A 75-unit affordable apartment complex planned as part of the Hawthorne EcoVillage development in north Minneapolis is closing in on an $800,000 city subsidy that will effectively complete financing for the multimillion-dollar project.
City staffers last week got a go-ahead from the Minneapolis City Council to continue their analysis of whether the $17.6 million Hawthorne EcoVillage Apartments would qualify for tax increment financing. The developer, nonprofit Project for Pride in Living, remains cautiously optimistic about approval.
Submitted rendering: Urban Works Architecture
A project timeline outlined by city staff predicts a TIF plan could be up for final approval in March, in time for PPL to officially close on the land in May and start construction soon after.
Plans for the project span five parcels near the intersection of Lowry Avenue North and Lyndale Avenue North in the Hawthorne neighborhood, one of the poorest pockets of the city. The effort builds on PPL’s existing sustainable and affordable development in the EcoVillage area – mostly single-family homes.
The area hasn’t seen high-density housing development since a 2008 roadway reconstruction, according to the city. The Lowry Avenue revamp was designed in part to catalyze redevelopment nearby, a theme in the city’s bigger vision for greater economic stability on the North Side.
Built with sustainability in mind, the EcoVillage apartment project will set a model for design and quality in other multifamily complexes expected to follow it into the neighborhood, planners said in city filings.
“This project will also help catalyze additional housing development in this area of north Minneapolis and will activate this intersection,” Tiffany Glasper, the city’s senior project coordinator for housing, wrote in a report to the City Council.
Aside from the prospective TIF package, the city contributed $1.88 million from its affordable housing trust fund plus $2.08 million in housing revenue bonds. The project is also in line for low-income housing tax credits worth $6.7 million.
Meanwhile, Hennepin County has so far provided nearly $1 million through several of its funding pools, according to city documents.
The Minnesota Housing Finance Agency backed the project with $3.13 million in housing bonds, while the Metropolitan Council ponied up $1 million. Other funding includes $60,000 from the Hawthorne Neighborhood and a contribution from a Home Depot Foundation grant.
A need for TIF rose out of a city policy that steered PPL to less-lucrative tax credits. The developer had planned to dip into more competitive, higher-value credits, but the city favors those for denser projects in areas with less concentrated poverty.
The switch left a funding gap, but the city offered up TIF as a solution. The framework, a go-to incentive for cities, allows developers to use a portion of tax revenue generated by a project to cover certain development costs as long as the project presents significant upside for the community.
The new EcoVillage housing – a mix of one-, two- and three-bedroom units, plus two townhomes – will cater to people earning 60 percent of the area median income. A family of four earning between $40,000 and $45,000 per year would qualify, and PPL is targeting the area’s workforce.
Most of the single-family homes developed as part of the EcoVillage cater to those earning more, about 80 percent of the area median income. Paul Williams, who heads PPL, said the latest project will be a market-builder.
“These are really working folks – certainly still lower-income, but this is real workforce housing and that’s important in a neighborhood that has fairly lower incomes,” he said. “Part of the strategy for the neighborhood is to try and build a stronger marketplace on this edge of north Minneapolis.”
In keeping with the rest of the EcoVillage initiative, the apartment complex will have green features including water and energy efficiencies. The project could incorporate a geothermal heat pump and solar-ready infrastructure, according to city documents, plus a community garden and green space.
Though it’s taken years to round out, the funding structure – including TIF – follows a formula that roughly lines up with other affordable housing projects spearheaded by PPL, said Chris Wilson, the nonprofit’s director of real estate development.
“I don’t think we did anything wildly novel,” he said. “It’s a fairly standard approach.”
To date, Minneapolis has invested $4.8 million to build 90 units of new housing through the broader EcoVillage initiative, according to PPL. That does not include the TIF package under review or staff time dedicated to the projects.
The city’s contributions drove another $20.5 million in funds from other public, private and philanthropic sources, PPL figures show.
St. Louis Park-based Watson-Forsberg Co. will build the latest project, designed by Minneapolis-based Urban Works Architecture.
PPL seeking contractor for next Minneapolis EcoVillage phase
Developers chase Metropolitan Council money
Share this:PrintFacebook159LinkedInTwitterGoogle +1Download