Donovan Joseph Roediger recalled the day he learned his landlord hadn’t renewed his lease at the Lowry Apartments in downtown St. Paul because the owner wanted to turn his apartment into an Airbnb short-term rental.

It was cold comfort that most of his neighbors found themselves in similar straits.

“He issued notices of non-renewal to all tenants on the ninth and 10th floors,” said Roediger, a neuroimaging researcher at the University of Minnesota.

The decision seemed to fly in the face of city rules being crafted at the time limiting large apartment buildings to just four short-term rentals, but property owner Jim Crockarell had an out. Within months, he licensed the floors as a hotel.

CITY DEFINES WHAT IS A HOTEL

It’s taken two years, but the St. Paul City Council on Aug. 7 voted to effectively close a loophole in its short-term rental ordinance.

For what appears to be the first time, the city council has defined what it means to be a hotel.

City Council member Rebecca Noecker, who represents downtown St. Paul, acknowledged that on paper, the change probably shouldn’t have taken two years of negotiations and inquiry to finalize.

Nevertheless, the amendment to the city’s zoning code is a shot across the bow for major downtown property owners such as Crockarell, who used state licensing rules to convert two floors of rental housing into short-term rentals despite a city ordinance barring such actions.

“This was about sparing what little affordable housing is left in downtown St. Paul from developers who want to squeeze more revenue out of their properties by converting apartments en masse to short-term rentals,” said Roediger.

Crockarell on Wednesday said he was unaware of the legal change and doesn’t see it as impacting him.

Beginning roughly two years ago, Noecker received word from Roediger, a tenant at the time of the Lowry Apartments at 345 Wabasha St., indicating that the building owner declined to renew several tenant leases.

Instead, Crockarell and his management firm, Madison Equities, converted at least eight apartments into short-term rentals and listed them on the Airbnb platform.

“I said, ‘They can’t do that,’ ” Noecker said.

AIRBNB LOOPHOLE

Around the same time, Noecker was involved in crafting new taxing and licensing rules around short-term rentals, which were approved by the council in October 2017.

Under those rules, owners of sizable apartment buildings were allowed to rent no more than four units out on short-term rental platforms. At one point, city officials found at least 15 listings for the Lowry on Airbnb.com.

But Crockarell had an out. In 2013, the state of Minnesota took over the licensing of pools, restaurants and hotels within St. Paul, over the city’s objections.

The city discovered that Crockarell had gone to the state and licensed the Lowry as a hotel — its historical use — allowing him to lease out units through the means of his choosing. He continues to list multiple apartments on Airbnb.

“Because the city no longer does hotel licensing, they had basically gotten around our short-term rental license ordinance,” Noecker said.

The Lowry was licensed as a hotel as of February 2018, but Roediger, who was still a tenant at the time, noted there was no hotel sign, front desk or phone number identifying it as such.

“A passing member of the public can’t even walk in and inquire about getting a room, as there’s no reception staff whatsoever,” he informed Noecker and a reporter by email.

CITY COUNCIL CRACKS DOWN

This month, the St. Paul City Council unanimously approved an amendment to the city zoning code tightening the rules, with just such a situation in mind. The changes drew little notice and no written objections.

Hotels are now defined, in short, as places with a staffed front desk, where guests can walk in and reserve a room that offers daily housekeeping.

The amendment states, in full, that a hotel is “a commercial establishment offering to the public daily, five or more individual sleeping room accommodations available for reservation on a walk-in basis, with a resident proprietor or on-site manager, an identifiable main entrance and lobby, a staffed desk or office for the registration of guests, staff to provide daily housekeeping services, and exterior signage identifying the establishment as a hotel.”

Does the Lowry Apartment building currently meet that definition?

Other than the lack of hotel signage, Crockarell said he’s added all of those flourishes, in part to accommodate corporate clients such as Ecolab visitors who fly in for weeks at a time.

“It does meet that definition,” Crockarell said Wednesday. “We do have daily housekeeping, we do have a concierge in the front. We have an on-site building manager. We have 24 units that we advertise as ‘extended stay’ units. We advertise through Airbnb and other platforms, so two floors of this building are functioning as a hotel under the city definition.”

Crockarell said that the building, which is also home to the Ramsey County Attorney’s office and the Gray Duck Tavern, continues to offer more than 100 unfurnished apartments. He expects that number to go down as the number of licensed hotel units as much as doubles in the near future. He wants to offer 40 or 50 hotel stays.

Even Noecker acknowledges that Crockarell is probably in the clear.

“Obviously, this closing of the loophole will prevent future buildings from becoming a hotel (through Airbnb), but the Lowry now has an actual hotel license,” she said.

Noecker said inquiries with the hotel licensing authority — the Minnesota Department of Health — and discussions with the Planning Commission and city staff over how to approach the licensing issue took months, raising questions about whether the state would respect the city’s definition of a hotel.

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Roediger said his intent was never to punish his former landlord.

“Whether or not the Lowry meets the new definition is probably a moot point. My understanding is that it will be grandfathered in and is under no risk of losing its hotel license,” Roediger said. “The goal of the ordinance was not to shut Crockarell’s operation down but to make it a little harder for him and other developers to exploit this loophole in the future.”