Sep. 8—Nearly six years after discussions began, a large residential development that includes affordable living apartments is underway.
"It was not an easy road," Mayor Najwa Massad said Thursday during a groundbreaking near Cub Foods downtown. "This definitely took a village to make happen," she said of the effort involving private developers and banks, along with city, county and state agencies.
Sinclair Flats, a 48-unit apartment complex, is the first part of a $28.1 million mixed redevelopment project. The apartment will have 38 affordable units and 10 market rate apartments.
Brian Sweeney, development director of Cohen-Esrey Group, based in Kansas and with an office in Stillwater, said he began talks with the city in 2016.
"I said we want to work in Mankato with this city that values affordable housing so much."
With federal tax credits aggressively sought by cities across the country, Sweeney noted getting affordable housing projects off the ground is difficult.
"Life is tough. Development is tough. Affordable development is really, really tough," he said.
Kristin Nemmers of PNC Financial Services, which is helping with the financing package, said PNC is the second largest equity provider for affordable housing in the country. "We provided $1.5 billion in equity for affordable housing last year."
Sweeney said the $16.77 million Sinclair Flats building is slated to open next fall.
Another nearby complex, Lewis Lofts, will add 64 lofts for seniors, with a project cost of more than $11 million. Ten townhomes are also planned at the site, which is across the street from the Children's Museum and the Cub parking lot.
With rising construction costs, the City Council this spring authorized an added $500,000 on top of previously promised subsidies. The council had earlier promised a $100,000 grant and a $400,000 forgivable loan from its revolving economic development loan fund.
The site of the entire housing project, which is the former city public works garage, was sold to Cohen-Esrey for $250,000.
Because 102 of the 121 total units will be set aside for residents with incomes no higher than 60% of the average income in Blue Earth County, the project is set to receive a large and varied mix of federal, state and local subsidies.
The biggest piece of the project's financing remains the federal tax credit, which will provide equity of $14.6 million. State Housing Infrastructure Bonds will add another $5.5 million. Cohen-Esrey's private mortgage will contribute more than $2.4 million. State economic development grants are expected to total nearly $585,000.
The federal and state dollars were awarded to the Mankato project following a competitive process involving proposals from around Minnesota.