MINNEAPOLIS - On a small site along 10th Avenue in Minneapolis, adjacent to one of the largest redevelopment efforts in the city’s history, sits the Midtown Exchange Condos on the Greenway.

The historic Sears and Roebuck building across the street, a tower rising above midtown Minneapolis, underwent redevelopment over the last three years, re-emerging in 2006 as the Midtown Exchange.

When that project’s lead developer asked local nonprofit Project for Pride in Living (PPL) to construct some affordable homeownership units, it presented a unique design challenge: Building a small condo development on the same site as a massive parking garage and still making it feel like a home.

As a condition of development, the 22,000 square-foot site, which was once a surface parking lot, had to provide about 1,200 parking stalls in addition to the homeownership units. The solution? Wrap the condos around the parking garage, thereby creating a neighborhood feel while providing the requisite parking spaces.

A wood frame was built tight against a concrete wall, five stories high. The wrap-around masked the parking structure, while also allowing the developers to face many of the units toward the Greenway, a bike/pedestrian path that spans the entire city.

The 57-unit development faced several financing difficulties. The constraints on the sale prices of the affordable units, the soft “market values” of a neighborhood still under development, and the cost of the parking structure (at $19,000 per stall) had to be overcome.

“It really took city, county, state public funds, and private philanthropic funding to pull the whole thing off,” said Mary Novak, PPL’s project manager on the development. “There’s just every level of funding imaginable in this project.”

The developer approached two nonprofits to help construct the income-targeted units. Twin Cities Habitat for Humanity took the lead on two one-bedroom units targeting residents earning up to 50 percent of the AMI. The City of Lakes Community Land Trust (CLCLT), a local nonprofit, helped construct 10 other income-targeted units, eight for those earning up to 50 percent of the AMI, and two for those earning up to 60 percent of the AMI.

Habitat and CLCLT strayed from their business models to make the deal work. Habitat, which usually builds from the ground up, was brought in after the shell was constructed. “We provided the envelope and they could then frame out the rooms how they wanted,” said Novak. “It was definitely a lot different than what they’re used to.”

The same applied to CLCLT, which mostly deals in land for single-family homes. The organization had done only one other condo development in the past, and modified its approach to help the project through completion. “They had to create new documents on how the land trust would work for a condo building,” said Novak. “They created a housing subsidy covenant and that helped secure the land trust structure.” PPL constructed the remaining two income-targeted units.

The city of Minneapolis set aside nearly $875,000 for the project from its Affordable Housing Ownership and Empowerment Zone programs; the state pitched in $500,000 through its housing finance agency and Family Housing Fund; and a $600,000 grant arrived from the region’s Livable Communities Grant Program. Lead developer, The Ryan Cos., donated land worth about $220,000. An $8 million construction loan was secured from Franklin National Bank of Minneapolis.

The project was completed Nov. 30, 2006, and as of press time, 37 of the 57 units, including all 16 of the income-targeted units, have been sold.

Additional project information, as provided in application by the nominator.

Q. Why does the nominated project deserve to be recognized based on the award criteria of this contest?

A. On a compact site adjacent to the largest-scale redevelopment project in the state, and just one block off the high-traffic Lake Street, the Midtown Exchange Condos on the Greenway help to establish the stability that the surrounding at-risk Midtown neighborhood of Minneapolis, Minn., will need to grow and thrive. This high-quality affordable housing development has successfully met multiple development, design, and funding challenges.

When the historic Sears & Roebuck building was being redeveloped, the monolithic tower would not only need a creative solution to help smooth the transition between its massive size and bustling commercial hub and its surrounding residential neighborhood, but would also require more parking for visitors and tenants. The design of the Midtown Condos offers an efficient and affordable solution. The design team decided to wrap the condos around the required 1,000-stall parking structure hugging the traffic into an interior corridor of the larger development. This also allows the condos to look out over a peaceful bike path and the small-scale residential properties nearby.

Nonprofit developer Project for Pride in Living obtained a wide array of subsidies from many sources, so sales prices are kept low. In addition to a mixture of local private sources and government-allocated funds from the state and local levels, the city itself was excited enough about reinvesting in the neighborhood that it set aside $875,000 for the project.

Apart from the breadth of financial assistance it has received, Midtown Condos have also received exuberant neighborhood support. Many residents are first-time homebuyers and longtime tenants of the surrounding neighborhood. They and others appreciate the quiet residential experience alongside the condos, the shielded parking, and the nearby amenities of the bike path, transportation hub, and market just a walk away. In addition, the project was recently honored with the Best Real Estate Awards in the Community Impact category by the local chapter of the Business Journal.

The low-income urban environment of Midtown Condos will require stability to allow the momentum of the massive revitalization of the Sears Tower to spread and be maintained. While in the past few decades, parts of the area have experienced elevated levels of crime and vagrancy when businesses withdrew their investments, the future character of Midtown may also be threatened by the potential for urban gentrification, and by the rising costs of homeownership for local residents—property values in the neighborhood have increased 183 percent since 1998. Midtwon Condos contribute high-quality affordable homes in an area where many did not previously exist. As a direct response to the activity that the streetscape experienced in the past, the condo association allocates a high percentage of monthly dues to security services, meant to keep the area safe for residents. And as many of the new homeowners come directly from the surrounding community, the neighborhood’s original fabric and character are kept intact.

Q. How does this project represent an innovative solution to a specific development challenge?

A. The first and most significant challenge was to design housing that would be not only attractive to the for-sale housing market, but that could also shield a 1,000-stall parking garage. UrbanWorks and Project for Pride in Living worked with the developer and architects of the overall Midtown project to arrive at the selected solution: a wood-frame building tight to a sheer pre-cast concrete wall five stories high. The design carefully shields the ramp while providing a classic residential exterior. This form of “wrap” or “liner housing” is not common in Minnesota, but has many precedents in other cities where developers are unable to build underground parking. The resulting building effectively hides the parking structure while creating lovely residential streets—one fronting on the Greenway, and one facing single-family homes.