Published in: Finance & Commerce
Author: Brian Johnson

June 13, 2023

After landing a key funding commitment from Hennepin County, Lupe Development Partners and Wall Cos. are pushing ahead with a long-planned $32 million project that will bring 90 affordable apartments to a former public works site.

Part of the Snelling Yards development, a joint venture with Ecumen, the new building will rise on a site adjacent to The Hillock, Ecumen’s fully leased affordable senior housing development. The development site is at East 45th Street and Hiawatha Avenue in Minneapolis. Frana Cos. is the contractor and Pope Design Group is the architect on the project.

A green common space and outdoor “tot lot” paved playground for kids will connect the two housing complexes, creating what the developers call an “intergenerational campus” of affordable housing for seniors and families.

Hennepin County recently awarded the project $900,000 in funding through its Affordable Housing Incentive Fund program, which funds the development of affordable housing units for “very low-income households.”

“We know there’s absence of affordable apartment communities with ample space for larger families and Snelling Yards is an excellent solution to that in the heart of the city,” John Wall, president of Wall Cos., said in a statement. “The investment from Hennepin County is an encouraging sign that allows this project to move forward. We’re ready to seize this moment and deliver on our vision to create a multigenerational community at Snelling Yards.”

The project site is a former city of Minneapolis Public Works storage area. The developers said they are “eager” to remove existing storage units on the site and break ground in 2024. The goal is to have the new units ready for occupancy in July 2025.

The project has been in the works for years.

Finance & Commerce first reported in 2015 that the city was seeking a housing developer for the 3.3-acre Snelling Yards site. In 2017, the city selected the Wall Cos., Lupe Development and Ecumen team as preferred developers.

One challenge was maintaining a project that would appeal to funding partners.

To that end, the developers included some units targeted to homeless veterans and others for households at 30% of area median income. Also added were family-friendly three- and four-bedroom dwellings.

“When we started this, the funders were funding these 50% and 60% [AMI] tax credit projects that everyone was doing,” said Jeff Ellerd of Wall Cos. “And those were typically studios, ones and some two-bedroom units.

“Since that time, their focus has changed and, for better or for worse, they have pushed developers to include more 30% units and units that are prioritized for people who have been homeless in the past year or are at threat of being homeless.

“We had to adapt to what the funders wanted.”

Meanwhile, the developers have been cobbling together a mix of funding sources. Among those is a $1 million award from the city of Minneapolis Affordable Housing Trust Fund. In May 2020, Hennepin County awarded $800,000 for the Snelling Yards senior housing component.

Other sources include 4% Low Income Housing Tax Credits, mortgage financing, and potential tax increment financing from the city of Minneapolis and Livable Communities Act funding from the Metropolitan Council.

“Met Council funds are typically awarded at the end of the year. If we are successful, project financing closing and start of construction would occur in 2024,” Ellerd said.