Affordable housing developer ventures into North Loop
Dominium‘s plan to redevelop a former North Loop paper warehouse will preserve three 102-year-old buildings and bring more affordable housing to the downtown Minneapolis neighborhood.
The North Loop Neighborhood Association’s only quibble is the lack of first-floor retail in the estimated $110 million redevelopment of the former home of the C.J. Duffey Paper Co., at 508, 520 and 528 Washington Ave. N. Residents have pushed for more first-floor retail in projects proposed along that avenue as well as historic preservation and affordable housing.
Still, two out of three goals isn’t bad, said Tim Bildsoe, president of the North Loop Neighborhood Association. Plymouth-based Dominium shared a concept plan for the 1.3-acre property with the association at a recent meeting.
“The affordable piece is fantastic,” Bildsoe said in an interview. “But I think we would like to have retail on the first floor.”
Dominium plans to build as many as 210 affordable apartments in the existing buildings and in one new seven-story building that would rise on a parking lot next to them, said Eric Omdahl, a Dominium development associate. Construction is planned to start in summer 2019. The building would open about 18 months later.
The three existing buildings – which are at the northeast corner of Sixth Avenue North and Washington Avenue North — have a total of 201,000 square feet of space, according to CoStar. The tallest of the structures on the property is six stories.
Dominium has built several Minneapolis apartment projects, but it is new to the North Loop. The affordable housing developer completed its 78-unit Millworks Lofts apartment renovation at 4041 Hiawatha Ave. S. in Minneapolis last fall. One of Dominium’s best-known Minneapolis projects is the historic renovation of the Pillsbury A-Mill into 251 affordable lofts for artists. That project, finished in 2015, is at 315 SE Main St. in the St. Anthony Main neighborhood.
The Duffey buildings have largely been empty since 2016, when New York-based Central National Gottesman Inc. purchased the family-owned C.J. Duffey, which supplied paper to the commercial printing industry. John Duffey, the former owner of the paper company, marketed the property to a small pool of buyers including Dominium, Omdahl said.
Dominium almost missed out on acquiring the property, he said. Two other developers submitted bids that were accepted ahead of Dominium’s, and one of those signed a purchase agreement. Dominium got its shot at the property six months ago after that agreement fell through. The developer was ready for the opportunity.
“We’ve been looking at this for three years, give or take,” Omdahl said.
Dominium’s plan hinges on obtaining state and federal historic preservation tax credits, city of Minneapolis tax credits and a bond allocation from Hennepin County, Omdahl said. The exteriors of the existing buildings will be restored to resemble how they looked before 1920, when the Minneapolis Iron Store occupied the property. That work will include putting larger windows into openings that have been filled with brick and glass block.
If all goes as planned, the property will be considered affordable to those earning an average of 60 percent of the area median income, which is $94,300 for a family of four and $63,300 for a single person, according to the Metropolitan Council. The lowest-priced apartments will be considered affordable to those earning 30 percent of the area median income.
A studio would rent in the $500 range at this income level, Omdahl said. The highest rents will be calculated for those earning 80 percent of the area median income, meaning that the most expensive two-bedroom apartment will rent for $1,700 per month.
The unit breakdown will be about 90 one-bedroom apartments, 90 two-bedroom units, eight three-bedroom units, and the remainder made up of studios. Seventy-seven apartments will be in the new building, while 135 to 140 will be in the historic structures. Dominium has not yet determined how many units will be assigned to particular income limits.
Amenities will likely include a rooftop space for tenants on the 528 Washington building, a fitness room and bike storage. Parking will include 140 stalls beneath all four buildings in the complex and in a surface lot. Dominium is evaluating what it will take to dig under the existing buildings to create that parking.
Meanwhile, the amount of parking for the project is a concern for the neighborhood association. The city of Minneapolis is set to double parking rates along Washington Avenue North and on other nearby streets, which could make living at the Dominium apartments less affordable, Bildsoe said.
“There’s just so much more the neighborhood can hold,” he said.
Retail space is something Dominium is “not considering that at this point in time,” Omdahl said.
“It is difficult to combine this component to a historic project being converted to housing,” he said in an email. “Parking for retail users is also a challenge, given the limited parking in the area.”
The downtown Minneapolis apartment vacancy rate – which includes the North Loop – is 2.5 percent, according to the most recent Apartment Trends report from Marquette Advisors. The average downtown rent has grown 6.1 percent in the past year to $1,727 per month.
According to a city of Minneapolis count, 2,070 apartment units were under construction in downtown as of April.