MINNEAPOLIS Dale Joel is hoping that a workforce housing development will be just the beginning of a massive mixed-use, transit-oriented development that will transform a south Minneapolis neighborhood.

The developer grew up in the city’s Longfellow section in the 1950s and ’60s, when there was a corner store every block or two. But housing units have since filled the retail spaces, sending residents far off for basic necessities.

“This area of town is the most underserved retail in the Twin Cities,” said Joel, principal of development firm Capital Growth Real Estate, based in St. Paul. “Many people drive outside of their neighborhood now, and in some cases outside of the city of Minneapolis, to do their shopping.”

Capital Growth Real Estate is looking to transform the neighborhood into a walkable, mixed-use, transportation-oriented community. Joel first hatched the plan for Longfellow Station, a 22-acre redevelopment, when the Hiawatha lightrail line opened in the neighborhood in late 2004. The rail line runs along a series of abandoned grain elevators associated with an abandoned Purina Mill site.

Capital Growth’s grand vision is to replace four city blocks surrounding the Purina site and light-rail line with a mix of more than 2,000 housing units and several hundred thousand square feet of commercial/ retail space.

The first phase of the development will replace the old Purina Mill site at 38th Street and Hiawatha with 198 units of workforce housing split between two 99- unit mid-rise buildings. Forty of the units will target those earning up to 50 percent of the area median income (AMI), another 80 will be earmarked for those earning up to 80 percent of the AMI, and the remaining units will be market-rate.

Joel expects environmental remediation work to begin in October on the first phase. But before his overall vision of a transformed neighborhood can be realized, he and a local community group must complete a community benefits agreement (CBA) they’ve been working on for more than 18 months.

Community benefits agreement

A CBA is a legally binding contract between community groups and developers. The first CBA was created in 2001 for a massive redevelopment project around the Staples Center in Los Angeles, but this would mark the first such agreement between a private developer and a community organization in the Twin Cities.

The concept is designed to be a winwin: The developer agrees to shape the development in certain communityfriendly ways, and in turn the community agrees to support the project before government bodies providing permits and subsidies.

The draft Longfellow Station CBA stipulates that at least 30 percent, but not more than 60 percent, of the overall units must be affordable. Of those affordable units, 20 percent must target those earning up to 50 percent of the AMI, and the remainder must target those earning up to 60 percent of the AMI. What’s more, “affordable rental units shall remain affordable for a minimum of 30 years,” the agreement reads.

Other provisions include obtaining green building certification; keeping out “big box” retailers by limiting commercial/ retail tenant space to 30,000 square feet or less; and limiting the number of national franchises or chains to 70 percent or less of the total retail/commercial space, with 30 percent or more of that space going to local businesses.

The developer must also reserve at least 10 percent of the development’s total commercial/retail space for communitybased small businesses with preference given for those owned by ethnic minorities and women, among other provisions.

Local support

The first phase of Longfellow Station will cost about $35.7 million to develop, and almost a quarter of the financing will come through local government support. Capital Growth hopes to start demolition of the site’s existing grain elevators by the end of this year.

The city of Minneapolis is providing $2.7 million through its Housing Trust Fund; the Minnesota Housing Finance Agency is providing $2 million in gap funding; and the Metropolitan Council is providing around $2.1 million through its Livable Communities Demonstration Account, Tax Base Revitalization Account, and for environmental remediation. Hennepin County also is kicking in more than $1.2 million through a variety of funds.

Additionally, Capital Growth expects to net more than $5.7 million through 4 percent low-income housing tax credits, and the company is putting up more than $1.5 million of its own equity to help the project along.