and the Public Policy Project.

The “phase 1” concept plan for Upper Harbor won support from some neighborhood residents and scorn from others when it came for a City Council vote in March 2019. While some applauded the design plan and wanted it to proceed, others pushed back.

Sebastian Rivera, a community organizer who lives just blocks from the Upper Harbor, protested the plan. He doesn’t believe any of the land should be owned by private developers.

“I want the land to be owned by Native American people, and I want the physical structures to be owned by black North Minneapolis folks. That can be done,” he said. “I want the community to actually come out and create that for themselves.”

Eco Harbor Co-Creation Team, representatives of East Phillips community
The Eco Harbor Co-Creation Team and representatives of the East Phillips community, including Catherine Fleming (third from right), gather outside the Minneapolis City Council chambers, where the city’s Economic and Regulatory Services Committee postponed a vote on the Upper Harbor Terminal concept plan in January 2019.
Gabe Kwan | MPR News 2019

Catherine Fleming, a north side resident who also protested at City Hall, raised concerns about the amphitheater. She said she was dismissed as “obstructionist.”

“We always wanted to have something built at the Upper Harbor Terminal, just not necessarily a music venue first,” she said, noting that she wanted to see housing and urban farming prioritized at the time.

Smith said that while the CPC’s ultimate influence beyond “informed advice” isn’t yet known, she is an optimistic person who is choosing to trust that the city will do right by north siders in this process.

“If we don’t try, we’ll never know,” she said. “This is kind of like the first time I’ve had a seat at the table,” she said. “If this is an opportunity to change how things are handled in the future, I’m all for it.”

Trendy bars and tension

There’s no doubt north Minneapolis could benefit from the economic boost of a developed Upper Harbor Terminal.

Segregated by redlining practices and racially restrictive covenants, north Minneapolis is home to the city’s largest African American population. Many lost their homes in the foreclosure crisis of the early aughts. Just a few years later, a 2011 tornado further ravaged the area’s infrastructure. Many people haven’t been able to catch a break.

Replacing industry with parks and housing could also boost an area that suffers from the effects of local pollution and has the highest asthma hospitalization rate in the state.

At the same time, residents know the project could ultimately push them out.

Home values — and property taxes — have been rising on the north side, thanks to the city’s already tight housing market, and the signs of gentrification and displacement are there, said north side resident C. Terrence Anderson, director of community based research at the University of Minnesota’s Center for Urban and Regional Affairs.

Some signs are clear. New breweries and a distillery have popped up along Glenwood Avenue, the north side’s southern border.

A swanky natural wine bar, an upscale classic cocktail bar, and a shop filled with potted cacti many of which cost over $100 apiece have recently moved into its eastern edge.

Meanwhile, developers hope to turn Broadway Pizza, a beloved community institution on the riverfront, into “affordable” housing.

Residents want more restaurants and entertainment amenities but they’d prefer them to be homegrown.

“It’s just so unfortunate that the only way that we can get invested in is if white people move here and if they decide that they want to capitalize off of something over here,” said Roxxanne O’Brien, a longtime north side resident, mother and organizer.

At the outset of the project, some were soothed by Thor’s presence on the development team. They would ensure the community was protected — and profited.

But Thor, the only partner based on the north side, shut down amidst financial problems just after the concept plan vote.

A man standing in the snow in front of a dome-shaped building.
Paul Bauknight
Christine T. Nguyen | MPR News

In November, CPC members Paul Bauknight and Tessa Anttila resigned after concluding the “project can not achieve its lofty goals of equity and inclusivity with a mostly top down structure that does not share power and is unwilling to consider alternate strategies or timelines to get the work done.”

Bauknight, a north side resident since 1989, said in an interview that he wants to see the process slowed down and for the community to “own the vision.”

“If you want equity, you’re going to have to work differently,” he said. “You would have had to say from day one: The market will not be the driver for how we do our work.”

Jake Virden, an organizer who grew up in northeast Minneapolis, agrees. He protested the concept plan last year and has since created a podcast critical of the development process.

“The city should stop the project,” said Virden. “There is no justification for city-owned land to be transferred into the hands of wealthy white people from outside of North Minneapolis.”

“I don't think you have to start from zero or scrap everything involved in the project, but the exclusive rights agreement and the legal terms with the developers, I think now should be null and void,” he said.

A man in an orange hat speaks into a microphone.
Jake Virden speaks at an Upper Harbor Terminal learning table meeting inside of the Minneapolis Urban League on Jan. 15, 2020.
Evan Frost | MPR News

Despite the tension, Cunningham said the CPC and development team are on track to collaboratively produce a draft of a coordinated plan for public review by the end of March.

The City Council must approve a coordinated plan by early July to be on schedule to spend the $15 million in state bonding money allocated in 2018 for public infrastructure development at the Upper Harbor.

Cunningham and Erik Hansen, who is leading the project for the city’s planning department, say getting an extension on the $15 million is not feasible. The city has to have a full funding agreement in place and start spending the money by Jan. 1, 2022.

The city is seeking another $20 million in bonding money this year for the Upper Harbor music venue. State Rep. Fue Lee, a DFLer who represents the Upper Harbor district, plans to write the bill seeking it.

Who owns it?

DeVon Nolen says the community’s desire is clear at this point: “We want to be the direct financial benefactor.”

But figuring out community ownership is the most challenging component of the project right now, said Cunningham. “We don’t really have a lot of good examples in this country.”

In recent months, the idea of creating a community development corporation has surfaced. Led and run by north siders, it could have the technical capacity to own land and enter in community benefits agreements with the developers.

Brandon Champeau from United Properties says his team is supportive of community ownership, and they’ve hired Othello Meadows, the leader of a similar project in Omaha, Neb., to advise them.

“Transferring public land into private ownership has never been a requirement for United Properties for Upper Harbor,” he said, adding that he is “willing to work with a financeable ground lease structure” if the community prefers it.

People at a mailbox in front of apartment buildings.
75 North Revitalization Project site in Omaha, Neb., is home to a mixed-income neighborhood filled with sleek, modern apartments and townhouses, a food hall, an event venue with a huge lawn and other amenities.
Kent Sievers for MPR News

In north Omaha, Meadows’ community-development organization, 75 North Revitalization Project bought more than 40 acres of land with the backing of a local foundation. The site is now home to a mixed-income neighborhood filled with sleek, modern apartments and townhouses, a food hall, an event venue with a huge lawn and other amenities.

A man in a suit standing beside a window
Othello Meadows
Chardale Barnes | Courtesy of 75 North

Meadows said buying all the land gave the community more control over the development.

He said if transforming big projects like these are left solely to the developer and the city, even if they have the best of intentions, “there’s just going to be so much they don’t know about those communities.”

First Avenue owner Dayna Frank has said she is open to a more community-centric ownership model for her business’s stake in the site: The 7,000 to 10,000 capacity music venue city leaders say will help drive the entire project.

She has pitched a model where a community entity, like a community development corporation, could own some or all of land and then lease it back to the city so it is eligible for bonding dollars. The city would then sublease it to an operating entity, First Avenue.

Omaha residents say it’s important for the community to own the land
by Melissa Townsend

“We don’t want to own this,” she told the crowd at a January meeting on community ownership.

Frank has publicly discussed a plan to funnel a percentage of ticket sales into a fund for north Minneapolis. A CDC could end up being the distributor of those funds. Creating a workforce development program for young people at the venue is also part of the mix.

Frank’s willingness to get tactical about community benefits has built trust among many north siders.

Markella Smith said she believes Frank has a “genuine interest” in making sure that community wants are “actually implemented.”

Two people looking over a sheet of paper.
Roxxanne O'Brien (center) looks over a script for a video with Rashaunea Ambers-Winston (left) on Feb. 5, 2020 at Juxtaposition Arts in north Minneapolis. O'Brien is a longtime north side resident, mother and organizer.
Christine T. Nguyen | MPR News

Roxxanne O’Brien believes the plan has the “political” momentum it needs to progress.

She says she has “some hope” that the current community will be served well. But she is still skeptical of larger forces.

“The system is not my ally,” she said. “The situation makes my stomach uneasy.”

Those invested in the city process don’t want to see it started over, even as some remain skeptical.

“I think shutting it down is a big mistake,” said Smith, “We have empty space. We have unused space. We don’t have access to the river like we should ... if we keep it going, we have the opportunity to seriously benefit from this.”

“It is easy to believe a narrative that the process is broken rather than staying in a process and making it right,” said Cunningham.

Two people sit at a table in a community room.
First Avenue CEO Dayna Frank (left) and United Properties senior vice president Brandon Champeau (right) participate in an Upper Harbor Terminal learning table meeting inside of the Minneapolis Urban League on Jan. 15, 2020.
Evan Frost | MPR News

“This is how development works,” said Nolen. “Developers do development to make money. What I do know is that the developers who are part of this project continue to show up and that does not happen very often.”

It’s a misconception that the north side community has no power here, she added.

“It’s difficult to imagine that this can actually be different because there’s a long history of divestment and disinvestment that has happened,” she said, adding, “We can do this. We’re doing it.”

Reporter Melissa Townsend contributed to this story.