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Fall comes early for Twin Cities home builders

Fall always signals the end of the construction for Twin Cities home builders, but the building season is winding down unusually fast this year. During September  there was a six percent decline in permits to build single-family houses, but apartment construction increased slightly, according to a monthly report from the Builders Association of the Twin Cities.

During the month 388 permits were issued to build 903 units, including houses and apartments. That was a 11 percent decline in total permits and a 14 percent increase in new units.

Apartments and other multifamily housing represented 58 percent of total construction activity during the month. More than 530 units were permitted, a 34 percent increase over last year. Because a single permit can be issued to build more than one unit, volatility in apartment permits from month to month isn't unusual.

Markets across the country are seeing a healthy increase in home building, but here in the Twin Cities, residential construction has been slow and steady. In a statement, BATC president Chris Contreras, attributed the slowdown to new building codes that make some new houses more expensive.

“We are happy to see Twin Cities residential construction holding steady, but we remain disappointed as the number of permits pulled continues to miss our expectations,” he said.  “As we hear more and more news of the major residential construction gains across the country, we grow more concerned that our state’s regulatory burden is making housing affordability a challenge." 

Here are the top cities for permitted units:

  1. Edina: 258
  2. Monticello: 141
  3. Minneapolis: 126
  4. Lakeville: 31
  5. Blaine: 30

Minneapolis' historic Jackson Building gets financing to become hotel

The Jackson Building on the corner of Washington Ave. and Third Ave. N. will be developed into a hotel. (KYNDELL HARKNESS/STAR TRIBUNE)

The Jackson Building on the corner of Washington and 3rd avenues N. will be developed into a hotel. (KYNDELL HARKNESS/STAR TRIBUNE)

The money needed to turn the historic Jackson Building in downtown Minneapolis into a boutique hotel is now in the bank — and from the bank.

Developers of the Hewing Hotel have secured $31 million in construction and bridge loans from U.S. Bank while U.S. Bancorp Community Development Corp., a division of U.S. Bank, is investing $6.3 million in federal historic tax credits.

The renovation project is expected to open by the end of 2016 and will cost $38.4 million.

Once complete, the 125-room hotel promises to offer an unusual lodging option in a bustling area of downtown. The 93,000-square-foot Jackson Building, at the corner of Washington and 3rd avenues N., was built in 1897. At one time, the building served as a farm implement showroom and warehouse. In recent years, it has been vacant except for a music school on the first floor.

“This project represents a lot of what we like to see in historic rehabs,” said Alex Silversmith, the project manager from U.S. Bank. “It’s a strong development team, it’s in the North Loop, which continues to grow, and the former Jackson Building is one of the last remaining vacant warehouses. A group that’s done this well before, I think, will bring it to its highest and best use.”

Co-owner Aparium Hotel Group of Chicago specializes in developing small-scale hotels that reflect the local flavor. The Hewing name is a reference to an old logging process, paying homage to the industry’s history in Minnesota.

“It will have a progressive, Nordic feel,” said Mario Tricoci, chief executive of Aparium. “It will be elegant and edgy, always comfortable and approachable, high design for sure.”

This will be the first boutique hotel in the state for hotel operator Aparium. The group runs the acclaimed Iron Horse Hotel in Milwaukee and, on Sept. 15, opened its second boutique experience in Wisconsin: the Charmant Hotel, on the Mississippi River in La Crosse.

“If the North Loop hotel is anything like their Milwaukee property, it will be an amazing addition,” said David Frank, president of the North Loop Neighborhood Assocation.

Hewing’s other owner, Fe Equus Development of Milwaukee, was the developer on the Iron Horse. The new Minneapolis project will include a one-of-a-kind restaurant and bar, led by Chicago chef Suzy Crofton, and a rooftop social area that will serve hotel guests and the public.

There is no on-site parking, so the ownership group is working to build relationships with parking operators. Nearly the entire first floor will be dedicated to food and beverage, which Tricoci said “will be fantastic with lots of energy around the kitchen.”

Kristen Leigh Painter • 612-673-4767