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Tuesday, December 6, 2022

St. Paul City Council backs new deeply affordable housing projects

To fund the construction of Farwell Yards, two new apartment complexes near the junction of Plato Boulevard and Water Street, the St. Paul City Council has established a new $24 million tax increment financing district.

The funding will help build a new navigable route connecting Plato and Water where the abandoned Bidwell Road now stands, as well as a mix of moderately priced and profoundly priced residences.

The city will also use existing “TIF” funds to fix the region’s overburdened sanitary sewage infrastructure.

115 Plato Boulevard will house an affordable housing building, while 150 Water Street will house a market-rate, mixed-use structure. The mixed-use structure will have 2,600 square feet of retail space and 221 rental dwelling units. 49 one-bedroom flats will be included among the 63 units that make up the affordable housing.

Six apartments will be prioritized for the needy or disabled and will only be available to residents making no more than 30% of the typical income for the neighborhood. 12 apartments will be designated for households making 60% of the local median income or less, and another 45 units will be held for those making no more than 50% of the median income in the region.

The present property includes a garage with metal pole-barn structures, a disused varnish plant, two long-empty warehouse buildings, and more that will all be removed.

The procedure for the $24 million tax increment financing district is as follows: The assessed market value of the empty homes is $3.48 million right now. Farwell Yards is anticipated to have a market value of $62.5 million once it is completed. At complete build-out, the $59 million difference will result in yearly property tax payments above the existing value of more than $900,000.

The tax increment will be utilized to pay for site improvements like the new road on Bidwell Street rather of going to the city’s general treasury. The developer will contribute $23.5 million throughout the course of the TIF district from 2025 to 2050, or $912,000 a year, plus an additional $700,000 in interest and investment gains.

The developer will be given a pay-as-you-go note for $2.2 million from the city’s Housing and Redevelopment Authority in order to purchase and renovate Bidwell Street.

On Wednesday, the council, acting as the Housing and Redevelopment Authority, voted 7-0 to approve the new TIF area.

The city council also authorized the use of $5 million last week to upgrade sanitary sewers in the region bordered by the Mississippi River on the north, Wabasha Street on the east, Smith Avenue on the west, and the bluff on the south. This money came from other existing TIF districts.

The sewer reached its maximum capacity during high flow periods, according to a study by SEH engineers that St. Paul Public Works requested last year, and it required $9.8 million in improvements.

The city came to the conclusion that while it might recover part of the costs through a special sanitary sewer district that levied financing charges on new construction, it would still require the $5 million in current TIF to lessen the financial load.

Buhl Investors had stated that Farwell Yards could not proceed without the city’s support for the necessary renovations.

The Twin Cities car manufacturing factory of Ford Motor Co. was once located at Highland Park’s Highland Bridge, where the city council also authorized funds for two Project for Pride in Living structures. Both initiatives would construct affordable housing backed by conduit multi-family housing revenue bonds and “pooled” TIF loans secured by the 182-unit independent senior living and memory care complex from Presbyterian Homes, which is located close by and has market-rate housing.

The 60 affordable rental housing apartments in the five-story “Restoring Waters” project at 801 Mount Curve Boulevard and 2265 Hillcrest Ave. will largely be efficiency flats with a few one-bedrooms, and they are focused for formerly homeless women and their dependent children.

All 60 of the units, including nine homes for the disabled, would be allocated for those making no more than 30% of the regional median income. It will also feature the corporate headquarters of nonprofit service provider Emma Norton.

The five-story “Nellie Francis Court” building at 2285 Hillcrest Ave. will provide 75 affordable rental units, including 26 efficiency flats, 30 one-bedrooms, and 19 two-bedroom units, for households earning between 50 and 60 percent of the local median income. Through subterranean parking, the project will be connected to Restoring Waters.

Cedric Blackwater
Cedric Blackwater
Cedric is a journalist with over a decade of experience reporting on local US news, and touching on many global topics. He is currently the lead writer for Bulletin News.

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