Market-rate rentals receive TIF approval in Seward

By Brian Johnson, Finance and Commerce | October 30. 2019

A development team led by Seward Redesign got a key city approval Wednesday for a project that will bring Minneapolis’ Seward Neighborhood its first new market-rate housing since the mid-1980s.

The Minneapolis City Council’s Housing & Development Committee authorized $4.3 million in tax increment financing to support the 128-unit, market-rate Bessemer at Seward project and a 32-unit affordable housing phase on a former industrial site in the neighborhood.

The long-anticipated Bessemer at Seward project will rise on a former industrial site at 2200 Snelling Ave. S., and the affordable units, called Wagaag Commons, will be built on an adjacent property at 1912 E. 22nd St.

In a staff report, city officials said the affordable units are for households at or below 60% area median income, and the market-rate units are likely to be in the 80% to 100% AMI range.

The total estimated development cost is $42.58 million, which breaks down to $29.3 million for the market-rate apartments and $13.278 million for the affordable building, the staff report noted.

Emily Carr, a senior project coordinator with the city, said the committee’s actions “represent some of the final stages of transforming” the blighted and contaminated site into a “mixed-income and transit oriented development.”

Construction of the market-rate building could begin early next year, said Brian Miller, executive director of the nonprofit Seward Redesign. The affordable units could start later in 2020 or 2021.

“This was a blighted industrial site in the area of a light rail station,” Miller said in an interview. “The neighborhood and city are interested in seeing the site redeveloped at a higher density.”

In the staff report, the city said it has been 35 years since a rental project available to “residents without income limits” has been built in the area. But the larger development site has seen a good chunk of new affordable residences since 2014.

Bessemer at Seward is the third phase of a redevelopment of the 4-acre Bystrom Brothers industrial site, which is two blocks south of the Franklin Avenue light rail station. In the first two phases, the site was developed with 100 units of affordable housing.

Redevelopment also includes the Gateway Commons, a rehabilitation of two existing buildings for commercial use and demolition of a third building to make way for an open plaza, the staff report noted.

Seward Redesign and its development partners, Shafer Richardson and Noor Cos., are working with design firm LHB and general contractor Greiner Construction on the latest redevelopment plans.

The project requires demolition and extensive environmental remediation, which means crews will have to excavate about four to five feet of contaminated soil and haul it away for proper disposal, Miller said.

In July, the Minnesota Department of Employment and Economic Development announced a $328,488 grant to the city of Minneapolis to clean up metal machining debris at the project site.

Redevelopment of the former Bystrom property started in 2014 with the Touchstone Rising Cedars, a building with 40 units of permanent supportive housing for people with mental illness. Project for Pride in Living teamed with Seward Redesign on the project.

In the second phase, Seward Redesign worked with CommonBond Communities on the Cooperage, which offers affordable one-bedroom units for seniors. All 60 units are affordable to households at or below 10% AMI, the city said.

Bessemer at Seward has been in the works for years. In May 2016, the Minneapolis Planning Commission approved a site plan and conditional use permit for the development, which called for 121 units at the time.

Miller said he has “diligently” worked on the project for 10 years.

“The biggest challenge with this property is that you can’t command high enough rents in this this area to pay for the cost of development, which is why TIF was needed,” he said after Wednesday’s meeting. “This project would not happen without TIF.”

Next steps include a trip before the City Council’s Ways and Means Committee on Monday, followed soon thereafter by full City Council review, Miller said.

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