A project that eventually could add more than 100 apartment units to downtown Osseo broke ground this week after years of planning and strategic property acquisition by the city.

The Beard Group, the local developer overseeing the project, has named the two-phase development "Five Central." Phase I entails a three-story apartment building slated for completion sometime next summer. It will house 71 units ranging from studio to three-bedroom, although most of them are one- or two-bedroom. Phase II features 45 more apartments and 8,000 square feet of retail, but that won't be built for several years.

Bill Beard, president and CEO of the Beard Group, said that the convenience and walkability that living in a suburban downtown offers will appeal to the millennials and baby boomers who are driving the skyrocketing rental housing market.

"[Both groups] want the same thing — they want to be able to walk to amenities, and they like the connection and proximity to the trails and parks and grocery stores," said Beard.

Recently the Beard Group completed similar projects that filled in blighted areas in downtown Hopkins and Robbinsdale.

Over the past decade, the city has purchased eight properties that ring "Block 6," the square block located directly north of Osseo City Hall. Five of those properties on the western side of the block were razed to accommodate Phase I of Five Central, and the other three buildings on the eastern side of the block will meet the wrecking ball before Phase II begins.

"The Block 6 area has been tabbed for redevelopment for at least five-plus years," said Osseo city planner Riley Grams. "The first [property Osseo bought] was about 10 years ago, and then we decided that if we could snap up some of these other properties, we could actually have a larger block to really do something with."

Five Central will be at least 20 percent affordable housing, because affordable-housing grants from Hennepin County and the Metropolitan Council obtained by the city are being used to finance the project. But Beard pointed out that plans call for granite countertops, stainless-steel appliances and other high-end amenities, calling Five Central "essentially the same project as Marketplace & Main," the mixed-use development featuring luxury apartments and street-level retail his company recently opened in downtown Hopkins.

"Because [the Five Central project] has an element of affordability, that always has some contention and needs to be explained, but it's really more like workforce housing; it isn't the deep-discount, Section 8-type housing," said Beard.

The groundbreaking of the Five Central complex comes on the heels of the City Council approving the construction of a gun club a few blocks away, highlighting the city's efforts to bring more people into its downtown.

"The point is to try to get as many people [downtown] to have it be a much more lively and thriving area, and we think that a 71-unit apartment building … will bring a lot of people right there, and the corresponding gun range is really seen as a destination location for people to use that, but also use surrounding businesses at the same time," said Grams.

Five Central only calls for 113 parking spaces for a structure that will house about the same number of people, but Grams said the city spent a lot of time reviewing potential parking issues and is confident that the ample surrounding street parking will handle any overflow adequately.

Ben Johnson • 612-673-4499