Development update: Mill District apartments

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October 12, 2009 // UPDATED 8:02 am - October 12, 2009
By: Amanda Kushner
Amanda Kushner
City taking action on Mill District apartment project

A giant hole in the ground on Washington Avenue in the Mill District won’t be there that much longer.

The city is stepping in to help push forward Mill District City Apartments, which will front 2nd Street South, Portland Avenue South and Washington Avenue South.

During the last two weeks of October there will be a groundbreaking for the development, said city Project Coordinator Carrie Flack.

Holtzman Interests, an affiliate of Village Green Companies, is constructing a four to five story building with about 175 rental units and 175 below grade parking spaces. There will also be a 3,500-square-foot commercial space, with a small grocery store.

The target for the groundbreaking was last fall, but when the project tried to close the economy changed and was unable to close due to market conditions, Flack said. The project closed on Oct. 8, said City Council Member Lisa Goodman (7th Ward).

The developer, Jonathan Holtzman, had a hard time securing construction financing, and one of the ways to close the gap was to not have to pay land sale proceeds up front, said.

The city is deferring about $1.4 million for up to 24 months, and the city will receive a promissory note from Holtzman Interests. Brighton Development Corp. is also deferring the land sale payment, since this development has two parcels, Flack said.

A council action was approved by a unanimous vote on Sept. 17, Goodman said.

“The reason I readily agreed to that proposal is because he’s paying above market rate interests on the land sale proceeds for the two years,” Goodman said.

Goodman said government should avoid capital substitution, and should not step in when the private sector would to make a project happen.

“In this case the private sector would not step in, which is why we had to, and that is the role of government to step in when there is market failure,” she said.

The project will be complete in about 18 months, Flack said.

Goodman said the $45 million project is a good deal for the city.

“It achieves three goals: it’s getting the project going, putting people to work and we make a little money in addition to that,” she said.

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Minnesota Orchestra picks contractor for expansion project


The Minnesota Orchestral Association picked Mortenson Construction to be the general contractor of the approximately $40 million expansion and renovation to the Minnesota Orchestra, according to a release from the orchestra.

First Mortenson will work on pre-construction design services, and then Mortenson will serve as the general contractor, the release said.

The project will include a renovation of the public lobby space, a refreshed auditorium, updated backstage facilities and improvements to the exterior to better connect to Downtown.

In June the association chose Kuwabra Payne McKenna, an architectural firm, to design the project. Additional Minneapolis firms appointed to the project are Meyer, Borgman and Johnson, the structural engineering consultant, and Dunham, the mechancial, electrical and plumbing engineering consultant, the release said.

Mortenson was established in Minneapolis in 1954. Local projects Mortenson has worked on include the MacPhail Center for Music and the Walker Art Center.

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Housing authority gets funding for green housing

The Minneapolis Public Housing Authority will receive $31.8 million from the American Recovery and Reinvestment Act for three environmentally friendly housing initiatives, according to a release from the city. The money will be used for a Senior Center in Heritage Park in North Minneapolis, a green senior housing development and for energy improvements to 733 public housing authority properties, the release said.

The Senior Center will be built in collaboration among the housing authority, Northpoint Health and Wellness Center, Minneapolis YWCA, Augustana Services, Hennepin County and the city, the release said. The center will be funded with $10.5 million in recovery act funds and then an additional $3.8 million from New Market Tax Credits. The center will provide medical services, adult daycare, social and recreational services to elderly residents, the release said.

The Green Senior Housing Development will be built near the center.

Amanda Kushner can be reached at akushner@mnpubs.com.