Why Downtown St. Paul Condo Owners Are Rooting for More Apartments Next Door

"We want it done well. We want it done now." Peter Donahue said that to the St. Paul City Council in June. He is president of the Airye Homeowners Condominium Association, which owns 121 homes at the top of the 21-story Galtier Tower in Lowertown. The project he wanted done now was 166 new rental apartments in the vacant office space below his association's homes.

That sounds backward. Condo owners tend to be wary of new rental supply on the same block. Donahue and the neighboring On The Park Condominium Association both urged the council to approve it anyway. Their reasoning is the most useful thing a downsizer can understand about downtown St. Paul condos right now. A downtown unit's value rests less on scarcity and more on headcount. The number of people living within a few blocks decides whether the grocery store, the coffee counter and the skyway stay open. Those things decide whether the condo is easy to live in and easy to sell.

What 121 Owners Were Actually Protecting

Galtier Plaza, also called Cray Plaza, is the multi-story space surrounded by the Galtier Towers next to Mears Park. It once held a movie theater, an international high school and Cray's supercomputing offices. A Bigos Management representative told the council it had "sat vacant for about 10 years now since Cray moved out."

For the condo owners upstairs, that vacancy was a cost they paid every day. "Galtier Plaza has the entire central area of the plaza vacant," Donahue said. "I think you can appreciate what we have invested in that tower, and we want to preserve it." The On The Park association wrote in support too. It asked for "more residents on the streets around Mears Park, more support for the local businesses and restaurants we rely on."

The council, sitting as the city's Housing and Redevelopment Authority, approved a $13 million tax increment financing district on a 7-0 vote. The plan calls for 29 studios, 82 one-bedrooms and 55 two-bedrooms, with monthly rents from $1,125 to $2,800. Before the vote, Bigos was targeting an opening in late summer or early fall 2027. We have not found any reporting that confirms construction has started.

Those owners made a plain calculation. A rental tenant downstairs does compete with a condo seller upstairs for the same kind of buyer. But an empty floor drags down every unit above it. More residents mean more foot traffic. More foot traffic keeps businesses open, and open businesses keep the address attractive.

The August Numbers Show Who Has Leverage

This is why the current downtown market looks the way it does. In August 2026, the Minneapolis Area REALTORS neighborhood data put downtown St. Paul in a very different position from the neighborhoods many downsizers would be selling from.

These figures cover every property type, and downtown's ten sales make a small sample. The downtown row is still close to a condo measure, though. A Star Tribune analysis this spring found that nearly all property listings in downtown St. Paul were condos or townhomes.

Picture a downsizer selling a house in Macalester-Groveland and buying downtown. They sell into a market with about a month of supply and buy into one with nearly ten. Downtown sellers in August got 92.9% of their original asking price on average, which leaves room to negotiate. Statewide, condo sales fell 4.3% from a year earlier in August, while single-family sales rose 1%. The two segments are moving in different directions, and a buy-sell move between them gets the strong side of each.

Owners at Galtier Tower and around Mears Park understand the other half of that picture. When supply is that deep, the main thing that lifts values is demand from people who want to live downtown. Their support for 166 apartments was a bet on demand.

The Monthly Fee Is the Price

The other reason downtown sticker prices look low is that a large share of the cost sits in the HOA dues. An April 2026 Star Tribune report described a one-bedroom at the Lowry with 13-foot ceilings and original terrazzo floors. After a $10,000 price cut, it was still listed for about $25,000 less than the owner paid in 2023. Its monthly HOA fee of about $700 covered most utilities, building maintenance and security. That comes to roughly $8,400 a year before any mortgage payment.

The same report covered a nearly 3,000-square-foot condo at River Park Lofts priced at $775,000, the same price the sellers paid in 2023. They offered to pay three months of the $2,000 monthly HOA fee as part of an acceptable offer. That concession was worth $6,000, and it went toward dues rather than the price. It shows where the negotiation was happening.

For context, the article put the Twin Cities median HOA fee in 2025 at $278 a month, about 13% of a typical house payment. It linked rising dues to insurance, safety requirements, labor and materials, aging buildings and harsh weather. Downtown buildings with doormen, heated garages and bundled utilities sit well above that median. Some of that cost replaces bills a homeowner already pays, like heat, snow removal and exterior upkeep. The share that doesn't replace an existing bill is the true premium.

Those spring figures are six months old and describe individual listings. They show how the costs are structured. They are not a current price sheet.

The Amenities Are Following the Headcount

The best evidence for the Galtier owners' bet arrived on September 24, when ALDI opened at 115 10th St. E, open 9 a.m. to 8 p.m. daily. Downtown had gone without a major grocery store since Lunds closed that space in March 2025. According to the city, ALDI regional vice president Matt Lilla named population density, along with infrastructure, parking and walkability, as key reasons for choosing the location.

Here is how residential growth and daily convenience are lining up downtown as of early October 2026:

1. Open now. ALDI at 10th Street. River Valley Coffee Co. on the first floor of the Lowry at 350 St. Peter St., a space that had been empty since 2020. Jenni's Cafe in Landmark Center, in a spot vacant since the pandemic. Galvan Foods' indoor market and tortilleria at 308 Prince St., open 7 a.m. to 3 p.m. Tuesday through Sunday.
2. New residents arriving. Stella St. Paul, a $68 million conversion of the former Ecolab University Center at 386 N. Wabasha St., is adding about 175 market-rate apartments, and leasing was underway as of August.
3. Approved but unbuilt. The 166 Galtier Plaza apartments, targeted for 2027.
4. Promised but pending. In June the city committed to reopening closed skyway segments at Alliance Bank Center, Central Station and the St. Paul Athletic Club. There was no firm date, and costs could reach $300,000 or more. The city's skyway page, last updated in August, still listed the Alliance Bank Center intersection as closed until further notice.

The city's downtown strategy sets a goal of 20,000 downtown residents. Each of the items above moves toward that goal. Each also helps explain why condo associations want more neighbors.

How This Changes the Way You Read a Listing

If a downtown condo's value depends on how many people live around it, then buying one is partly a bet on the next few years of that block. That shifts what belongs in your due diligence:

• What the dues replace. At the Lowry, the fee covered most utilities. Lining that up against what you pay today for heat, electricity and snow removal turns a scary-looking number into a comparison you can actually make.
• Where the building sits in the pipeline. A unit two blocks from a new conversion or a reopened skyway sits in a different position than one beside a stalled block.
• Where the concession goes. The River Park Lofts sellers covered dues instead of cutting the price. With 9.8 months of supply in August, asking for credits toward dues or closing costs is a normal request.
• How the association talks about its block. The Airye and On The Park associations went on the public record about their surroundings. An association that follows what's happening nearby is usually one that keeps a close eye on its own building.

A Few Questions Worth Settling Early

Is downtown St. Paul condo pricing a bargain or a warning sign? It depends on how you see the residential pipeline. August pricing reflects deep supply. The Stella's leasing, ALDI's opening and the approved Galtier conversion all point toward more residents. The skyway reopenings and the Galtier construction start are still unconfirmed.

Will new rental buildings compete with my condo when I sell? Some renters will choose an apartment over buying. The associations closest to Galtier Plaza decided that the vacancy was costing them more than any competition would.

Should I time a Macalester-Groveland or Highland sale before buying downtown? In August 2026 those neighborhoods had 1.1 and 2.1 months of supply. Downtown had 9.8. Selling first, or making an offer contingent on your sale, is more realistic downtown than in most of the city. Your own timeline and financing will decide which order fits.

If you're weighing a house in the neighborhoods against a downtown condo, Mitchell Culbreath can help you compare a specific building's dues, its block and the timing of your sale, and plan both sides of the move around them. Let's Connect.

This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.