MINNEAPOLIS—A diverse group of players has come together to finance Five 15 on the Park, a $52 million, 259-unit apartment building in Minneapolis with a big affordable component. St. Paul, MN-based mortgage banker Oak Grove Capital, LLC arranged a $33 million FHA loan, which was sold to the AFL-CIO Housing Investment Trust, a frequent partner of Oak Grove.
“They also bought the short-term tax exempt bonds that we needed,” Ken Dayton, managing director of Oak Grove, tells GlobeSt.com. “You very seldom have an investor that will buy both the taxable mortgage and the tax-exempt bonds.”
The six-story project, at the corner of 6th St. and 15th Avenue S. in the Cedar-Riverside neighborhood near downtown, will generate needed affordable housing and about 260 union construction jobs, AFL-CIO officials say.
But construction costs have gone up about 20% to 25% in the last 24 month, Dayton adds, and this, among other factors, has made it more difficult to build affordable housing here. “But this is a development with many layers of funding.” The county and city both kicked in funds, including about $5 million in TIF money, and helped push the project over the finishing line.
Fine Associates will develop the property, which will have 132 affordable units and 127 market rate units. Plans for the ground floor commercial space include a neighborhood community center, child day care center, and healthcare facility. These features, combined with the project’s location near mass transit options, make the new development consistent with the Minneapolis Plan for Sustainable Growth, a guide for land development decisions approved by the city council in 2009. Fine has just broken ground and plans to deliver the building in about 16 months.