Lupe Development Partners plans to begin construction in August on the second phase of its mixed-income campus near the Uptown intersection of Lyndale Avenue and Lake Street, company officials announced Monday after receiving approvals from the Minneapolis City Council.
The campus will include three mixed-income and affordable housing projects along Lake Street, near where rioters in late May damaged many buildings in the Whittier neighborhood.
The City Council’s approval jump-starts the second and third phases of the campus project, company officials said.
The first part of the project — Lake Street Dwelling at 410 W. Lake St. — is already under construction and will have 111 affordably priced units at a cost of $26 million when it opens in October, said Steve Minn, vice president and chief financial manager of Minneapolis-based Lupe Development Partners. That structure was damaged by an incendiary device during the rioting last month.
Luckily, the device hit a concrete slab and didn’t burn down the building, Minn said. “These were very nervous nights for me and my team. Nobody slept that weekend.”
The Lake Street Dwelling building remained secured with staff and sustained broken glass, but lumber and flammables had been removed from the building, so damage was minimal, Minn said.
On Friday, the City Council approved the $32 million second phase of the project. Now a loan for the new “Lago” building at 500 W. Lake St. will be finalized Tuesday and an existing auto-repair business on the site is scheduled to be torn down in August. Construction on the seven-story site starts a month later and is expected to take 16 months to build 132 apartments and 1,700 square feet of commercial space.
The Lago will rent studios, one- and two-bedroom units, as well as townhouses priced at market rates — between $1,250 to $2,600 a month. The price points were chosen with the hopes of attracting entry-level renters who work nearby, officials said. Common amenities will include a green roof, a bicycle maintenance and repair room, a fitness facility, a business center and community rooms.
The Metropolitan Council and the state issued about $464,000 in combined grants to assist with site development and environmental and utility work for the phase two site, Minn said.
The third phase of the project will offer 95 affordable housing units at 550 W. Lake Street. Construction there won’t begin until next year, officials said. Its project cost is estimated at $28 million.
Taken together, about 61% of the campus will offer affordable-housing options and shared amenities at affordable price points, Minn said.
The need for affordable-housing options is urgent given the exploding homeless crisis in Minneapolis and the destruction of the nearly complete Wellington Management project farther east on Lake Street, which was destroyed by fire after the June 25 police killing of George Floyd. The Wellington project’s nearly 190 affordable units were to open later this year. Now, project managers are starting anew.
“With the recent devastation along Lake Street, continued investment in this neighborhood is critical. These projects fill a critical need for high-quality housing and amenities without the luxury price tag,” Minn said. With the City Council approvals, “We are excited to continue the momentum for our mixed-income campus at Lyn-Lake. … Transit options on Lake Street are only getting better, and we will be in proximity to the many jobs and employers in the area.”
In separate real estate industry news, CBRE announced that it has sold Reuter Walton Development’s 118-unit Grove apartment building on Snelling and St. Clair avenues in St. Paul to Continental Properties Co. The $30 million building was completed in October and is about 70% occupied.
About 4,500 square feet of retail space remains unoccupied, a CBRE official said.