Study reveals uncertain future for
historic South St. Paul library building

Study reveals uncertain future for historic South St. Paul library building
By Jake Spitzack | Staff Writer | July 2025

The results of a recent 9-month study show that the former city library building at 106 3rd Ave. N. will likely not start its new chapter anytime soon. The $150,000 adaptive reuse feasibility study revealed a significant funding gap between the estimated redevelopment costs and the building’s market value as well as an uncertain market for prospective developers. The study was funded by a grant from the Minnesota Department of Employment and Economic Development and conducted by the consulting firm New History. While the study didn’t make any concrete recommendations for the building’s best use, it did present cost estimates and possible steps the city can take to encourage redevelopment.

The 11,840-square-foot building, which dates to 1927 and received an addition in 1964, needs a minimum of $2.3 million in restoration work to be move-in ready. Big ticket items include boiler and roof replacement, mechanical system upgrades, significant exterior brick restoration and accessibility improvements. Likewise, the cost to restore the building and prepare its interior layout for a single tenant is an estimated $4.3 million. That number rises to $5.3 million to support multiple tenants in a mixed-use layout. Even if the City could secure grants and take advantage of several federal and state tax incentive programs for redevelopment, there would still be a funding gap of $390,000 to $1.1 million, depending on interior changes.

Staff from New History said it’s common for projects like this to have a funding gap and that the city must determine if keeping the culturally relevant and historic building is worth the investment. City staff have voiced a strong desire to sell the building to a private developer that is proposing a project in line with city preferences. However, selling the building to the highest bidder without any restrictions is still an option. Currently, the city is paying about $31,000 annually to maintain the building, and costs could soar if mechanical systems fail.

According to the study, one of the most effective ways to close the funding gap is to increase the property’s market value by proving they have a tenant that will pay rent after redevelopment work is complete. But despite ongoing discussions with a handful of interested parties, nobody has stepped forward. Additionally, it was found that a developer’s return
on investment in the current market may only be around 8% and therefore the incentive may not be high enough to get many players off the bench.

Community feedback about the future of the building was garnered through several surveys and in-person events. The highest desires were for a multiuse building, event space, arts and cultural building, educational space or connection to Lawshe Museum. Options people asked to be removed from consideration were a dispensary or liquor store, haunted house or escape room, apartments or condos, and demolition.

Next steps recommended to the city council include removing and abating hazardous materials in the building, such as asbestos and lead-based paint, seeking tenants and a variety of grant funding, and applying to have the building added to the National Register of Historic Places so a developer can more easily take advantage of associated tax credits. Further study could be done exploring redevelopment options that would use adjacent sites and perhaps increase the amount of parking available at the building. Ultimately, discussions regarding the report and the building’s future are expected to continue at workshops this summer. For more information, visit southstpaul.org and search “library reuse study.”

After more than a century, the old American Legion library saw its final check-out prior to the grand opening of the newly created Kaposia Library in spring 2024.

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