Once a poster child for the collapse of the housing bubble, Hugo’s mostly vacant Generation Acres subdivision will finally be built out after being donated to Twin Cities Habitat for Humanity.
Habitat received the 5-acre property this year as a gift from Joel and John Schwieters of J.L. Schwieters Construction in Hugo, who had purchased the development-ready lots out of bankruptcy in 2009. That land gift, worth more than $1 million, has been deemed the largest in the history of the local Habitat group.
Now the nonprofit says it’s getting ready to break ground on 33 affordable townhouse units using its system of training potential homeowners in the skills of citizenship and requiring “sweat equity” contributions via participation in the construction process.
Its donation to Habitat represents something of a happy ending for the troubled Generation Acres project. Originally platted for 41 condominium townhouses by an Anoka developer in 2004, only eight, contained in two buildings, were erected before construction came to a halt in 2007.
The project was one of a dozen in the Twin Cities backed by Lakeland Construction Finance, an Eagan-based lender that defaulted on more than $400 million in loans from the Royal Bank of Scotland as the housing bubble collapsed.
The Schwieterses purchased the property — only a few minutes from their Hugo headquarters — out of foreclosure and have spent the past few years trying to decide what to do with it.
“We looked at all kinds of things, from apartments to for-sale housing, but what we do is supply labor and materials — we’re not a general contractor,” said Joel Schwieters. “So when Habitat came along, it was really a nice fit.”
The two sides first talked about selling the townhouse building parcels one at a time over a five-year period, but then agreed that a single donation would work out better.
The motivation for the Schwieters brothers is both altruistic and professional. They hope to set an example for others in the construction industry to work with Habitat to address the serious lack of affordable housing for young families, especially in the suburbs. They will be supplying the workers and building materials for the Habitat effort.
But they also are seeking to tackle another problem of their own: The lack of skilled construction trades labor in the northeast metro suburbs. John Schwieters said one reason they chose to work with Habitat is its policy of requiring would-be homeowners to get basic construction training to help pitch in with the building of their future homes.
“I have to say there’s a hope that we could possibly add to our workforce by recruiting some of the new residents to work for us,” he said. “We employ a lot of people and Hugo went through a period in the recession where there wasn’t any building. That meant fewer people moving in and fewer people coming to work for us — this looks like an excellent opportunity to address that.”
Susan Haigh, Twin Cities Habitat for Humanity’s president and CEO, said that “the donation of 33 lots to us just extraordinary,” she said. “Not only that, but they are in a very nice neighborhood. It’s right by [Hugo Elementary School]. It’s going to just be a wonderful place for Habitat homeowners to raise their families.”
She praised the Schwieterses for making the transfer process as “smooth and uncomplicated as one could imagine — and that isn’t always the case. It’s been a dream for Habitat.”
The nonprofit has a lot of experience in multifamily townhouse construction, especially after the collapse of the housing boom at for-profit developments that stalled out.
“We’ve been able to go in and purchase townhome pads, but we’ve never had anything like this,” Haigh said.
Don Jacobson is a St. Paul-based freelance writer and former editor of the Minnesota Real Estate Journal.