Construction on the third and final building of the Fridley Station Village project is expected to start this month and will provide affordable housing options.
On Nov. 23, the Fridley City Council approved conduit bonds to finance a multifamily housing project at the Fridley Station Village development just east the Northstar Commuter Rail line by the intersection of Main Street Northeast and 61st Avenue Northeast.
The Fridley Station Village project, which is being spearheaded by Minneapolis-based real estate developer Sherman Associates, consists of three apartment buildings with nearly 300 new apartments for a range of incomes.
Construction on Fridley Station Village started in 2017. The first building, which is market rate apartments, is nearly finished and will open this month, while the second building is more than half complete and will open as senior housing in April. The third building is slated to begin construction this month. It will be a 73-unit, mixed income apartment building.
Sherman Associates representative Dillon O’Brien was not present at the Nov. 23 meeting but provided Fridley Finance Director Dan Tienter with a written statement, which he read to the City Council.
“In July we were awarded a bonding allocation by the Minnesota Housing Finance Agency and approval of those bonds is before you today,” the statement said. “The bond financing enables this third building to provide affordable housing options as part of the overall project at Station Village. The financing tools allow us to cap the rents so that they’re affordable to families at 60% of area median income. Our history in constructing and managing of market rate and affordable housing stretches back 40 years.”
The building will have two- and three-bedroom options for families, as well as a club room, fitness room, laundry and outdoor play structures, according to the statement.
In 2019 Fridley received a request from Sherman Associates to issue up to $19.7 million of conduit bonds for property acquisition and construction of a 73-unit building consisting of low- to moderate-income housing, according to Tienter.
On July 22, 2019, the City Council provided preliminary approval for the Fridley Station Village project and authorized City Manager Wally Wysopal to call for a public hearing.
Following four attempts Fridley received a tax-exempt bonding allocation from the state of Minnesota, Tienter said.
On Nov. 6 Wysopal called for a public hearing to consider the issuance and sale of a multifamily housing revenue note of up to $10.6 million.
“The difference here has to do with the evolution of the project, but also the amount of tax-exempt allocation that the city received for the bonding,” Tienter said, in reference to the revenue note dropping from $19.7 million to $10.6 million.
Tienter emphasized that the multifamily housing revenue note arrangement does not constitute a debt for the city of Fridley, which has no financial obligation to it. “The city issues a note and the borrower (Sherman Associates) makes payments directly to the lender (Cedar Rapids Bank and Trust),” he said.
The public hearing was held Nov. 23, but no one spoke.
This month, the multifamily housing revenue note closed. Funds were then transferred, allowing for construction of the third apartment building.