Downtown Revitalization in St. Paul, Minnesota: Properties Drive Either Recovery or Decline

Written by:

Rudi Davis

Date:

15 Apr 2026

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St. Paul’s downtown recovery strategy highlights a core reality of urban real estate. In distressed city centers, properties are never neutral. They either help drive revitalization or deepen decline, leaving little room for gradual stabilization.

Traditional thinking about downtown turnarounds assumes that slow, incremental improvements and patient investment will eventually steady struggling urban cores. However, Dave Higgins, President of the Paul Downtown Development Corporation, argues that this approach misses how key properties influence their surroundings. In distressed downtowns, he says, each major asset acts as a catalyst. It generates either positive or negative momentum and never simply sits idle.

“There’s no middle ground, there’s no neutral,” Higgins says. “It’s either negative momentum or positive momentum. A catalyst is either hurting things or it’s helping things.”

This view challenges the idea that cities can simply wait out downturns. According to Higgins, boarded-up or neglected buildings do not just represent missed opportunities. They actively erode investor confidence, discourage new capital, and accelerate decline. In this environment, waiting for conditions to improve can cause problems to compound.

Post-COVID Downtown Momentum

St. Paul’s recent experience shows why momentum matters more than gradual improvement. After the pandemic emptied offices and disrupted foot traffic, the city faced a new crisis in early 2024 when a major downtown landowner died. His widow put the entire portfolio, which encompassed a large share of St. Paul’s commercial space, on the market at once. This sudden flood of listings overwhelmed local investors and created uncertainty about property values.

Three of the most prominent buildings in the portfolio had already been boarded up and condemned by the city. Higgins explains that these were not just dormant assets. Their visible decline signaled to the market that downtown was in trouble. The negative momentum from these properties discouraged other investors from stepping in.

“People needed to see some action at a time when the conventional for-profit, private sector community wasn’t yet able to step in,” Higgins says.

To change this, the St. Paul Downtown Development Corporation acquired control of five major downtown properties in 2025: three office buildings, a commercial retail building, and a parking garage with nearly 1,000 stalls. The goal was not only to repair individual properties but also to change the overall direction of downtown’s real estate market.

Forcing the Market Bottom

Conventional real estate strategy in distressed markets is to wait until prices clearly reach their lowest point before investing. Higgins describes a different approach: using concentrated acquisitions to push the market toward a bottom more quickly, rather than waiting for it to emerge on its own.

“The scale of this particular portfolio was significant enough that we could actually force the bottom, or at least accelerate it in a way that could get people off the bench and start participating,” Higgins says.

In markets with negative momentum, he argues that waiting for pricing clarity can prolong the downturn. By quickly acquiring and stabilizing several catalyst properties, the organization sent a clear signal that conditions were changing and encouraged private investors to re-engage.

This approach is already yielding results. Higgins reports that private developers and investors have begun evaluating deals and considering new projects in downtown St. Paul, using the organization’s activity as evidence that the market is turning. The question of where the bottom is forming has given way to active site selection and deal-making.

Implications for Developers

The momentum framework has practical consequences for how developers and investors approach distressed downtowns. If key properties consistently push the market in one direction or another, then timing and scale of intervention matter more than waiting for traditional signs of recovery. Delaying action in search of perfect price clarity may mean missing the chance to influence recovery.

Higgins points out that developers are inherently motivated to build even in difficult conditions. He recalls the 1980s, when development continued despite interest rates reaching double digits, as evidence that the industry adapts rather than halts entirely.

“Back to the word momentum. Developers develop, and if you are not developing, you are trying to figure something else out,” Higgins says.

For cities facing negative momentum, this means first movers who are willing to accept lower short-term returns can have an outsized impact on whether a downtown stabilizes or continues to decline. The binary nature of catalyst properties means that decisive, large-scale intervention can shift market direction, but only if actors move before traditional indicators signal safety.

Beyond Gradualism

St. Paul’s experience suggests that gradual stabilization is rarely how downtowns recover from crisis. Properties are continuously pushing the market in one direction or another, and organizations that understand this dynamic can use it to drive recovery rather than wait for it.

The lesson for other cities is clear. In distressed downtowns, waiting for the market to heal on its own risks deeper decline. Targeted action focused on the most influential properties can accelerate recovery and restore confidence more quickly than patient capital alone.