Thompson Heights

Type: Senior rental housing, single family homes

Units: 60

Estimated cost: $6.9 million

Developer: Dakota County Community Development Association

Timeline: 2010 start

Details: Dakota County's Community Development Association (CDA) is adding to its 20-year push to build new senior-citizen rental housing complexes with one of its more innovative projects, set for South St. Paul.

The county has won final approval for a suburban infill project replacing an old school building with Thompson Heights, a 60-unit affordable senior-citizen apartment complex, which, in a twist, is surrounded by lots suitable for six new single-family homes.

Because the school's owner, Intermediate School District 917, has no authority to issue bonds for new construction on its own, the county instead arranged to buy and raze the old school, in the meantime building a replacement special-needs school in Rosemount. The CDA will issue the district a lease for the new school to repay the bonds. The 1950s-era edifice known to several generations of South St. Paul children as Lincoln Elementary will be demolished next year, and the new apartments and housing lots are set to be ready by 2010.

Market-rate senior apartments may be a hot trend now, but Dakota County has been in the senior housing business since 1988, when it launched an ambitious plan to construct 10 such apartment buildings in 10 years.

By 1998, it had proved such a success that the county approved another 10 buildings -- recently giving the go-ahead for a third decade of construction.

The reason has been demographics: Ulfers said the 1988 study saw that baby boomers who had limited incomes would provide a steady stream of clients for affordable apartments well into the future. Thanks to a 2007 bond sale, housing officials have the financing lined up for the Thompson Heights project, as well as others underway in Lakeville and Apple Valley.

Financing in the future, however, will be harder, Ulfers said, observing that even a record of more than a dozen successful projects and bond issues backed by Dakota County's AAA credit rating may not be enough to lure investors going forward.