Home on the Hiawatha

Development along light-rail transit line exceeds early projections

If you build it, will they come? After decades of debate, the region in 2001 began building its first light-rail transit (LRT) line, along Hiawatha Avenue in Minneapolis. The project required a huge investment of time, labor and money -- $715.3 million from federal, state, regional and county sources.

Public investments for the Hiawatha line were approved, in part, because planners predicted significant investments in nearby business and residential development. Has the project lived up to the dream?

Housing units above commercial and retail shops are typical of transit-oriented development. Pictured here is the new Oaks Hiawatha Station at 46th St. and Snelling Avenue, one block from the 46th St. LRT station.

After just one year of full operation, the answer is a solid “yes.” LRT is more than fulfilling its promise to attract both riders and development.

In its first year of full operation, Hiawatha LRT attracted 7.8 million riders, exceeding pre-construction estimates by 58.2 percent. By October 2005, ridership had surpassed projections for 2020, according to Bob Gibbons, director of customer services at Metro Transit. Forty percent of Hiawatha riders are new to transit. The majority of riders take the light rail to and from work, reducing traffic congestion and lessening competition for downtown parking spaces.

Housing construction booms along line

Before construction, planners predicted the areas surrounding LRT would draw 7,000 new housing units by 2020. By the end of 2005, more than 5,400 units were completed or in construction, and the City of Minneapolis had processed permits for 7,000 additional units for construction by 2008, according to the city planning department.

“Before the advent of light rail, the Hiawatha corridor in south Minneapolis had been stagnant for some time, dominated by vacant or underutilized industrial land,” said Katie Hatt, executive director of the Longfellow Community Council, which oversees several neighborhoods just to the east of Hiawatha Avenue in Minneapolis. “Now we’re seeing creative development proposals that will increase the diversity of housing types in the neighborhoods and connect services and jobs to housing. It’s a very exciting time.”

See a list of new housing in the corridor.

Commercial activity is brisk

Commercial and retail developments sprouted at both ends of the corridor between 2000 and 2005. Small retailers, restaurants and coffee shops opened in neighborhoods along the line. LRT delivers expanded access to local entertainment venues – including Block E, the Metrodome and the Mill Ruins Museum – as well as to several new corporate headquarters that opened in downtown Minneapolis between 2000 and 2005.

At the other end of the line, the region’s first IKEA store opened on a site near Hiawatha light-rail in Bloomington, and the Mall of America, which boasts its own LRT station, is also expanding.

“We know that some of this growth would’ve happened without LRT,” said Metropolitan Council Chair Bell, “but the line has without a doubt been a powerful catalyst for both commercial and residential development. LRT supports the growth by offering people an easy connection between where they live, work and shop. And every car we keep off the region’s roadways helps to ease traffic congestion.”

Existing businesses report more activity

Many existing businesses have reported more customers and increased revenues as riders patronize local venues near the stations. Prairie Dental, a downtown practice, now calls itself Nicollet Station Dental, and a farmers market was established within steps of the Lake Street/Midtown station. Two new grocery stores are planned on Hennepin Ave. in downtown Minneapolis near the line.

The Hiawatha light-rail train passes near the Reflections Condominiums, under construction in Bloomington.

“It’s like free advertising,” said Brett Mattson, owner of Caps Grille, located at 50th Street and Hiawatha Avenue. “The train stops right in front of our building. People see our restaurant filled with lots of happy customers, and they decide they should check us out.” Mattson fills an extra 10-15 tables each week as a result of LRT. “These are new customers,” said Mattson, “and they say they’ll be back.” Downtown Minneapolis restaurants have seen dramatic impacts. “The Hiawatha is a wonderful, wonderful thing for downtown,” reported Jim Burroughs, general manager of Old Chicago. The rail line “has brought people back to the city, and has had a tremendous impact on our business.” Burroughs credits 75-100 customers per game to free LRT passes the restaurant provided to its customers during the 2004 and 2005 Vikings’ seasons. According to Burroughs, patrons appreciate the convenience of the light rail. “They don’t have to fight traffic, they don’t have to pay $25 or $30 to park, and they don’t have to worry about driving home,” he said.

Property values near line show greater increases

Matt Mullins, a senior research analyst at Maxfield Research, said he’s seen considerable changes in the real estate market along the Hiawatha corridor. "Major public investments like the Hiawatha create opportunities for community building," he said. "They increase property values and help curb sprawl."

Preliminary data published by the Minnesota Department of Revenue confirms increased property values. Real estate sales prices in the corridor (exclusive of downtown) rose 83 percent between 2000 and 2004, while real estate values in Minneapolis as a whole climbed 61 percent, said Todd Graham, research director for the Metropolitan Council. The 22 percent difference is comparable to transit-oriented development (TOD) impacts in other cities, according to a report published by Maxfield Research.

Mullins suggested the market for Twin Cities TOD projects will mirror national demand, which is likely to double by 2025. "Transit-oriented development appeals to people in the new housing market. Aging baby boomers, immigrants and younger adults prefer denser, more urban environments with convenient access to goods and services,” he said. “They prefer to use public transit and other alternatives, rather than depending on automobiles.”