$22 million makeover planned for Brooklyn Park's affordable housing

When Gloria McCaskel heard that her Brooklyn Park apartment would be part of a $9.3 million building makeover, she wondered if she might be priced out of her home.

"I was excited but I got kind of worried. It is low-income housing," she said.

So she was relieved to hear that her Park Haven apartment complex would remain affordable — along with three other aging Brooklyn Park rental complexes slated for nearly $22 million in renovations that should improve living conditions for the city's neediest residents.

The ambitious projects include new roofs, siding, windows, parking lots and playgrounds outside, and remodeled kitchens, bathrooms and carpets within.

After the work is done, nearly 680 apartments and townhouses will remain affordable either through income restrictions or the Section 8 federal housing program.

City officials said the three building owners are well-established Twin Cities real estate players with affordable housing backgrounds: Sherman Associates, Boisclair Corp. and Dominium.

The city's Economic Development Authority approved a total of $1.6 million in short-term loans for renovations at Autumn Ridge, owned by Sherman, and Brooks Landing and Brook Gardens, both owned by Boisclair. The city also will help Dominium borrow $16 million from the Minnesota Housing Finance Agency to buy and rehab the Park Haven Apartments.

Brooklyn Park will collect interest on the loans and a small administrative fee on the Dominium transaction; if all goes well with all the projects, the city could make a little money, said Erik Hansen, economic development and housing director.

Brooklyn Park Mayor Jeffrey Lunde said he's ecstatic to see reinvestment in the city's affordable housing, much of which dates to the 1960s, '70s and '80s.

"People buy the horse, and they forget you've got to feed it. We know affordable housing needs to be maintained," Lunde said. "We want people to reinvest in those units, or they become dilapidated fast. If we find someone who wants to reinvest, we want to support that."

Putting money in apartments protects every property owner in the city, Council Member John Jordan said. "If we hadn't done it, they'd be in lousy shape. That hurts neighborhoods," he said. "It all comes down to what the neighborhood looks like and the property values around them."

The city's help is needed to complete the complex transactions, which involve federal tax credits and loans, the owners said. And its participation in the projects has an added bonus: "It gives us a bit of leverage on what we can request," Hansen said.

Low interest rates and strong demand for rentals are the factors making expansive rehabs possible, owners said.

"All rental housing in general has seen very strong demand especially over the last couple of years. Affordable housing is no different," said Ross Stiteley, senior development associate with Dominium.

Dominium will start a $9.3 million renovation of the 176-unit Park Haven this fall, spending an average of $53,000 per apartment. "Every unit will be touched," Stiteley said.

Aesthetic changes are just part of it. The main issue with the property, he said, is normal wear and tear in the mechanical systems, particularly the plumbing. "There have been a lot of pinhole leaks and water damage," Stiteley said.

Park Haven receives federal tax credits and is part of the Section 8 housing program. After repairs, those will remain in place, Stiteley said.

In the current hot rental market, Brooklyn Park's willingness to pitch in on an affordable project is welcome, said Lori Boisclair, president of Boisclair Corp.

"They were gracious. We have their full support," Boisclair said. "They are a wonderful city to work with."

Boisclair will spend $9.5 million, or nearly $56,000 per unit, to rehab both Brooks Landing, a 110-unit affordable senior high-rise, and Brook Gardens, with 60 units of affordable family housing. Both properties are project-based Section 8 housing, a federally funded program that provides rental housing to low-income households in privately owned and managed units.

Sherman plans to rehab portions of Autumn Ridge in Brooklyn Park for $3 million. It's the company's second partial renovation since it acquired the property in 2007. About 90 percent of the 366 apartments are considered affordable.

Families will not be displaced during or after the construction, said Chris Sherman, a vice president with the company.

The projects mark Brooklyn Park's third major investment in its housing stock in recent years. At the high end, the city provided millions in tax incentives to entice Doran Companies to build a luxury apartment along Hwy 610.

At the mid-price point, the city has bought up more than 150 dingy and often-abandoned single-family homes, upgraded them and then sold them at a loss to families that agreed to live there.

This latest investment in affordable housing rounds out the city's efforts.

"It's very important for us in Brooklyn Park to make sure we have high-quality housing, regardless of what income you make," Hansen said.

McCaskel, a child care worker, has lived in the same Park Haven unit for 15 years. She said management has done a decent job of fixing obvious problems over the years, and she got new carpet last year. Hallways and common spaces look dated and worn, and some things could still use attention, she said, such as outlets that don't work and walls that could use a fresh coat of paint.

But McCaskel said she likes her neighborhood, where she can walk to the grocery store and restaurants, and wants to stay. "It's great. It's friendly. It's quiet. It's respectful most of the time," she said.

Shannon Prather • 612-673-4804