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The City of Minneapolis has unveiled a draft Development Framework for the highly anticipated New Nicollet Redevelopment project, guided by input from thousands of community members. Through 14 in-person and virtual events, 2,245 survey responses, and 520 in-person interactions, the community’s voice is represented and shaping every aspect of this project.

During an open house at Whittier International Elementary School, the project team celebrated the public’s engagement and shared a bold vision for transforming the former Kmart site into a thriving hub of green space, a variety of housing options, and small business opportunities.

“Reconnecting Nicollet Ave. has been a decades-in-the-making vision, and we are going to get it done right,” said Mayor Jacob Frey. “For far too long, this space has separated our communities rather than united them, and this community-driven process is bringing them back together. Opening it up with people, a park, and public realm improvements will drive life into a place that everyone will want to be.”

Ideas abound for the site

The New Nicollet Redevelopment site spans 10 acres of land between the Midtown Greenway trail, Lake Street, First Avenue and Blaisdell Avenue. The City's plan includes the reconnection of Nicollet Avenue and creates more opportunity for

• Housing options for individuals and families of all income levels
• A new park and green spaces for community gathering areas
• Local businesses to meet daily needs of residents
• Incorporate sustainable design opportunities

“Residents are at the center of the New Nicollet Redevelopment project, which is a generational investment in our community. Thousands of residents have offered their feedback as part of the extensive community engagement guiding the project,” said Minneapolis City Council Vice President Aisha Chughtai. “I’m committed to ensuring impacted residents have a seat at the table and their vision guides every decision in this development.”  

A few of the top resident priorities emerging from community engagement include enhanced public spaces, a variety of housing choices for households at all income levels and a new grocery store.

"Whittier Alliance has been thrilled to partner with the City and other local community organizations to drive community engagement on this project. We know that effective planning happens when community members' voices are heard,” said Anna Schmitz, executive director of Whittier Alliance. “It's exciting to see the results of that engagement in this Development Framework--and, crucially, we know that engagement work can't stop here. We look forward to continuing to bring community members to the table as this project continues to move forward."

A win for community-driven planning

"The New Nicollet Redevelopment is a testament to the power of inclusive, community-driven planning. Thanks to the dedication of our planning staff and the thousands of residents who shared their ideas, we are creating a vision that reflects the needs and aspirations of the people who live and work in this area,” said Community Planning and Economic Development Director Erik Hansen. “This project will bring new housing, green space, and economic opportunity to the heart of Minneapolis, and we are excited to continue this work together."

The project team will seek approval of the Development Framework from City Council and the mayor this spring. Construction on Nicollet Avenue is expected to begin later this year.

Minneapolis reached a major milestone in 2024, surpassing $1 billion in construction value for the 14th year in a row. The impressive total reflects the city’s continued growth and residents’ confidence in Minneapolis as a place to live, invest and build.  

At a news conference Tuesday, Mayor Jacob Frey – flanked by Council President Elliott Payne, Council Member Jamal Osman, City leaders and development representatives – said the numbers signify how much people believe in Minneapolis’ future and are committed to making it stronger.

"No matter the scale or scope of the project, these numbers speak volumes: people trust Minneapolis. They see it as a city of opportunity, a city worth building in, and a city worth building on,” said Mayor Jacob Frey. "Surpassing $1.8 billion in construction value is no small achievement. I am incredibly proud of our outstanding CPED team and community partners, whose dedication ensures Minneapolis remains a city that people are eager to invest in and call home.”

A nod to affordable housing

Half of the highest-valued projects in 2024 are for affordable housing developments, showing the City continues to invest in publicly subsidized homes for residents who need them. The City also permitted smaller, residential projects like kitchen or bath remodels, home additions and more. Over the last several years, this has proven that residents not only want to move to the city but want to improve their homes to stay long term.

"These numbers represent the City’s deep commitment towards addressing the housing crisis,” said Minneapolis City Council President Elliott Payne, Ward 1. “Construction at this scale doesn’t happen at the whim of the market, but through focused and consistent dedication to housing policy that prioritizes the needs of the community.”

“I am very pleased to see the City continuing to invest in publicly subsidized housing for Minneapolis residents,” said City Council Member Jamal Osman, Ward 6. “Buying a home can be a struggle, so it is great to see efforts being made to help people stay in Minneapolis. Homeownership should be achievable for everyone in Minneapolis, and if the City continues investing in its future, that can become a reality for more residents.”

By the numbers, the City of Minneapolis issued 44,574 permits in 2024. There were 640 dwelling units permitted for new construction. The overall value for the year is more than $1.806 billion.

“The exciting part is that this work never stops. There are more significant projects in the future that will continue to build and enhance Minneapolis – for people and our community,” said City Operations Officer Margaret Anderson Kelliher. “It’s an important responsibility to build a future Minneapolis for generations to come.”

The top 10 projects in 2024:

• $586 million – Expansion of Abbott Northwestern Hospital’s Surgical and Critical Care Pavilion. This is the highest valued project since U.S. Bank Stadium was built in 2014.
• $45 million – Redevelopment of the former Wells Fargo bank site for Opportunity Crossing
• $39 million – Multi-phase development of the Artspace NKB Lofts
• $31 million – Rehabilitation of five buildings at Olson Court Apartments – Park Plaza and the new construction of a 119-unit building
• $24 million – Interior remodel of Minneapolis City Hall
• $22 million – Multi-floor remodel of Ameriprise office building
• $22 million – Construction of 110 units at Lakefield Apartments
• $19 million – Construction of a mixed-use building at France 50
• $17 million – Buildout of additional floors and office space at North Loop Green
• $17 million – Construction of a mixed-use building at Valiance

“This milestone is a testament to the collaboration and vision of our employees, city leaders, developers and residents, said Community Planning and Economic Development Director Erik Hansen. “As we look ahead, the projects on the horizon promise to continue reshaping Minneapolis into a city that thrives for everyone who chooses to open businesses and call it home."

New York, December 18, 2024 -- Moody's Ratings (Moody's) has upgraded the City of
Minneapolis, MN's issuer rating and the rating on its outstanding General Obligation
Unlimited Tax (GOULT) bonds to Aaa from Aa1. The city had about $900 million in
debt outstanding at the close of fiscal 2023 (December 31 year-end). The outlook has
been revised to stable from positive.

The upgrade to Aaa from Aa1 reflects the continued strength in the city's economic
and demographic trends, a consistently strong financial profile and declining long-term
liabilities.

RATINGS RATIONALE

The Aaa issuer rating reflects the city's position at the center of a large and diverse
regional economy that benefits from consistently low unemployment, strong labor
force participation and a growing full value per capita that now exceeds $160,000. The
Minneapolis economy benefits from several large and stabilizing institutions and
favorable demographic trends with a stable to growing population that remains
relatively young compared to an aging state and nation.

The city has a strong financial profile with an available fund balance ratio that typically
hovers between 45% and 50%. Finances will remain strong despite growing public
safety costs given a stable revenue base, sound financial management including
multi-year budgeting and a track record of the willingness and ability to materially
increase the property tax levy. The long-term liabilities ratio has declined to levels well
below 200%, which is in line with Aaa rated peers, and the fixed costs ratio
consistently hovers around 10%. 

The Aaa rating on the GOULT bonds is at the same level as the Aaa issuer rating
because of the city's full faith and credit pledge and the authority to levy a dedicated
property tax unlimited as to rate and amount to pay the bonds.

RATING OUTLOOK

The stable outlook reflects the expectation that the strong regional economy will
continue supporting sound economic metrics and that the city's consistently strong
financial profile will allow it to absorb cost pressures related to employee
compensation and public safety staffing.

FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
- Not applicable

FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
- A weakening of demographic trends or prolonged declines in labor force participation
trends, resident incomes, or full value per capita
- A materially weakened financial profile with an available fund balance ratio
approaching 30%
- A long-term liabilities ratio increasing to levels well above 250%

LEGAL SECURITY
The GOULT bonds are backed by the city's full faith and credit pledge and authority to
levy a dedicated property tax unlimited as to rate and amount. The bonds are
additionally secured by statute.

PROFILE
The City of Minneapolis is located in Hennepin County (Aaa stable) in eastern
Minnesota (Aaa stable) and is directly west of St. Paul, with the Mississippi River
creating the border between the two cities. Minneapolis is the largest city in the state,
with a population that exceeds 420,000 residents. Governmental services primarily
consist of police, fire, health services, public works and general governmental
functions. The city's major enterprise funds include sanitary sewer, stormwater, water
treatment, municipal parking, solid waste and community planning.