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Housing proposed for Red Rock Corridor in Newport

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news Cottage Grove, 55016
Cottage Grove Minnesota 7584 80th Street South 55016

Branding of the Red Rock Corridor in Newport continues as the city and the Washington County Housing and Redevelopment Authority are proposing more than 400 new low-income and market rate residential units as part of a collaborative long-term effort.

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In January, the HRA and city officials designed infrastructure improvements near the future Red Rock Transit Station, which includes a stormwater management plan, new residential and retail development and the creation of a marketable brand for the transit corridor.

Last week, the HRA unveiled plans for Red Rock Crossing, a prospective mixed residential and retail development that would occupy land north of existing 21st Street, near the Highway 61 and Interstate 494 interchange. Deputy Executive Director Melissa Taphorn said the combined branding message and plan for Red Rock Crossing show “significant promise for redevelopment” within Newport.

According to preliminary plans, 461 new low-income and market rate residential units are expected, which includes 62 senior apartments and 19 townhomes.

Construction of a low-income, multi-unit residential complex would be the first phase, followed by construction of a market rate multi-unit complex. Despite hesitation from members of both the Newport City Council and Planning Commission about a low-income housing unit being the initial build, Taphorn said design standards will remain high.
“The complexes will be attractive regardless of income,” she said.

The average annual income in the city of Newport is roughly 30 percent lower than that of cities of comparable size throughout the metro, HRA Project Manager Kathryn Paulson said. Just shy of $40,000 per year, she said that income is still around $3,000 short of affording the median rent in Washington County.  

“Around 47 percent of the county’s renters are cost burdened,” Paulson said, adding the construction of quality low-income housing would filter money back into the community as more renters would live and shop closer to home.

Paulson said recent census records also show an aging community and shrinking household sizes, which is reflective in the overall population. In 1970, the median age was 24, whereas in 2010 it was 37. The average number per household in 1970 was 3.5, and just 2.5 in 2010. The most recent population number puts Newport at just over 3,400,  about 300 persons than in 2000.

“(Redevelopment) captures economic benefits from the new units, it provides an updated housing stock and it attracts younger households,” Paulson said.

While both members of the Newport City Council and Planning Commission were in support of bringing in new residential options, some were concerned about building north of the existing rail line. Planning Commission member Dan Lund said he did not favor locating new infrastructure, which emphasizes outdoor green spaces and connections to the nearby trails and Mississippi River, so close to industrial landscape.

“I’m not against the first development being low-income housing, but rather that it’s on the north end,” he said. “No one wants to be surrounded by industry.”

On the proposed Red Rock Crossing development site is the trucking services company Wilson Lines. Adjacent from the property is other industrial businesses including Newport Cold Storage, Metropolitan Gravel and other warehouse-type uses.

Despite Lund’s concerns, Mayor Tim Geraghty said he was confident the units would rent.

“These developers wouldn’t invest their time, their energy and their money into development that wouldn’t be occupied,” said Stacie Kvilvang, senior financial advisor at Ehlers.

Paulson added that the developers see the north end of Newport as advantageous with its proximity to the future Red Rock Transit Station. She said renters will gravitate toward living quarters near public transportation.

“This stage one has to be really, really good,” Lund stressed.

Small investment, big return

Kvilvang also highlighted the projected return from the infrastructure improvements and redevelopment as being a significant net gain for both the city of Newport and Washington County over time.
Currently, the market value of the developable property within the Red Rock Corridor is around $4.8 million. However, once all redevelopment has occurred, including the construction of Red Rock Crossing, Kvilvang estimated the value to be around $55.5 million, about a 1,134 percent increase in value.

“This has no new impact on the city’s budget,” she said because the redevelopment is occurring on land with existing streets and utilities. “No new plows are needed because there are no new real streets. There is no increase to the amount of city staff needed. And police calls might increase but it isn’t expected to be enough to necessitate more police. All it adds is new valuation.”

Kvilvang said roughly 85 percent of the development will be funded by private investors and construction firms, and the rest will come from grants and TIF district funds.

The city is also expected to submit an application for a Metropolitan Council grant for money to get the first phase of the project off the ground.

While the groundbreaking on Red Rock Crossing is at least two years out yet, both the Newport City Council and Planning Commission expressed their support of the project.

“I think we just have to have faith that this will move forward,” commission member Tony Mahmood said. “Part of this is I think we have to start now otherwise it will be more and more expensive the longer we wait.”

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