– Finance & Commerce
Luxury apartments that developer Alatus LLC wants to build at an aging Columbia Heights office property might even lure city officials to buy space on the building’s first floor for a new City Hall.
The city approved a preliminary development agreement with Minneapolis-based Alatus on Monday for the city-owned property at 3989 Central Ave. NE. The 2.28-acre site is in the southeast quadrant of Central Avenue Northeast and 40th Avenue Northeast.
The city’s Economic Development Authority purchased the property, known as the Northeast Business Center, for $2.8 million, according to a certificate of real estate value that became public this week. The seller, Minneapolis-based Swervo Development, had purchased the then near-empty 94,129-square-foot office building in 2015 for $2.2 million with the intention to renovate and lease it to tenants. The latest sale closed on July 31.
Alatus is proposing a six-story building that would include 200 to 270 luxury apartments, a 20,000-square-foot space for Columbia Heights City Hall, about 3,000 square feet of retail space, underground parking, an amenity deck with a pool and a workout facility.
The redevelopment proposal is not the first for the site. Earlier this year, the EDA took a pass on a redevelopment proposal from Swervo and Minneapolis-based Lupe Development that would have put 83 workforce apartments and ground floor retail and commercial space onto the site, said Aaron Chirpich, the city’s community development director. Financing for the project would have come from low-income tax credits and tax increment financing through the city.
“It was a proposal they weren’t interested in,” Chirpich said in a Thursday interview.
The Alatus design grew out of a developer roundtable the city held in 2018 to come up with concepts to replace the Northeast Business Center. Alatus included the space of a City Hall in its design, knowing the city has been looking to replace its current building at 590 40th Ave. NE for about two years, Chirpich said. City Hall is about seven blocks west of the Northeast Business Center.
The city is still considering several other properties it owns for a City Hall building, he said. But Alatus proposal has city officials interested.
“We’re vetting that right now,” Chirpich said.
Alatus did not immediately respond Thursday to a request to comment on the Columbia Heights proposal. The company has been busy with a number of projects in the Twin Cities and Rochester. Alatus’ most recent proposal is a 226-unit mixed-use apartment building at 411 and 417 Lexington Parkway North in St. Paul. The site is owned by the Amherst H. Wilder Foundation.
Alatus is also developing a 40-story condominium tower at 200 Central Ave. SE in Minneapolis, and a 31-story, 357-unit apartment tower at 228 12th St. S.
Under the terms of the Columbia Heights preliminary development agreement, the city and Alatus will work toward a final agreement that would have Alatus buying and redeveloping the Northeast Business Center property.
If built, Alatus’ apartments would add to a 1,947-unit inventory of apartments in the Columbia Heights-Fridley submarket, according to the Apartment Trends report from Minneapolis-based Marquette Advisors. The apartment vacancy rate in the submarket is 2.3%.
By: Matt Johnson
Date: Aug 8, 2019
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