By Jeffrey Steele
Minneapolis-based apartment developer Dominium is breaking ground this month on Legends of Woodbury in Woodbury, Minn., a St. Paul suburb. The 216-unit development will serve as a senior affordable housing community.
Legends of Woodbury will feature a pair of apartment buildings with a central, two-story clubhouse linking the two. The clubhouse will feature an expansive community room and kitchen, fitness center, pub and card room, three-season porch, theater, arts and crafts studio, library and a beauty salon. Outside, the community will offer common area amenities to include a patio, courtyard, grilling space and more.
As well, Legends of Woodbury will connect to a municipal walking and bicycling trail, with about two acres for the trail and corresponding green space.
What led Dominium to feel this was a good development opportunity? “Location was one of the main factors,” Dominium vice president and project partner Owen Metz told MHN. “The site is situated just off the highway and [near] one of Woodbury’s main retail areas, providing convenience and accessibility. Additionally, Woodbury has a growing senior population that has not seen an equal increase in senior housing.
“Since this is a tax credit deal, a typical return is not applicable. We sell the tax credits issued by the county to a tax credit investor who becomes the 99 percent owner of the project for 10 to 15 years. In exchange, Dominium receives equity upfront to put toward construction costs and acts as the long-term owner and property manager.”
The project’s financial partners are the city of Woodbury HRA; Washington County CDA; and U.S. Bank and Barings. Assisting with the project are third-party professionals including architect BKV, general contractor Eagle Building Company, surveying and engineering provider Loucks; appraiser Integra Realty Resources, environmental relations company Braun Intertec Corporation; geotech engineering firm Northern Technologies; market study firm Novogradac & Company, Woodbury mayor Mary Giuliani Stephens and the staff of the city of Woodbury.
Deferred developer fee
Among the project’s most daunting challenges was the site’s narrow shape, which offers scant exposure to the street. “This limited our potential design ideas,” Metz said.
“We worked through the selling broker to settle on a selling price of just over $3 million.
“There are challenges with any tax credit project due to the capped rents, and this project was no exception. One specific challenge was the change in tax credit pricing over the course of closing the deal due to the 2016 election. We had to work closely with our equity investor to get comfortable on both sides and ended up deferring the majority of our developer fee to get more equity upfront and get the deal to pencil out.”
Construction on Legends of Woodbury is slated for completion in May 2019.