When the light-rail project along St. Paul’s University Avenue was first pitched, it was portrayed as a catalyst that would enhance and attract.

So how has it done?

Not too bad, when it comes to property values. Though in terms of tax revenue, growth is actually more sluggish along University than it is across St. Paul and the county as a whole. And many see the areas of University closest to the Minneapolis border reaping the most benefits.

The Pioneer Press studied Ramsey County data for all properties within roughly two blocks of University Avenue, from the Minneapolis border to the Capitol, between 2012 — a couple of years before the Green Line opened in 2014 — and 2017.

Over that time, property values rose from roughly $780 million to $1.064 billion — a 36.5 percent increase.

Compare that with St. Paul’s citywide 32 percent growth over the same time period. And countywide, value growth was only 28 percent.

A CATEGORICAL SHIFT

This is particularly interesting considering the high proportion of commercial-industrial property in the area. Industrial property typically increases in value at a much slower rate than residential property — though no small portion of that industrial property along University has been converted into apartments.

All those figures don’t account for “tax-exempt” properties — of which there are many along University Avenue. But that number appears to be shrinking.

In 2012, 30 percent of the University Avenue area’s property values could be attributed to “exempt” properties.

By 2017, that proportion had shrunk to 25 percent. Though as a caveat, exempt property values shrunk significantly citywide — by an even greater amount.

It should be noted that the time period of the data set did not include many of the more recent changes to properties around Allianz Field, the new soccer stadium, an area that has unarguably risen in value. But it’s also a tax-exempt area.

PLENTY OF APARTMENTS

The biggest value jump along the Green Line, by far, is in apartments.

The total value of all apartments along the Green Line skyrocketed 147 percent — from $125 million to $309 million — in that five-year period.

Citywide, the total value of all apartments grew at roughly half that rate.

And it’s not just the value, but the quantity.

The number of properties classified as apartments in the University Avenue district has grown from 99 to 117 in those five years.

There have been plenty of recent reports noting how the cost of home ownership is rising along the Green Line. So the newest data shouldn’t be any surprise.

David Arbit, director of research for the Minneapolis Area Association of Realtors, put together recent sales prices for the district within two blocks of the Green Line along University Avenue.

Though sales data can vary significantly month to month, in January the average sale price was $248,000 in the University Avenue district — significantly higher than the St. Paul average of $212,000.

But it’s all relative, of course.

“As your Uptown’s and Northeast’s values are rising, they (potential homebuyers) are feeling maybe it’s time to buy. And maybe they’re feeling that St. Paul has more affordable options for them,” Arbit said.

Still, others worry about the type of buyers along University.

“Are the buyers owner-occupiers, or are they all investors? If they’re investors, you will never have a vested neighborhood,” warned Kou Vang, principal of JB Vang Realty, which owns or represents many commercial properties along the avenue.

The trend is similar in commercial properties — at least on the avenue’s western side. But there’s some catching up to do.

At a recent meeting of the Midway Chamber of Commerce, the head of the Minneapolis Commercial Association of Realtors revealed his own data on the area around University Avenue.

The area’s office lease rates were still lower than the metrowide average — and hadn’t gone up significantly in over a decade.

“We’re all kind of looking over the fence right now,” said association president Matt Anfang, referring to developers and real estate agents outside St. Paul.

But broker Tiffany Brace, with Element Commercial Real Estate, told the Midway chamber that “looking” would be a serious understatement.

“We’re seeing a lot of players. A lot of people coming from out of state,” she said.

A NEW MAIN STREET

Yes, the Minneapolis market is much bigger — but hot neighborhoods like the North Loop and Northeast are saturated, littered with wait lists.

And when it came to an attractive collection of accessible amenities to lure businesses, people aren’t looking too closely at St. Paul’s downtown. “But we have that on University. We have a main street,” Brace told the Midway chamber.

In an interview, she added: “I can’t count the number of times that people have said (when they talk about where they want to move in St. Paul), ‘Yeah, I guess when I say ‘St. Paul,’ I really only mean Midway.’ It’s safely just a hair past Prospect Park … Not that long ago, people were uncomfortable going any farther than Surly (Brewery),” just over the line in Minneapolis.

Now, the artist lofts on University Avenue’s western edge are starting to go away.

“Eclectic spaces” with some offices, some “bootstrap” business startups — things typically found in Minneapolis’ Northeast — are becoming a renovated norm in the Midway.

Brokers like Brace also point to last month’s news that Kraus-Anderson Realty paid $31 million for property adjacent to Allianz Field as the surest signal of the area’s future — compared with, for example, news of a downtown St. Paul building being bought by Madison Equities.

“That’s huge. It’s them (Kraus-Anderson) saying, ‘Hey, we know there’s money here and we’re no fools.’ … It’s a really good indicator that people are doubling down, and getting in when they can,” Brace said.

THE EAST-WEST ‘DIVIDE’

Still, area real estate agents and commercial groups still see a big break on the boulevard — at Snelling Avenue in particular. Others point to Lexington Parkway as the true divide.

Either way, there is a growing sense that properties west of “the divide” appear to be flourishing. East, not so much — or at least not as fast.

Arbit, the researcher with the Minneapolis real estate agent group, split the area at Snelling when conducting a recent study into how residential properties were selling.

His area — which included a larger swath of single-family homes and condos all the way north to Pierce Butler Route, showed that the median price per square foot for properties west of Snelling to Minnesota 280 was $160, as of February 2019.

The median for those east to Dale Street was $148 per square foot — less than the St. Paul average of $150.

Those west of Snelling also were on the market for less time: a median of 13 days, compared with 18 for St. Paul. Those east stayed a median of 16 days on the market.

On the commercial side, there’s some anxiety about how locally owned “mom-and-pop shops” are doing.

Commercial real estate agent Vang looks east of the Snelling Avenue line — just past the stadium — and shakes his head.

“I think that the avenue is reflective of the old adage of the rich getting richer and the poor getting poorer,” said Vang. “The east end has never realized its full potential. I think that that trend just got magnified multiple fold, with the light rail and stadium.”

He points to notable vacancies in commercial buildings — including new ones — east of Snelling, and talks of traffic that used to come into the old Ho Mai building, the Hmong and Mai Villages, or frequent businesses above the Sunrise Market.

“Now you go in there, it’s like a ghost town,” Vang said.

“Once you go east of Snelling, you don’t see much. Housing, but it’s all ‘affordable.’ Yeah, all the apartments are full because it’s 40 percent (area median income), but that commercial space on the bottom? That’s never going to be full; it never will be. This is not New York. We don’t have that density.”

As for blame, Vang brings up an argument that was lost years ago: parking.

“If you’re not taking care of parking, no one’s going to come. That’s just reality. This is still Minnesota, people still want to drive. … A lot of the mom-and-pop stores are not going to survive, because they do need parking.”

But there are corners that defy Vang’s description — and developers who say those mom-and-pops are doing more than just surviving.

Take the busy intersection of Dale Street and University Avenue. Two of its four corners have been renovated — one with a library, another with that mix of apartments on top, commercial and retail on the bottom. Usually 100 percent leased, or one space shy.

Now, the same developer — the nonprofit, University Avenue-based Neighborhood Development Center — is preparing to build on the corner across the street, where the popular Big Daddy’s BBQ sits. Again, plans call for a mix of residential, retail and office space, including room for their own organization, which they hope to break ground on next year.

“It (the east side of University) draws people from all over the area, and the restaurants are celebrated in foodie blogs. I don’t think the east end has deteriorated by any means,” said Mike Temali, the center’s CEO. “It’s not new buildings popping up everywhere, but I don’t know if that was in anybody in this community’s vision for what should happen here.”

Temali acknowledged that some businesses had moved to the larger central Hmong markets off University Avenue, but added, “I don’t know that there are a large number.”

And value increases are a double-edged sword, Temali says. Gentrification is a sore topic anywhere, but especially in the city’s old Rondo neighborhood.

TAX REVENUE

Finally, there’s the question of taxes.

Surely, the Green Line caused tax revenues to soar, right?

Actually, no.

In fact, the blocks around the University Avenue Green Line saw just a 14.8 percent increase in tax revenues, not including any special assessments, compared to a 17.7 percent increase in St. Paul over the same five-year period.

Part of the reason, county officials believe, is all those new apartments.

The area used to have a lot of commercial and industrial land, which is taxed at a high rate. That zoning went away, to be replaced by — you guessed it — apartments, which are taxed at a much lower rate.

There were some changes at the Legislature that likely contributed to the slower tax revenue growth, as well. In particular, new legislation let commercial building owners exempt the first $100,000 in value from their state business taxes.

And since there were a lot of smaller — as opposed to seven-figure — commercial buildings along University, this may have disproportionately affected the Green Line district.

For their part, city and county officials maintain that development — and its fruits — take time. Real estate agents say it will creep east, eventually.

But community advocates such as local developer Temali say taxes shouldn’t be the measure of success, regardless.

“That’s fine if you’re a tax collector on some levels, but it’s clearly got a negative side,” Temali said. “What we all really value about this area is the ethnic and cultural mix (of businesses) … and I hope that continues for generations to come, and not get crowded out. If the city wants to drive up tax value, that will certainly accelerate the demise.”