Dinkytown apartment building on McDonald's site not ready, leaving U students to scramble

A six-story apartment building in Dinkytown will miss its late August opening, leaving scores of University of Minnesota students in a lurch as they scramble to find temporary housing or try to break their leases altogether.

Identity Dinkytown, a mixed-use development built on the site of the former McDonald's near the U, was initially supposed to welcome new residents Aug. 27. But in late July, leaseholders were told the building won't be ready in time, and they were given no estimate of when they might be able to move in.

CA Ventures, which owns and operates the property, said in a statement that its "partners ran into unforeseen and unavoidable delays during the construction process which have impacted the delivery schedule of the building."

The company said in an email to the Star Tribune that contractors had difficulty sourcing some construction materials and finding enough workers to complete the building. The email also said as of Friday, 573 people have signed leases with the company. In a note to leaseholders obtained by the Star Tribune, CA Ventures officials said "the construction team is doing everything they can to get doors opened."

Nationally, workforce and materials shortages have plagued the construction industry, according to reports by the Associated Builders and Contractors.

Lisa Buck, a Twin Cities-area photographer whose daughter is set to start her junior year at the U, said Identity won't let leaseholders out of their rental agreements. Instead, the company is offering to provide tenants either a $150 gift card for every day of their lease while they can't live in the building or an $80 gift card while CA Ventures foots the bill for a hotel stay.

Buck's daughter knew the building was under construction when she signed her lease. But she didn't think she'd end up with a one-hour commute to school from her parents' place.

"We took a risk," Buck said. "And now construction isn't done."

CA Ventures did not respond to questions about whether officials have contacted local hotels about bulk stays. The going rate for rooms in Dinkytown and around the U runs from $105 to $150 per night.

Ken Staloch, a city of Minneapolis building official, said it's common for large projects to open in phases. Property owners regularly apply for permits that allow residents to move into part of a building while the rest is under construction.

But the builders at the Identity, Chicago-based Catalyst Construction, haven't applied for a temporary certificate of occupancy yet. For the city to issue such a permit, the entire building's essential functions should be in good working order — think electricity, elevators, ventilation and plumbing.

The city issues those temporary licenses only when builders need time to finish up predominantly cosmetic touches such as installing lighting fixtures in individual units or doors and cabinets.

"If you were to walk in, everything should be in working order," Staloch said. "It isn't going to be sporadic, where maybe one floor is functional."

Once Catalyst submits an application, inspections will take time. The six-story building, initially pitched as a 25-story tower, contains 400 apartments, according to planning documents submitted to the city of Minneapolis in 2019. Identity Dinkytown encompasses 510,000 square feet, most of it residential.

"This isn't something inspectors can get done in two or three hours," Staloch said.

The contractor will also run into headwinds as the city's building inspections staff heads into its busiest season. Comparing the ratio of permit applications to available inspectors, Staloch said: "It's almost a perfect match this time of year."

Identity markets itself heavily to U students by touting its proximity to the Twin Cities campus and surrounding businesses. The building touts features such as a 24-hour fitness center, rock-climbing wall and washer and dryer in each unit.

Those amenities attracted Buck's daughter to the building. Now all she wants is to find another apartment in Dinkytown.

"She really wants to break the lease and just find a new place with her friends," Buck said. "Living at home, driving an hour to school, that's definitely Plan B."