– Finance & Commerce
Developer Alatus LLC, known for the luxury condo and apartment towers it builds, has ventured into unexpected territory — north Minneapolis.
In a neighborhood along Humboldt Avenue North, Alatus LLC is building single-family homes, a far cry from The Carlyle condominiums and Latitude 45 luxury apartments it built downtown.
Through its MyHomeSource subsidiary, Alatus has been building homes on 65 vacant lots on Humboldt Lane, Girard Avenue North and 50th Avenue North since 2015. The development, Parkside at Humboldt Greenway, is drawing attention in a tight housing market.
Since January, Alatus has put eight lots under contract for home construction for prices ranging from $300,000 to $375,000. Homes already built stand out from nearby older real estate. Painted in bright earth tones, blues, greens and reds, the two-story, three-bedroom houses look as though they were plucked from the suburbs. An excavator and dump trucks were at work this week preparing lots for four more homes that will soon rise.
Alatus is building the homes in partnership with the Greater Metropolitan Housing Corp., a nonprofit that has been renovating and building affordable housing for over 40 years. Parkside is a departure for the group because the homes are selling at market prices, said Carolyn Olson, the group’s president. The idea behind Parkside is to build economic diversity in north Minneapolis by drawing new residents with higher incomes.
That idea is proving to be a good one, Olson said.
“A lot of people thought we’d never sell them for those prices, and a lot of people thought we wouldn’t sell them, period,” she said in an interview.
The lots opened up in the early 2000s when Hennepin County bought out the owners of more than 200 post-World War II, slab-on-grade homes, said Mark Stenglein, a former Hennepin County commissioner and Alatus’ government relations director. The county razed the homes, then turned the lots over to Minneapolis for redevelopment.
RFM Group, a Minneapolis housing developer, built about 150 homes there, but lost the Parkside lots to foreclosure during the Great Recession, Stenglein said. The city got the lots back, then issued an RFP for new single-family construction. Alatus and Greater Metropolitan Housing Corp. won the RFP process in 2015 and agreed to build on all 65 lots, Olson said.
Six of the new homes are now occupied, Stenglein said. Alatus has sold 14 and has another six under contract.
The homes are anything but bare bones. The four models offered come with durable concrete fiberboard siding instead of vinyl, and are sheathed with plywood, an upgrade from oriented strand board. Inside, kitchens feature granite countertops and soft-close drawers and cabinet doors, and floors are covered in engineered hardwood. Ceiling heights are 9 feet on the main floor.
Floorplans range from 1,686 square feet to 1,975.
The extra features and robust construction were specified to make sure the homes had appeal in a part of Minneapolis that has been characterized by aging housing stock and low incomes, said Nick Reimler, construction manager for MyHomeSource.
“We actually thought we would be challenged by the location, so we wanted to do something to differentiate us,” he said in an interview. “We knew getting up to this $300,000 price point would be a challenge.”
Area amenities are a plus for Parkside, Stenglein said. Jenny Lind Elementary School and Olson Middle School are within walking distance, and the Creekview Recreation Center is across the street from homes fronting on Humboldt Avenue. Victory Memorial Parkway and bike trails are four blocks south.
Stenglein said he expects the area to draw families with higher incomes and to attract commercial development. The median household income in north Minneapolis was $31,798 in 2014, compared with $66,091 for the Twin Cities area, according to a north Minneapolis workforce report.
“If you think about it, there isn’t a Starbucks to go to up there,” Stenglein said in an interview. “There will be, because those people will have the money to go buy Starbucks.”
The single-family market isn’t entirely new to Alatus. MyHomeSource renovated about 500 foreclosed homes in Minneapolis and nearby suburbs during and after the recession. Those homes were sold as affordable housing.
At an event at the University of St. Thomas this week, Alatus principal Bob Lux called Parkside a “philanthropic” project that he doesn’t expect to earn a profit. The company is buying the lots for $5,000 to $10,000 each and is making profits of a few thousand dollars per unit, Stenglein said. Alatus splits the profits with Greater Metropolitan Housing Corp.
Parkside is currently in its first phase. The second will start later this year, Reimler said. The final phase is expected to finish in 2019.
By: Matt Johnson
Date: March 31, 2017
View original article and images here.