Often-delayed affordable housing project in St. Louis Park will welcome tenants this year

A sustainable and affordable housing community on the future Southwest light-rail line in St. Louis Park is expected to finally welcome tenants this year — after the city granted four extensions to the developer that have delayed completion for three years.

The most recent extension was approved last month by the City Council, with the only dissenting vote cast by Mayor Jake Spano, who said he wanted to send a message to Minneapolis-based nonprofit developer PLACE that his patience had run out and "it's time."

"We saw in this project the opportunity to really have something unique and special," Spano said. "We need to see that which is unique and special done, because we got folks who need to live in it."

The $88.4 million mixed-use project called Via Sol is nearly 80% complete. The five-story apartment complex will offer 152 affordable units and 65 market-rate units.

Construction has faced setbacks and delays caused mainly by the COVID-19 pandemic and financing issues, said PLACE Executive Director Chris Velasco. Nonprofit development is complicated, he said, and paired with affordable housing — which is expensive and heavily regulated — it's been a recipe for delay and massive cost hikes.

"Public benefit projects are very, very difficult to do by definition. They take longer and they experience more challenges than traditional, conventional projects," Velasco said. "Exceptional projects are exceptionally difficult."

PLACE is required to wrap up construction by September, but Velasco said he hoped Via Sol will be able to welcome tenants this summer.

The latest extension gives PLACE until June 2023 to complete the "E-Generation facility," an adjacent 10,200-square-foot vertical greenhouse and green energy space intended for urban agriculture. The solar-powered facility will compost food waste on site for organic produce to be grown and sold at Via Sol.

The nearly 4-acre site includes an urban forest with a children's play area and public art. Velasco said space formerly intended for a retail and bike repair shop will instead be used to sell the organic food grown there.

The housing community sits next to the Cedar Lake Trail and the future Southwest line, making it possible to live at Via Sol without owning a car, Velasco said.

Developers entered into a contract with the city in 2017, but Via Sol didn't break ground until January 2020. Ambitions were even higher for the site in the beginning.

PLACE planned a six-story hotel with 110 rooms and another mixed-use building with 81 units and a café, but the $55 million addition on the south end of the property was mutually terminated by the developer and the city in 2019.

St. Louis Park plans to work with another developer on that part of the site to provide more affordable housing along the future Southwest line, which has also been delayed. Spano said he joked with people that light-rail service would be available by the end of his first mayoral term in 2020. Now, he said, the city will have it by 2028, the end of what he hopes will be his third term.

Spano said he remains a supporter of Via Sol and that PLACE isn't a large developer with deep pockets that can bankroll the project.

"It's the first time that I know of that we have undertaken something as big as this with a nonprofit developer," he said.

PLACE this week finalized all remaining financing for the project, after recently securing an additional $10 million in bonds. The City Council in 2018 approved roughly $3.4 million for PLACE in tax-increment financing (TIF), which will be generated by the completed project and paid for through the developer's biannual property tax payments.

No general fund dollars from the city were committed to the development, but the Economic Development Authority allowed PLACE to pay for a portion of its land purchase over a 10-year period. City officials said PLACE has made regular monthly payments on the deferred loan.

Despite the setbacks, Velasco said the waitlist for people wanting to live at Via Sol is growing.

"While it might not be everybody's cup of tea, for the people who want to live in a place like this and have their own organic food grown right on site and 100% renewable energy, there's no place like that," he said. "So I think we're really fulfilling a dream for a lot of people that are looking for a community like this."