The Penfield development project should get underway soon, the mayor's office said.
The U.S. Department of Housing and Urban Development has agreed to provide a $41 million federally insured loan for the $62 million, city-developed apartment building that will have 253 market-rate units. If the project fails, HUD is to take it over.
With this news, the city expects to close on the financing within 30 days. Construction should begin soon after, Coleman's office said.
The Penfield is to sit on a full city block at the northeastern edge of downtown, just a block from the Central Corridor light-rail line.
A park is planned adjacent to the building at the site of the shuttered Pedro's Luggage store.
The Penfield has been a tough sell with some council members because the city is acting as the developer of apartments that compete with private developers.
The city project will include a 27,000-square-foot Lunds grocery store on the ground floor of the six-story building.
Coleman calls the project "catalytic, not just for downtown but for all of St. Paul. It will drive business along the Central Corridor and provide the quality, full-service grocery store our downtown residents having been seeking for many years."
The HUD money, along with $15 million of primarily tax-increment financing funds and enterprise cash, will cover the cost. A Met Council grant of nearly $2 million and the $3.5 million cost of the land comprise the rest of the project. Rents are to range from $1,055 for a studio apartment to $1,890 for a three-bedroom, according to city documents.
The private Village Green would be expected to manage the rentals. The property sits on a block bounded by Robert, Minnesota, and E. 11th and 10th Streets.
Rochelle Olson • 651-925-5035 Twitter: @rochelleolson