05-22-1997 - Laserfiche WebLink

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B. Discussion of Proposals for City Owned Property on Highway 10 located in Section 9 of the Highway 10 Redevelopment Plan • Bennett explained that MSP Real Estate, the developers of the Silver Lake Pointe Senior Apartments, are interested in the rehabilitation of Red Oak Apartments and the construction on 26 new townhomes at the corner of Eastwood and Highway 10. The City EDA owns approximately .6 acres located on the corner of Highway 10 and Eastwood. All of the units are proposed as affordable housing. MSP is applying for TIF assistance, MHFA Tax Credits, Ramsey County Home Funds and Minneapolis Public Housing Assistance through the Holman Decree. Bennett asked the EDC to review how the project impacts the City's goal for commercial development in the area and a desire for no new rental housing. Chairman Nelson noted concerns with additional rental housing in Mounds View. He would like to see owner occupied units along with the rehabilitation of Red Oak. Jeff Huggett explained that they looked at the financial feasibility of owner occupied units in the area and that they could sell for an estimated $85,000 per unit but that with the huge financial burden of the rehab and the loss of holman funds and tax credits on the for sale units that they would need an estimated $30,000 per unit subsidy for the project. Nelson noted that the rehab is very needed as those apartments have been deteriorating for many years. He supports the rehab but stressed strong management of the units. If the City assists in the financing he would like to see City approval for management changes written into the development assistance agreement. Commissioner Carlson noted that the SRF study recommended that the best use for the property was housing rather than commercial development due to the access. She understands that this would not be a great location to develop for-sale units. Carlson • noted that this plan has merit but that there needs to be fine tuning. In addition, Carlson felt that the financing structure needs to be reviewed more closely. She felt that there was too much subsidy and not enough equity in the project and that the developer fee was too high. Therefore she could recommend that the use is appropriate but the financing needs work. Commissioner Goff would like to explore other commercial options and wondered if staff had more information regarding the commercial interest. Bennett noted that she spoke to the owner of Mounds View Animal Hospital. They are interested in the site but access off of Highway 10 is critical. They are also looking at building on the South side of 10 next to TJB Homes. Bennett contacted the owner of a funeral home in Minneapolis who had an interest in the property but has not heard back from them. Both potential commercial users were only interested in the City property. Commissioner Sjoberg asked MSP why they were interested in this site. Jeff Huggett explained that they were contacted by SRF Consulting since they are the owner of Silver Lake Pointe Apts. In evaluating the purposes of the study they felt that since they have expertise in improving distressed properties and they already own property in the area that this would be a good project to pursue. They have an interest in improving Mounds View to keep their existing investment healthy. This is a complicated financing deal with a lot of risk but they have the expertise to make it work and be successful. They have a waiting list at Silver Lake Pointe Apts. and believe they can capture part of that market with the rehab and the construction of the new units.