Get to Know StuartCo

Bloomington-based StuartCo, which has an agreement with Southdale Center owner Simon Property Group, is pitching 232 market-rate apartments at the northwest corner of York Avenue South and 69th Street West. (Photo: Scott Theisen)

Bloomington-based StuartCo has stepped in as the developer for a proposed market-rate apartment project on an underused piece of land at Southdale Center in Edina.

Conceptual plans for three buildings were presented Wednesday evening to the Edina Planning Commission.

The Indianapolis-based Simon Property Group Inc. owns the Southdale mall and the land where the project would be developed.

“We feel that this site deserves an upper end, Class A project,” Ryan Dunlay, vice president of development and acquisitions for StuartCo, told Finance & Commerce on Thursday. “The demand is there, and we’re going to do something that the site deserves.”

Dunlay called Southdale a “landmark” and said the apartment project would benefit from the amenities in the area, a strong retail corridor including the Galleria, a SuperTarget and other shopping centers.

Previously, an Indianapolis-based developer, Flaherty & Collins Properties, was exploring the project but is no longer involved.

The proposal outlines three buildings of varying heights with a total of 232 units and underground parking on a 5.1-acre site currently used as an overflow parking lot. One building would have 10 floors, another would have six and the third, three.

StuartCo has tapped Minneapolis-based BKV Group as the architect. The project does not yet have a formal name.

The complex would be developed at the southeast corner of the Southdale site, at York Avenue South and 69^th Street West.

No vote was taken on the plan on Wednesday. In Edina, the initial “sketch plan review” process offers developers a chance to get early feedback on a project before submitting formal plans.

“There was a lot of discussion about the site plan,” said Cary Teague, planning director for the city of Edina. “I didn’t hear any concern over height or density. I think in general it was well-received. They described it last night as very upscale.”

A representative of the Simon Property Group could not be reached for comment on Thursday.

“I guess you could call it a joint venture with Simon,” Dunlay said of the deal structure. “We’re excited about this project and the partnership.”

Dunlay hopes to break ground on the project in spring 2013.

Southdale Center in Edina, built in 1956, remains an iconic local property. Owner Simon Property Group is renovating the mall. (Submitted photo: CoStar)

Finance & Commerce is tracking more than 13,500 apartment units that are under construction, proposed or completed across the metro area. While many of those projects are in core areas such as downtown Minneapolis, StuartCo has found opportunity at suburban sites.

StuartCo is developing the 234-unit Genesee project in Bloomington, set for completion in mid-September, and the 124-unit View at Long Lake in New Brighton, set to open in mid-June.

Dunlay said that StuartCo finds “less competition” in the suburbs and added that most suburban markets have not had any new apartments built in recent years.

Minneapolis-based Marquette Advisors reported apartment vacancy in Edina at 2 percent at the end of March, lower than the overall Twin Cities vacancy rate of 2.8 percent. Marquette Advisors reported vacancy rates of 1.9 percent in Bloomington and 2.7 percent in New Brighton at the end of the first quarter.

The Simon Property Group is renovating Southdale Center. In April, the Edina City Council voted 4-1 to provide Simon, which bills itself as the “largest real estate company in the world,” a$5.1 million interest-free loan toward the project. The renovations are set to be complete in November.

On Thursday, Simon announced five new tenants that plan to open stores in the mall: Lucky Jeans, Madewell, Sephora, Soma Intimates and White House/Black Market.

Finance & Commerce reported in February that Edina-based Lund Food Holdings Inc. has a proposal to redevelop its Byerly’s grocery store site at 7171 France Ave. S., a few blocks south of Southdale. The plan calls for a new store, additional retail and 163 market-rate apartments on the property.

“I just talked to them a couple of days ago, and they are working through the plan,” Teague said of Lund Food Holdings.

Dunlay said that while numerous metro sites are being shopped for potential apartment developments, StuartCo is remaining selective.

“We’re still seeing a lot of sites … we’re being very particular on what appeals to us,” Dunlay said.