By Clare Kennedy - Finance & Commerce
A joint venture between Lupe Development Partners, Ecumen and The Wall Cos. is in the process of securing the rights to redevelop Snelling Yards, a site near the Blue Line’s 46th Street Station in Minneapolis.
The $43.3 million project, at 3601 E. 44th St., calls for two buildings — one with 100 workforce apartments and another with 103 senior units, a plan similar to another project the team completed last year. The Snelling Yards land is on the western half of a block bounded by 44th and 45th streets and Snelling and Hiawatha avenues.
A City Council committee on Tuesday recommended giving the joint venture exclusive redevelopment rights to the site for the next 24 months. The full City Council will consider the measure on Aug. 4.
Once the project is complete, the joint venture promises to lease the one- and two-bedroom apartments at rents affordable to residents making 50 to 60 percent of the area median income, which was $85,800 in 2016, said Tiffany Glasper, a senior project coordinator in residential finance with the city of Minneapolis. That works out to rents ranging from $800 to $1,100 a month.
Steve Minn, a Lupe vice president and principal, described the Snelling Yards project as a sort of reprise of an earlier collaboration by the same companies — the Mill City Quarter/Abiitan Mill City development on the 300 to 400 block of South Second Street in downtown Minneapolis. That development, which opened in 2016, included two adjacent buildings for workforce housing and senior units on former city-owned land.
“It took us eight years to get [the Mill City] deal done, but since then it’s been so successful that we started looking at other sites where we could replicate it,” Minn said in an interview Tuesday.
There was just one problem: The group would need a spot with three acres or more to make such a development work and parcels that generous are few and far between in the city, Minn said.
Their luck changed in April 2016 when the city issued a request for proposals to gin up interest in redeveloping the site on East 44th Street, which it currently uses to store signs and garbage carts, Glasper said. Proposals were due by July 2016.
The city received two responses: one from Minn’s group and another from Plymouth-based Dominium.
The city initially favored Dominium’s pitch, though the two proposals were quite similar. Dominium also proposed workforce and senior units in two separate buildings.
Glasper said the city preferred Dominium’s design, but the company bowed out before the city could award it the rights to the site. Dominium Vice President Owen Metz said the company was looking for the right financing mix, which would require soft funds, seller financing and tax increment financing.
“After meeting with City staff it was determined that it was unlikely the combination of funds above would be available for the re-development so we stepped away,” Metz said in an email.
Thus the award will go to Minn and his partners. The city is still dissatisfied with the design.
“We were not enamored of the original site plan,” Glasper said. “It can be much more aesthetically pleasing and a lot more can be done to enhance the pedestrian experience on the 45th Street side.”
The joint venture is in the process of changing its plans to conform to the city’s wishes, Minn said.
Another issue still pending is the sale price. The city asked for $3.06 million in its RFP, and Minn’s team is offering $2 million for the site. Glasper said that part can wait.
“It’s too early to get down to brass tacks about it. We’ll get to that six months from now, when we see how well [the project] is being received by other funders,” she said.
Minn said the group will spend much of the next two years securing all the tax credits, grants and subsidies it will need to finance the project. Once the financing is nailed down, they can begin work. Minn said the project will take about 12 months to complete.
St. Paul-based Pope Architects is doing the design work. The general contractor is Frana Cos. of Hopkins.
Lupe and Wall Cos. are based in Minneapolis. Ecumen is a senior care and housing provider based in Shoreview.