CommonBond Communities was awarded nearly $7 million in Minnesota Housing Investment loan products and $2.2 million in a 4 percent tax credit equity to support the expansion of Le Sueur Meadows.
The apartment development off Turril Street will get 39 new 1-, 2- and 3-bedroom apartments.
The total project cost is $9.4 million.
“We’re just really excited that Minnesota Housing Finance Agency considered this project a priority,” Project Manager Justin Eilers said. “We’re happy to see projects in both the metro and Greater Minnesota and that they supported quality workforce housing in Le Sueur.”
The state awarded a $1.4 million permanent amortizing mortgage and $5.5 million in a deferred loan, which means the developers don’t pay on the loan while the units are kept at affordability price limits. That extends until about when the units need rehabilitation.
The project was also awarded more than $2.2 million in federal low-income housing tax credits. Investors purchase the tax credits to reduce their own tax bills. The tax credits are very competitive.
Locally, the city of Le Sueur will support the project through a Tax Increment Financing district.
“It’s workforce housing, which is what we need,” Community Development Director Samantha DiMaggio said.
The workforce housing project will take in families with incomes of up to 60 percent of the median family income, or $31,700 to $44,000, with four units marked for those who have experienced homelessness and four for those with disabilities.
The council pledged its support for the project in May. The city said it would extend a TIF district with the expansion. It had originally promised the initial developer, Sherman Associates, a district extension in 2005 in exchange for an expansion, but that never transpired. The district could be extended to 2028.
“The council may need to clarify that it is willing to do that,” DiMaggio said.
But there will be little else that requires council action. To build, CommonBond will need to submit an application that complies with city rules, including appropriate circulation and egress, in order to obtain a building permit.
“It’s already zoned for that,” DiMaggio said.
Eilers said they presented local organizations and the agency with an initial concept. More design work will follow. CommonBond hopes to begin construction in summer 2019.
“We’re really excited about the opportunity and happy to be in Le Sueur with great community support,” he said. The city, school district, chamber of commerce and others sent letters in support of the application to the agency.
The award was announced Thursday with more than $87.5 million in federal and state government resources to create and preserve more than 1,700 affordable homes across the state. The statewide effort will support 55 developments with a total development cost of $364 million.
“We know that the smartest investment we can make in our state’s future is securing a foundation of strong communities and stable homes for all Minnesotans,” Minnesota Housing Commissioner Mary Tingerthal said in a news release. “Since the beginning of the Dayton administration, we have touched every corner of our state by investing $1.7 billion in more than 35,000 units of affordable housing. I’m proud of our work and the difference it has made for children, families, businesses and communities across Minnesota.”