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Hot Property

Last update: May 12, 2008 - 1:48 PM

INTERLAKEN PLACE

925 Airport Road, Waconia

Type: Multifamily rentals

Size: 48 units total; 26 two-bedroom, 22 three-bedroom

Cost: $10.2 million

Developer: InterLaken Place, Minneapolis

Architect: James Nelson McKellin III Architect, Stillwater

Details: Waconia is one of many small towns coping with the mixed blessings of growth. New developments and growing businesses bring new jobs, but oftentimes, small towns don't have affordable rental housing for workers who want to take those jobs.

Workforce housing is the focus of InterLaken Place, a new apartment complex scheduled to break ground this month. The $10.2 million project is the work of InterLaken Place of Minneapolis , with support from the city, the Metropolitan Council and the Minnesota Housing Finance Agency.

"It's a category of housing that the commercial community is really excited about," Waconia City Administrator Susan Arntz said. "Waconia has a lot of affordable rentals, but we're heavy on senior rental [properties]," she said, adding that some companies have raised concerns about being able to attract workers to the town.

For instance, a Target store is under construction across from the new apartments, providing a retail anchor to InterLaken, a major development launched last year. It promises to add 900 homes and $450 million in retail and housing over time to this town of 10,000 people.

But so far, housing sales have fallen victim to the economy.

The apartment site was purchased from Plowshares Development Inc., the master developer of the nearly 500-acre InterLaken project. The InterLaken Place apartments will be limited to tenants who have household incomes of no more than $39,250 for a family of four. Rents will range from $783 to $920 per month. The city approved a tax increment financing district to capture property taxes for the $300,000 spent on moving a natural gas pipeline. The Met Council chipped in with a $211,000 grant from the Local Housing Initiative Account. InterLaken Place also used state tax credits and Plowshares committed $250,000. InterLaken Place also deferred a portion of its development fee, arranging to have it paid over time through the operation's cash flow.

John Weis, development manager for InterLaken Place, said the deferral was partly as a gesture of good faith in the project, and partly as a concession to the economic realities of getting a project in the ground these days.

"It's a tough market," he said. "It's kind of 'bird in the hand.' "

Construction is to start soon, with completion in late fall.

ANNE BRETTS

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