June 29, 2006, Finance & Commerce Magazine
By Burl Gilyard
Minneapolis-based Central Community Housing Trust is continuing to expand its affordable housing programs to the suburbs, closing at the end of May on the 120-unit Har Mar Apartments in Roseville.
The project, CCHT’s first effort in Roseville, will involve upgrading the property and adding a new residential building.
“We’re excited about working in Roseville, a second suburb that we’re venturing into. It’s a little different than Chaska in that it’s not a new development from scratch,” said Gina Ciganik, vice president of housing development for CCHT.
In Chaska, CCHT is developing the 115-unit Clover Field Marketplace.
“We had talked to the city [of Roseville] a little over a year and said if they had a site that might need some attention, we would love to be able to do something,” Ciganik said. “They had identified this apartment building as one that was struggling. It was about half vacant.”
The apartment complex, at 2225-2265 Snelling Ave. N., was built in 1968.
Historically, some suburbs have been wary of affordable housing. But Ciganik said the apartment complex is close to the Rosedale Center shopping mall and surrounding retail stores and that many of those employees and their families need affordable housing.
“They do want to see workforce housing in their community because they have lots and lots of retail jobs in that area and need places for their workers to live,” Ciganik said. “We did really want to concentrate on having some workforce housing.”
“It’s a fabulous location — there’s a lot of transportation,” Ciganik said. “Keeping housing available for their workforce is critical.”
Ciganik estimated the cost of rehabbing the existing building at $12.5 million and the cost of the new building at $10 million.
Plans call for combining some units in the existing building to create two-bedroom units. Ultimately, Ciganik said, the renamed complex will have about 150 units.
Ramsey County property records indicate that CCHT paid $5 million for the apartments. Ramsey County provided $550,000 to assist with acquisition financing.
“We’re hoping that we’ll be able to start on the major rehab next spring,” Ciganik said.
Ciganik said CCHT is likely to tackle similar rehab projects of more modern apartment buildings.
”A lot of communities see these as, ‘Let’s knock it down.’ We really see it as recycling on a grand scale,” Ciganik said. “Why not keep that infrastructure? You can preserve a lot more units at half the cost.”
Noting the project budget, Ciganik pointed out that the construction cost for the new units works out to about $200,000 per unit, contrasting with $100,000 per unit to rehab the existing units.
Mayor in support of idea
Roseville Mayor Craig Klausing welcomes CCHT to the first-ring suburb.
“I like the ability to take properties which have the potential to become problem properties and turn them around and update them and make them much more attractive facilities,” Klausing said.
He also likes the mix of affordable and market-rate units that the project will provide.
“Our daytime population is actually greater than our evening population, with people coming to work into the city,” Klausing said. “Affordable housing options are limited. I was very impressed with other projects that they have done.”
Meanwhile, CCHT closed on the long-troubled Renaissance Box building, 509 Sibley St., in downtown St. Paul a few weeks ago.
Previous owner Martin Lubell struggled to make the vintage building work with a mix of eclectic commercial tenants. CCHT is planning to overhaul to bulk of the building into workforce housing.
“We still really are tremendously supportive of the bike depot and the theater and would like to figure out how we can keep them there. It will be primarily workforce housing,” said Alan Arthur, president of CCHT. “When we took over the building, I would say it was 50 percent vacant. We’re down to 25 percent occupancy at most.”
A sale price was not yet available through Ramsey County property records. Ciganik estimated the preliminary budget for rehabbing the Renaissance Box at $14 million to $14.5 million.
On Aug. 1, new residents will begin moving into the rehabbed Crane Ordway building in downtown St. Paul. The building sat vacant for more than three decades before CCHT tackled the project to provide 70 units of housing.
The Crane Ordway was CCHT’s first project outside of its home base of Minneapolis.
Ciganik said the nonprofit is talking to several other communities about affordable housing projects.
“We’re working with several other suburban areas,” Ciganik said. “We have to pick and choose what makes the most sense. We’re looking for long-lasting partnerships with these communities.”
