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528 N. Washington Ave., one of several inter-connected commercial buildings Dominium has under contract for a potential North Loop conversion project.
One of the last of the large industrial sites remaining in Minneapolis’ North Loop neighborhood is under contract, with plans to turn the cluster of interconnected commercial buildings into apartments.
Plymouth-based developer Dominium has signed a purchase agreement with the owners of the Duffey Paper property, a mélange of buildings dating to the early 20th century with addresses that run from 500 to 528 North Washington Avenue, said Claire VanderEyk, a development associate with the company.
Dominium’s tentative plan calls for converting the existing buildings into about 200 affordably priced apartments, with development costs running around $450,000 to $500,000 per unit, or $90 million to $100 million total, added VanderEyk.
Dominium is still doing due diligence on the property. The deal is expected to close sometime in the summer of 2019. She declined to disclose the contract purchase price.
VanderEyk said Dominium has been interested in the site for quite a while. For decades, the buildings were home to C.J. Duffey Paper Co., which was acquired by New York City-based Lindenmeyr Munroe in March of 2016. The Duffey family retained ownership of the underlying real estate, and Lindenmeyr Munroe moved Duffey’s North Loop operation to the Northern Stacks development in Fridley.
The vacant property aroused immediate interest in the local development community, and several proposals have been floated for the site, though ultimately they didn’t come together, VanderEyk said. The buildings are in excellent condition she said, and a development there would combine two of Dominium’s specialties: affordable housing and historic renovation.
Should the project move forward, it will be Dominium’s first in the North Loop neighborhood. Once a seedy collection of strip clubs, dive bars and crumbling warehouses, over the past 20 years the Victorian- and Edwardian- era industrial buildings have been transformed into luxury residences, creative office space, upscale retail and white tablecloth restaurants, making it one of the Minneapolis’ most chic but most expensive enclaves.
Dominium plans to structure the price of the units using a new schema called “income averaging,” VanderEyk said. Affordable housing developments in the Twin Cities often aim at a specific segment of the earning population, a whole building will be priced to those earning 60 percent of area median income [AMI]. Other projects dedicate a small slice of the units to affordable apartments at one AMI, and charge market rate or more for the rest.
Dominium’s Duffey development will price its units on a spectrum that will run from 30 percent to 80 percent of AMI, which stand at $94,300 for the Minneapolis-St.Paul region as a whole in 2018, according to the Metropolitan Council.
“It will be sort of like a mixed income property. It’s really new here and this will be one of the first developments to adopt it,” VanderEyk said.
As per current guidelines, rents for a one-bedroom unit would range from $531 to $1,416.
The plan debuted in mid-June said Tim Bildsoe, president of the North Loop Neighborhood Association Board of Directors, and was generally well-received, although some voiced concerns about whether the development would have an adequate amount of parking.
The board would also like to see ground-level retail there, a desire that stems somewhat from necessity. Though residents can get a $410 facial and find a luxury furrier within walking distance, the neighborhood only got its first grocery store five years ago and until recently lacked basic services nearby, such as a dental clinic or dry cleaner.
“We still need a lot of services in this area,” Bildsoe said on Tuesday.
At this point the plan does not include retail space, VanderEyk said, though she confirmed the neighborhood has voiced a desire for it. Dominium also plans to build a new, six- or seven-story parking structure on an adjacent parking lot, which should alleviate resident concerns over that issue.
The company is going to apply for historic preservation tax credits, a lengthy process that involves city, state and federal, governments, and their plans will be subject to review by the city’s Historic Preservation Commission in addition to the usual process before the Planning Commission.
The final design is expected to be compeleted early next year and, if all goes well, renovations would wrap up sometime before 2021.
John Duffey, former president of C.J. Duffey Paper Co., could not be reached for comment.
