The property at 4100 W. 76th St. is vacant, having most recently housed a recording school. Earlier, the facility on the property was home to Jimmy Jam’s and Terry Lewis’ Flyte Tyme Studios. (Sun Current staff photo by Andrew Wig)
Edina leaders are trying to prove their dedication to affordable housing.
Their latest effort in that spirit came during a Nov. 29 Edina Housing and Redevelopment Authority meeting, when the HRA voted unanimously to draft a purchase agreement for the former Flyte Tyme recording studio at 4100 W. 76th St., the site where affordable housing developer Aeon plans to build 80 apartment units. Under the prospective purchase agreement, the city would pay the property owner, Twin Cities Land Bank, $2.9 million for the site, a move that would save Aeon about $350,000 in interest payments, according to a staff report prepared for the HRA.
In 2015, the city began requiring developers to include affordable housing in projects that require land-use exceptions. There has nevertheless been skepticism among affordable housing advocates who question Edina’s commitment to the cause, City Manager Scott Neal said.
“But, we’ve been convincing them slowly but surely that we are serious about it,” Neal said. “ … And this would be another action that we could show that we are serious about that.”
The city has already dedicated to the project $2.4 million from its Southdale 2 Tax Increment Financing Fund, money that has accumulated from a special arrangement predicated on redevelopment and the subsequent increasing land values in Edina’s Southdale District. If the land purchase goes through, the city would hold the property for two years, at which point Aeon is expected to be ready to acquire it.
In May, Aeon signed a purchase agreement with MRI Holdings, LLC, to acquire the former recording studio, which is now vacant. However, the agreement included a stipulation that the sale would have to be completed by Oct. 30 or otherwise become null and void. With Aeon not prepared to make the purchase by that time, Twin Cities Land Bank bought the property instead and agreed to hold it for the nonprofit developer while charging 6.5 percent interest.
In commercial real estate, purchase agreements typically last two to three years, but landowners aren’t so patient in Edina, according to Stephanie Hawkinson, the city’s affordable housing development manager.
Demand and prices are so high, she explained, “that sellers tend to not want to wait around for three years until they actually get rid of their property and get the financing from that.” Developers of affordable housing like Aeon typically take two to three years to get their financing in order, Hawkinson further explained.
The proposed terms of the purchase agreement stipulate that when Aeon ultimately acquires the property, it would pay the city $500,000 – the difference between the city’s $2.4 million commitment and the $2.9 million purchase price – plus associated costs. The earliest Aeon could buy the property from the city would be spring 2020, according to the staff member report.
An overhead view shows the first-level floor plan for an apartment building at 4100 W. 76th St. that will bring 80 units of affordable housing to the area. (Illustration courtesy Aeon)
“Every dollar we can save means a less expensive unit for someone in the future,” Fischer said.
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