Affordable housing developer Aeon has a purchase agreement for a 2-acre site at 4100 77th St. W. in Edina, where the Minneapolis Media Institute occupies a single-story building. (Staff photo: Bill Klotz)
One door closed, but another one has opened in Edina for affordable housing developer Aeon.
In February, the Minneapolis-based nonprofit and Ryan Cos. US Inc. pitched a 90-unit mixed-income apartment building at 4040 70th St. W. in the west metro suburb. But that plan is off the table after the owner of the property, ACA International, decided not to sell, said Blake Hopkins, Aeon’s vice president of housing development.
“We fell out of site control on that property, but felt we had some good long-term relationships in the community,” Hopkins said in an interview Thursday. “We actively pursued a new parcel that made sense for the development, and felt like we really found one at 76th Street West.”
That’s how Hopkins wound up back in front of the Edina Housing and Redevelopment Authority on Thursday to present a new proposal for a $21.97 million, 80-unit affordable housing project at 4100 76th St. W. The HRA approved a $925,000 tax increment financing district, and tabled a request for $3 million in additional city money until May.
Aeon is no longer partnered with Ryan for the latest proposal.
The unit mix includes 20 one-bedroom units, 40 two-bedrooms and 20 three-bedroom apartments. Hopkins said affordable housing for families is a priority for the project.
The plan is in a very early stage, Hopkins said. Still, Aeon anticipates offering 32 units to renters making 60 percent or less of the area median income, 44 to renters making 50 percent or less of the AMI, and four units to renters making 30 percent or less of the AMI, which is $94,300 for a family of four.
Aeon likes some of the specific features at the site, including a private park with mature trees near the back of the property that Aeon hopes to incorporate in its design. Hopkins said the location is well-positioned near transit, public parks and other amenities.
The site is a half-block west of France Avenue and Centennial Lakes Park, and five blocks south of the Galleria Edina shopping center. Edina Economic Development Manager Bill Neuendorf said it’s a good location for the project.
“You still have everything that you need, but you don’t have to pay a premium for the real estate located right on France,” he said in an interview.
Neuendorf said the city has struggled to find affordable housing developers to match its market-rate and luxury housing boom. Although Aeon is still in the planning process, the HRA funding, if granted, will help Aeon as it pursues additional funding sources to move forward, Neuendorf said.
“With these affordable projects, the funding queue is so long, so before they get into any of the site plan details, they just want to see if it’s even feasible,” he said.
Aeon would seek about $11 million in tax credit equity through the Minnesota Housing Finance Agency, a mortgage, state and Hennepin County loans, and tax and energy rebates, according to a financing breakdown.
The cost of construction is estimated at about $13 million, plus $2.9 million to acquire the property, almost $3 million in professional and developer fees and $1 million in contractor fees, among other expenses.
Aeon also doesn’t have to worry about another land deal collapsing. Hopkins said Aeon has secured a purchase agreement for the 2-acre site, where the Minneapolis Media Institute currently occupies a single-story commercial building.
“We do know Edina tends to command higher rents for their market-rate and luxury apartments, so at Aeon we feel we can fill a different niche and provide something that’s more workforce level,” he said.
Construction won’t begin until summer 2019 at the earliest, Hopkins said.
Aeon currently operates 3,900 units in 56 properties around the state.