Woodlake Plaza Apartments

Type: Rental housing

Units: 90

Cost: $10.5 million

Developer: Michael Development

Details: A proposal to replace the half-vacant, 1952-vintage Woodlake Plaza shopping center with 90 units of upscale apartments has been approved for tax increment financing (TIF) by the Richfield City Council, giving the project a critical boost.

St. Paul-based Michael Development, which owns about 2,000 rental units in the Twin Cities as well as the aging shopping center, asked city officials to create an $822,000 TIF district for the proposed apartments, in which part of the completed project's property taxes will be refunded to the developer over a 26-year period to help cover a funding gap.

As part of the deal, the developers will reserve 20 percent of the units for low-income tenants.

The project's plans still must get the approvals of Richfield's Planning Commission and the City Council, but Swenson said the TIF approval was critical to get the proposal off the ground, given the chilly financing climate.

"We're financing with HUD [the U.S. Department of Housing and Urban Development] and making a substantial cash injection of our own into this project," he said. "HUD is the only financier that's doing anything now."

Swenson said the city will benefit from having new rental units in the commercially struggling 64th and Lyndale area, which is marked by a vacant former Kmart store, where 74,000 square feet of space is for lease, and the shuttered, 40,000-square-foot former Lyndale Garden Center and Hardware.

"It will bring in 90 families of people buying groceries and building the economic base in the neighborhood, and it should promote other developments in that area. There haven't been any modern new apartment buildings in that area for many years," Swenson said.

City planners say the only other non-age-restricted apartments built in Richfield in the past 25 years are the Oaks on Pleasant, at 66th Street and Pleasant Avenue S.

DON JACOBSON