The planned 36-unit Lofts on Arts Avenue condos in Stevens Square may be in trouble following a withering rebuke by City Councilmember Lisa Goodman (7th Ward).
Goodman, who declined to be interviewed for this story, publicly blasted the project during a July 29 council committee meeting, citing the project’s lack of affordable units and nearly $500,000 taxpayer subsidy.
Goodman’s Minneapolis Community Development Agency Operating Committee voted to have staffers compile more financial analysis. The committee will reconsider the issue Friday, Aug. 12.
"I’m willing to give them one more chance," Goodman said. "But I am not willing for the city to subsidize this project to the extent that we’re subsidizing it. It makes absolutely no sense to me. It’s not in line with the city’s goals at all."
The late debate comes after 70 percent of the proposed units have been pre-sold, according to Stevens Square Community Organization Executive Director Doug Kress.
MCDA Project Coordinator Jerry LePage said the project was supposed to begin construction this fall, though that now may be in jeopardy.
The city requires at least 20 percent of units in city-subsidized projects be affordable to residents who make 50 percent of the metro median income. Currently, that’s $38,000 for a family of four.
Seven of 36 condos are being sold according to that standard, LePage said, so the project complies with city policy.
However, Goodman asked why 17 units being offered to people making 80-115 percent of the metro median income aren’t available to those making 30 percent of the median.
Councilmember Dean Zimmermann (6th Ward), whose represents Stevens Square, echoed Goodman. "People who earn [80-115 percent] don’t need our help," he said.
However, LePage said that the condos are being sold to higher-income earners to qualify for Minnesota Housing Finance Agency grants that spur housing for middle-income people.
MHFA is contributing $425,000 for the Lofts project. "So if, indeed we restructured the financing here, we’d put the MHFA funding at risk," said MCDA Interim Director Chuck Lutz.
The Stevens Square neighborhood, which has many low-income residents and renters, has sought more middle-class home-ownership opportunities.
Another controversy is the city’s write-offs, which amount to $601,800, according to Lutz. The figure accounts for a land swap needed for the project, payments to SCA and tenant relocation monies. Goodman said this was a "subsidy" equaling $17,000 per Lofts unit.
"Why are we paying that?" asked Zimmermann, who said that until July 29, he didn’t know what the project would cost the city. "Why isn’t Brighton picking up all these costs?"
At the meeting, Goodman signaled a willingness to mothball the project
"If this does not get resolved, maybe we just hang onto the plan and see who comes forward at a later date," said Goodman.
Asked if he thought the whole project is now in danger of falling through, Zimmermann said he’s not sure. "It’s conceivable," he said.