After opening 128 units of affordable housing in St. Paul’s Lowertown neighborhood, developers Mike Hudson and Willy Boulay followed that up by moving in. The co-founders of Broadway Street Development now keep their offices at the Balsam on Broadway, a six-story, $70 million residential building that welcomed its first tenants in December.
Built to replace a one-story commercial-industrial building, downtown St. Paul’s latest residences are located at 540 Broadway St., just across Interstate 35E from Regions Hospital and north of Interstate 94 and CHS Field, an area better known for surface parking lots, government office buildings and industrial warehouses than chic living quarters.
That didn’t phase Broadway Street Development, which embraced the opportunity to install as much style as substance into a transit-connected structure with plenty of local flair and a wide range of rents. Those rents range from 30% percent area median income up to 80% AMI, rare breadth in an affordable housing industry that often leases out new construction at 60% AMI.
“We love downtown St. Paul. I live in St. Paul,” said Hudson, whose previous projects have included the Canvas Apartments, which opened last year in northeast Minneapolis.
Balsam on Broadway ranges from a single studio apartment to three-bedroom luxury units offering two bathrooms, balconies, in-unit washers and dryers and kitchen islands. Five units reserved for high-priority homeless placements receive support services from Simpson Housing Services.
Balsam on Broadway consists of 21 one-bedroom, 56 two-bedroom, 50 three-bedroom units and a single studio apartment.
It breaks down this way:
• 20% of the units are priced to be affordable to households earning 30% of area median income, with rents from $610 to $890 per month.
• 50% of units are targeted to households earning 60% AMI, with rents from $1,350-$1,860 per month.
• 30% of units are targeted to households earning 80% AMI, with rents from $1,500 to $2,500 per month.
Art by St. Paul-based muralists — including Hmong and Somali artists who invoke their heritage in paint — drapes the building’s ground-level lobby and greets elevator riders at each floor, a far cry from the generic pastels common to new housing developments. A sizable wall mural on the second floor, for instance, depicts the exterior of Lowertown’s original Red’s Savoy Pizza, which closed in 2017. Tricia Heuring, a consultant with Public Functionary of northeast Minneapolis, said she took pains to make sure artists lived or worked in St. Paul.
A grand opening ceremony was held on Thursday, March 13. 2025 for the Balsam on Broadway, 128 units of affordable housing in a new six-story residential building at 540 Broadway St. in Lowertown St. Paul.(Frederick Melo / Pioneer Press)
Burlesque of North America, a St. Paul-based graphic design firm that got its start in graffiti art, showcases its art collection in the sixth-floor club room, next to the roof deck. Back on the ground level, a children’s play area is fashioned like an indoor playground with an elaborate slide and climbing structure. An electronic screen displays the latest Metro Transit schedule in real-time.
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Cheaper units went fastest
Housing demand at the Balsam on Broadway had been brisk, until it wasn’t. Half the units were pre-leased at 30% and 60% of area median income and fully occupied between a Dec. 20 opening and Jan. 1, according to the developers. Boulay noted the Balsam on Broadway has drawn nurses who work at Regions Hospital and other downtown employees.
Now comes the tougher part — filling sizable units priced at 80% of area median income at a time when interest in luxury housing in St. Paul has slowed.
“They’re still moving,” Hudson said. “It’s a little closer to market rate, so it takes a little longer.”
At 1,275 square feet, a three-bedroom, two-bath luxury unit rents for $2,500 per month, and yes, that’s technically considered affordable housing for a family earning 80% of area median income, which was a household income of about $98,000 for a family of four last year. A one-bedroom, one-bath unit at 80% AMI rents for $1,500.
Additional amenities include a fitness center, in-unit washers and dryers, bike parking, pet spa and 5,200 square feet of office space that serves as Broadway Street Development’s new headquarters. The development, which has a solar array, is in the certification process to become a LEED Silver building and the developers hope to eventually obtain LEED Gold status.
A grand opening ceremony on Thursday morning drew St. Paul Mayor Melvin Carter and Council Member Cheniqua Johnson, who chairs the city’s Housing and Redevelopment Authority, and both delivered congratulatory remarks.
The $70 million development required an elaborate layer cake of financing to become a reality, including backing from the city of St. Paul, the Minnesota Department of Employment and Economic Development and Ramsey County. Additional financing partners included Ready Capital, US Bank, the Greater Minnesota Housing Fund and Colliers Securities. Development partners included LS Black Constructors, Tushie Montgomery Architects, Loucks, Inc., ERA Structural Engineering and the engineering firm Emanuelson-Podas, Inc.
It’s no secret that downtown St. Paul has lost some major retailers and office employers like Cray Supercomputers and TKDA Engineering over the years, leading to the virtual implosion of commercial buildings like Alliance Bank Center, which asked all its lease holders to move after nearly losing its utilities this past week.
Other housing projects in the works
Housing has been a brighter spot for downtown, despite high interest rates and opposition within the industry to the city’s voter-backed rent control ordinance.
Indianapolis-based developers Flaherty and Collins were recently awarded tentative developer status to move forward with 300 units of housing and additional commercial space in two buildings to be constructed on either side of the Green Line’s downtown Central Station off Fifth and Cedar Streets. The goal is to have a land purchase agreement in place with the city of St. Paul and the Metropolitan Council for a 20-story apartment tower and a six-story building by the end of 2026 and begin construction soon after.
Around the corner at 4th and Wabasha Street, PAK Properties is closing on the purchase of the historic Commerce Building, which spans 100 affordable units. Property owner CommonBond Communities had been unable to keep up with costs, and the purchase agreement was contingent on $1.22 million in debt forgiveness from the city, which the city council approved on Wednesday.
The sale of the Commerce Building, a former 1912 office tower, will result in the partial immediate repayment of municipal loans that would have otherwise come due to the city in 2037 and 2041, thereby freeing up more money for affordable housing development in the near future.
Just blocks away, PAK Properties is seeking financing for an office-to-residential conversion of the Hamm Building on St. Peter Street, with the goal of keeping the first floor and lower levels of the building unchanged, including the retail, restaurant and theater spaces, while adding 129 residential units on the upper floors.
Developer Carl Kaeding and the Kaeding Development Group are adding 174 high-end apartments to Stella, a former Ecolab tower on Wabasha Street, including multiple two-story penthouses. The historically-sensitive redevelopment of the 1970s-era office tower into housing will include 2,300 square feet of public-facing retail on the main floor.
Chris Sherman and Sherman Associates are weeks away from moving the first residents into the converted Landmark Tower on St. Peter Street, which has undergone its own transformation from an office tower into 187 units of residential housing.
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