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Two high-profile Minneapolis developers are teaming up on a $25.65 million proposed apartment complex near Edina’s busiest retail centers, Southdale Mall and The Galleria.
The site in question is a 1.6-acre lot at 4040 W. 70th St., according to plans put forward by Aeon, a non-profit, and Ryan Cos. U.S. Inc. The proposal calls for 90 units spread over two buildings, three- and four-stories in height. The shorter of the two would front on Valley View Road.
The structures would be connected by a common area on the ground floor.
The mix of units would be tilted toward families and those of modest means. The majority of the apartments would be on the large side, with 33 three-bedroom and 34 two-bedroom units, with just 16 one-bedrooms and seven studios.
Ten percent of the units will rent for market rates, which range from $1,066 a month for a studio to $2,125 for a three-bedroom apartment in the area, according to a fiscal analysis of the project prepared for the city by Ehlers & Associates.
The other 90 percent would be targeted at renters with moderate or limited incomes, according to a letter by Blake Hopkins, Aeon’s vice president of property development. Ten are intended for renters making 30 percent of the area median income (AMI), 15 for those making 50 percent of AMI, and 56 for those making 60 percent of AMI.
In 2017, Minneapolis-St. Paul’s AMI stood at $90,400, according to the Metropolitan Council.
Right now, the site is improved with a 49-year-old, Class C office building owned by American Collectors Association International, a trade group for collection agencies. The property was valued at $2.76 million for taxes payable in 2018, according to Hennepin County records.
According to Hopkins’ memo, acquisition costs will amount to about $3 million. Ryan is working on securing a purchase agreement with American Collectors, Hopkins said on Wednesday.
The fate of the project hangs on the availability of public financing. There is $6.8 million gap in financing, primarily because of the high cost of acquiring the land and demolishing the building, according to Ehlers.
To make up the difference, Aeon and Ryan are asking for $4.1 million in tax increment financing, $1.2 million from the Edina Housing and Redevelopment Authority and $1 million from the Edina Housing Foundation. The developers also plan to apply to Minnesota Housing Finance Agency for low income housing tax credits and a deferred loan, and may defer a portion of the $2 million developer fee as well.
The project will go before the HRA for the first time on Thursday morning.
Aeon and Ryan hope to have financing for the project nailed down by April 1, 2019. Construction would then begin shortly after. If all goes according to plan, the complex would be leased out by August 2020.
