The St. Paul City Council may relax building restrictions on a large swath of Grand Avenue, where height limits on new construction have preserved a beloved streetscape but also stifled new development.

Since the East Grand Avenue Overlay District was created in 2006, limiting new buildings to three stories or less, almost no development has happened on Grand between Ayd Mill Road and Oakland Avenue. City leaders wanted to preserve the character of the neighborhood, where businesses operate out of bungalows and historic brick buildings.

In 2021, hundreds of neighbors protested when a developer sought variances for an 80-unit luxury apartment building. That property, the Kenton House, is now almost fully leased and has two restaurants on the ground floor, with a third opening soon.

"It kind of proved the point — it doesn't ruin or destroy the character of Grand, like some of the opponents had suggested," said Ari Parritz, part of the project's development team. "If anything, I think people have seen how some new development and new businesses can really interject growth and energy."

Following the departures of national retailers Pottery Barn and Anthropologie, as well as local mainstays like Tavern on Grand and Salut Bar Americain, more people in St. Paul see a need to loosen the rules for development.

Simon Taghioff, president of the Summit Hill Association, said concerns about Grand's future have started to unite neighbors who were previously divided over their hopes and visions for the commercial corridor.

"Everyone has sort of seen that it needs to reinvent itself," Taghioff said. "I think there's a lot more kind of willingness in the community to come to the table and to figure out the best way for that to happen."

Under a proposal to alter the special zoning district, building height restrictions would be removed, though buildings taller than 40 feet would have to be designed so they don't loom over sidewalks. Windows, awnings, porches and other frontage elements would have to contribute to a lively pedestrian experience.

Some have argued that the proposal does not go far enough and call for a complete repeal of the regulations.

"Wealthy NIBMYs and the restrictions of the East Grand Overlay District have stymied and delayed projects that would have bought needed reinvestment to Grand Avenue," said Dan Marshall, owner of Mischief Toy Store on Grand, during a City Council public hearing Wednesday.

Council Member Rebecca Noecker, who represents the area, said she thinks the proposal represents a compromise reached by residents, business owners, developers and others who served on an advisory board.

"I think these zoning changes go a long way towards making it more possible for development to happen at the density we need on Grand, in a way that still preserves that special feel of being on Grand Avenue," she said.

Noecker also said she's been exploring state funding for the corridor and has had talks with Metro Transit about experimenting with a trolley service.

"There's just a lot of good momentum here right now," she said.

Property owners are in the process of filling vacant storefronts. The Tavern on Grand space will be filled by first-time restaurateur Todd Russell, a St. Paul native who owns the building. Baby Baby, a clothing store in Rochester, is opening a St. Paul location in the former J.W. Hulme leather goods shop.

An out-of-state pension fund, the State Teachers Retirement System of Ohio (STRS Ohio), drew criticism late last year following the departure of several large tenants. Sara Martin of JLL, the group's real estate broker, said they have been working behind-the-scenes for months to find tenants that are a good long-term fit for the properties.

Martin said STRS Ohio is talking to a potential tenant that would take over the entire 27,000-square-foot former Pottery Barn space in the Grand Place building.

The pension fund is also in conversations with several restaurant groups about space in the Milton Mall building that recently housed Salut and Anthropologie. They're preparing to spend upwards of $1 million on that property to divide three spaces into five, Martin said.

"STRS is willing to invest a significant amount of money, and almost no one will do that right now," she said. "They want another 20-year restaurant like Salut, so we're really being fairly picky about who we're talking to and trying to bring things that are unique for Grand Avenue."

Taghioff sees the simultaneous movements as a sign that for Grand Avenue is ready for a new chapter.

"I think what makes a great street great is that it evolves and changes and responds to the moment," he said. "Grand is no different."