Nonprofit to replace run-down housing in north Minneapolis

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A huge affordable townhome neighborhood in north Minneapolis once partly demolished due to poor site conditions will soon be replaced by rare, new Section 8 apartments.

Minneapolis-based nonprofit Community Development Housing Corp. plans to start construction on the 92-unit apartment building at 461 Gerard Terrace by late summer, according to plans recently filed with the city. The five-story building will rise on about 2 acres of land on the south side of Olson Memorial Highway and could be ready for occupancy by late 2021. The new apartments would be nearly adjacent to the planned Van White Boulevard station on the future Bottineau light rail line.

The Minneapolis Planning Commission Committee of the Whole was scheduled to evaluate the project at its Jan. 30 meeting.

The $28 million project will replace 92 rental townhomes remaining in the Olson Townhomes affordable housing community. The buildings were part of a 200-townhome subdivision the predecessor to the Minneapolis Public Housing Authority built in 1956. CDHC, which has owned the townhomes since 1993, is choosing to build the apartments, then raze the townhomes to bring higher quality housing to the property, said Heidi Rathmann, CDHC’s senior vice president of housing development.

Built in Bassett Creek’s floodplain, the homes have sustained damage over the decades, including shifting and cracking basements and foundations, cracking drywall and sloping floors, she said.

“They’re in very poor physical condition,” Rathmann said in a Thursday interview. “The city and the county have committed funds over the years that have put Band-Aids over the problems.”

The city demolished 108 of the townhomes at some point, then rehabbed the remaining homes and sold them to the National Housing Partnership in 1978. The remaining townhome units are about 100% occupied.

The CDHC plan will allow Olson Townhomes residents to continue living in the homes until the apartment building is complete. The townhomes will be demolished after residents move into the new building, Rathmann said. About 4 acres where the townhomes currently stand will then be available for future housing construction.

The new building will have one-, two-, three- and four-bedroom apartments. Units will range in size from 640 square feet of space to about 1,700 square feet of space. Several of the larger units will have exterior, walk-up entries, Rathmann said.

Building amenities would include a playground, indoor community space, washers and driers in larger units and common laundry rooms on two floors. The property will have 163 surface parking stalls, according to the project’s filing with the city.

CDHC worked on the plan for the housing for the past six years, considering both new construction and rehabbing the existing townhome units. The rehab was estimated to cost about the same amount as building the new apartments, Rathmann said.

Funding for the project will come from equity raised with 4% low-income housing tax credits, a mortgage, Hennepin County’s Affordable Housing Incentive Fund, the Minneapolis Affordable Housing Trust Fund, CDHC’s own equity and refinancing some existing deferred debt on the 461 Gerard Terrace property.

The U.S. Department of Housing and Urban Development has agreed to ink a new, 20-year Section 8 contract for the new apartments, Rathmann said.

Hopkins-based Frana Cos. is the general contractor for the project. The Minneapolis office of LHB is the project architect.

This year will be one of the most intense years of construction CDHC has undertaken. The nonprofit recently finished a $27 million renovation of the 112-unit Unity Place in Brooklyn Center. On the work list for 2020 is the construction of the 169-unit Eastown apartments at 619 Ninth Ave. S. in downtown Minneapolis, the historic conversion of a school into the 49-unit Emerson Union in New Ulm, the renovation of the 61-unit Park 7 at 714 Park Ave. in Minneapolis, and construction of the 191-unit Riverside Homes at 617 19th Ave. in Minneapolis.

The CDHC also owns about 2,500 units of affordable housing, including the three-building, 134-unit Park Plaza apartments next door to the Olson Townhomes at 525 Humboldt Ave. N.