By: William Morris
Finance & Commerce | August 27, 2019
Developer Loren Brueggemann has both new and renewed affordable housing in the pipeline for northcentral St. Paul.
Brueggemann, a principal with Santa Rosa, California-based Phoenix Development, has worked on a number of Twin Cities affordable projects, including the Greenway Heights Family Housing in Minneapolis. His latest project, which goes before St. Paul’s Zoning Committee this Thursday, is a proposed 41-unit apartment building at 782 to 804 Rice St. The project, known as Rice Street Flats, will be built on a vacant site currently owned by the city Housing and Redevelopment Authority between Lyton Place and Sycamore Street, a block west of Lyton Park.
The project has been in the works for several years and at one point included plans for detached parking at 119 Lyton Place, across the street to the north. That plan was scrapped due to contamination at 119 Lyton, according to city documents. The current plan moves the entire project onto the Rice Street property with underground parking, Brueggemann said in an interview, although that site also has environmental concerns.
“There’s contamination issues on the main block where the building is,” he said, noting the company is working with the Minnesota Pollution Control Agency on a grant for the work. “There’s cleanup that will have to be done.”
Rice Street Flats was designed by Minneapolis-based BKV and will be built by Vadnais Heights-based Frerichs Construction. Phoenix is preparing to submit funding applications for the $13.6 million project to the U.S. Department of Housing and Urban Development, and hopes to close on the site and begin construction in November or December, Brueggemann said.
The finished building will be entirely affordable, with some units restricted to renters at 50% of the area median income and the rest at 60%. That meets a pressing need in the neighborhood, North End Neighborhood Organization Board Chair Rich Holst said in a letter supporting the project.
“[The rents are] commensurate with typical wages earned in this area and thus demonstrates how the Rice Street Flats Project fulfills this neighborhood’s need for housing,” Holst said.
Phoenix is also working on a deal to rehabilitate a number of affordable multifamily properties it already owns in St. Paul. Brueggemann said the deal, which could close as early as Wednesday, will transfer six buildings with 172 total units to a new entity that is receiving low-income housing tax credits through the city to pay for updates.
The properties in question are at 418 Maryland Ave., 76 W. Steven St., 846 Pierce Butler Route, 758 Victoria St., 1748 Case Ave. E. and 1741 Sims Ave., according to Phoenix. The company is planning nearly $2 million in updates to the properties while ensuring the remain affordable for the duration of their new financing, Brueggemann said.
“I think there’s no shortage of need,” he said, noting the company is working on other affordable housing projects in Denver and northern California. “Housing is a very finite commodity with a lot of demand, and especially in the last few years in the Twin Cities, there’s been a huge jump in rents, just like everywhere else.”