A glitzy new apartment complex filling a long-standing hole on Washington Avenue in the Mill District is finally about to open to its first round of tenants.
Just eight months after breaking ground at the corner of Portland and Washington avenues, Mill District City Apartments will have models ready by the end of September, and tenants will be able to move in by the end of October, according to Jonathan Holtzman, CEO of Village Green, the Michigan-based company responsible for the $25 million, 175-unit project.
A previous development project planned for the same spot stalled during the real estate implosion of 2006–07, leaving the parcel in limbo for years.
Mill District represents Village Green’s third rental project Downtown, after the Eitel Building City Apartments and the Loring Park City Apartments. Aside from filling a long vacant hole in the Washington Avenue corridor, it will attract some 250 new residents with good jobs to the neighborhood, provide Downtown employers with a further incentive with which to attract recruits and, according to city officials, will contribute $350,000 annually in real estate taxes. Holtzman says it’s also created a few construction jobs in the process.
Observers on the neighborhood side, the city side and the real estate side are hailing it as a blanket win-win.
“If this building and the concept of it were publicly traded, I would be investing in stock,” joked Scott Parkin, a Downtown Realtor who is also vice president of the Northeast Minneapolis Business Association.
“It’s completing that neighborhood [the Mill District]. It’s filling in that final — we used to call it the sand volleyball court, you know? That big pit. To fill that in and finish that out, and then to give all these people who are desperate for a rental option a new option…It’s gonna be a winner,” he said.
Parkin, who describes the Mill District as “starved for rentals,” said he thought the new apartments will entice those considering settling Downtown but who may be not quite ready — or not financially prepared — to make a down payment. The desire to rent Downtown is there, Parkin said. The options to do so are not.
“The apartment business in Downtown Minneapolis today is full,” Holtzman said. “Occupancy is 95 percent or plus, without concessions. So it gives you a sense of what the demand is even in this economy.”
Pre-leasing began in June. Holtzman said that 125 people contacted him right away about possible renting, before leasing opened to the public. He declined to divulge how many units are currently spoken for, saying only that demand “has exceeded our goals.”
Holtzman attributes the demand to young professionals recruited out of college by local companies who want an urban experience.
The city has also sounded enthusiasm. After Holtzman struggled to secure financing in a frozen credit market, City Council Member Lisa Goodman (7th Ward) helped broker a deal to defer land sale proceeds. The city is deferring about $1.4 million for up to 24 months, and will receive a promissory note from Holtzman’s company. A council action was approved by a unanimous vote on Sept. 17.
“I am excited Village Green is going to fill the empty hole in our Historic Mills District,” Goodman said, adding that it is a good deal for the city.
“They placed a bet on Village Green,” said Holtzman. “And I think the city and U.S. Bank” — who ultimately provided construction financing — made a good bet.”