Aeon, a Twin Cities nonprofit housing developer/manager, signed final documents today to proceed with construction on a $100 million-plus rental project in Bloomington.

SoLo Apartments, a nod to its location in the city's South Loop neighborhood, will include 172 new units in two buildings adjacent to a 306-unit apartment complex that's also owned by Aeon and will soon be rehabbed as part of the project.

The nearly 18-acre site is located at 1930 E. 86th St., just south of the Mall of America. Aeon acquired the property, which was called Village Club Apartments, in 2019 with financing assistance from the city of Bloomington and the National Equity Fund.

Sarah Harris, Aeon's vice president of strategy, partnerships and production, said the initial goal of the acquisition was to preserve what's called naturally occurring affordable housing (NOAH). The developer has focused in recent years on buying buildings that might otherwise be bought by investors who might fix them up and reposition them as more-expensive market-rate buildings that would be unaffordable to existing residents. The nonprofit has already acquired several NOAH properties throughout the metro.

"We can't build them fast enough," said Harris. "So we're trying to preserve affordable housing that's being acquired by market-rate buyers."

Harris said the new buildings, designed by UrbanWorks Architecture, will include mostly three- and four-bedroom homes to serve mixed-income residents with larger families. Most of the units will be affordable to those who earn 60% or less of the area median income (AMI) and the remaining units will be for those at or below 80% of the AMI.

She said Frana, the general contractor, will begin construction in August. Aeon owns and manages affordable homes that serve nearly 12,000 people in the Twin Cities each year. The nonprofit has already developed and preserved 5,580 income-restricted apartments and work is underway on several more.

When possible, Harris said, the developer will build additional housing on the site if space permits.

In this case the site had room for additional buildings on what had been green space and parking lots.

"When we bought it we looked at it and said, 'Let's be smart about how we use our resources,' " she said.

The reconfigured project will include new parking, homework space, a playground, an indoor and outdoor pool, a racquetball court, a movie room and updated community space.

Late last year the Bloomington City Council approved a $15 million affordable-housing trust fund in part to facilitate Aeon's purchase of Village Club.

"This would not have been possible without our partnership with Aeon or before we established our $15-million affordable housing trust fund and the opportunity housing ordinance," Bloomington Mayor Tim Busse said in a statement. "We are glad to see the City's commitment to affordable housing result in a tangible addition to our community so quickly."