Make way for another big apartment complex in Alexandria.
Kinkead Apartments will be a four-story, 128,000-square-foot facility off of 50th Avenue, south of the Knute Nelson Grand Arbor campus. It will provide 103 units of mixed income housing with one, two or three bedrooms. Twenty percent of the units will be available to those with low to moderate incomes.
The $15.5 million project also calls for green space, a dog park, in-room laundry, a fitness center and garages.
The developer is Kinkead Apartments LLC - a partnership between James Deal, Pamela Deal and Matt Kuker. They also built the Runestone and Granite Manor apartments north of the new complex.
The developer agreed to cover the construction of a new public road, Arbor Crossing.
Since the project would provide some low-income housing, the developer is seeking tax increment financing to help pay for the road and some of the development costs. At its meeting Monday night, the Alexandria City Council scheduled a public hearing for the TIF request on Aug. 26.
Workforce housing was a driving force for the project.
"Douglas County and the city of Alexandria are substantially lacking on the number of affordable/workforce housing units available," the developer stated in the TIF application. "Currently, that need is in excess of 200 units."
The developer also expects the project to spur other development in the area, which also includes the Alexandria Area High School.
"This building, in addition to the first and second phases of apartments we have built and along with Knute Nelson, will drive traffic that will assist in the demand to develop the nine commercial acres across from the high school.
Another apartment project gets tax break
Also at Monday's meeting, the developer of another apartment project - a three-story, 36-unit building estimated to cost $5.6 million - received a tax break.
The council approved a tax increment financing request from Central Lakes Housing LLC, a partnership between D.W. Jones and the Alexandria Housing and Redevelopment Authority.
A public hearing was held before the vote but no one from the public spoke.
With TIF, property values are frozen at the current amount for a specified period of time and the new higher taxes that would normally be paid once the property is redeveloped are diverted to help cover some of the costs of the project.
This TIF request is a bit different because it does not yet have a specific time period when the TIF will be in place. Nicole Fernholz, director of the Alexandria Area Economic Development Commission, said a note of $539,402 will be issued to the developer and the length of the note will depend on the interest rate, market value and inflation rate. It will be added at a later date, she said.
The city benefits because the developed property will ultimately generate more taxes. In this case, the market value of the property, currently at $57,200, is expected to increase to nearly $4 million after it's developed.
The 50,000-square-foot apartment complex, known as Central Lakes Apartments I, will be constructed on two acres of vacant land the developer already owns on Runestone Place, west of Birch Avenue and Lake Geneva.
The developers said the project will provide both affordable and market rate workforce housing, which are in short supply.
Plans call for two studio apartments, 14 one-bedroom units, 17 two-bedroom and three three-bedroom units. Eight units will be income and rent restricted to those with incomes no more than 50 percent of the median income in Douglas County.
All units will have a deck or patio and the building will have a community room with kitchen. Plans also call for a shared playground area and 20 detached heated garages.
The project is being partially funded by a $1 million workforce housing grant the city received from the Minnesota Housing Finance Agency. It requires a $1 match for every $2 provided in funds. Establishing the TIF district will fulfill the city's match requirement.
Back in April, the council approved a TIF request for Central Lakes Apartments II, a $6.9 million project that includes 33 units, all for low-income and homeless people. Central Lakes II is applying for housing tax credits through the state.
This latest project is a different project that will be mixed-income housing. The two apartment buildings will be adjacent to each other and the buildings will look similar.
The project is expected to begin this September and be completed in July 2020.