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HUD boosts Minn. mixed-use project

By Brian Johnson
Dolan Media Newswires

Minneapolis (AP) — The Frogtown Square mixed-used project in St. Paul has taken a big leap forward.

Construction crews have begun moving dirt on a $13 million project that will bring 50 affordable senior apartments and a variety of retail offerings to the northeast corner of University Avenue and Dale Street.

The project, scheduled for completion in December, will cater to neighborhood-based retail businesses, such as a barbershop, a coffee shop, a grocery store and a restaurant with outdoor seating, according to general contractor Benson Orth Associates.

An official groundbreaking took place in late 2009, but the development team — led by Episcopal Homes and a neighborhood partnership called NEDU — recently closed on its U.S. Housing and Urban Development financing.

The project has additional sources of money, including the city of St. Paul and the Metropolitan Council, but the HUD money was all-important.

Tom Madsen, director of business development for Benson Orth, said some site prep-type work took place in December, but the project team had to wait for HUD approval before moving ahead with construction.

“The city had wanted to have an actual groundbreaking so the people could see that something was going to happen at that location,” said Madsen, whose firm is teaming with Meyer Contracting on the project. “It has been a long time coming in that neighborhood.”

Frogtown Square is the culmination of an effort that began about 15 years ago, when the four neighborhood groups that make up NEDU — Model Cities, Neighborhood Development Center, Greater Frogtown CDC and Aurora St. Anthony Neighborhood Development Center — began brainstorming plans to breathe life into the intersection.

“It really started getting into high gear about three years ago, when we finalized the concept and started securing funding,” said Ponterre Group consultant Becky Landon, the project manager working on behalf of NEDU.

The developers wanted to secure tax-exempt bonds and low-income tax credits for the project. After the market for those sources of money dropped, the developers turned to HUD, which is providing about $7 million.

“If we had not gotten the HUD funding, I don’t know what would have happened with the project,” Landon said.

Meanwhile, the retail component of the project has been shrinking, a reflection of the poor economy. The current plans envision 11,000 square feet of retail, down from earlier proposals of 23,000 and 20,000. The developers wanted to bring a Walgreens store to the property, but those negotiations broke down.

On the plus side, the project will rise up in the shadow of the soon-to-be-built Central Corridor light rail line, which is getting set for the start of heavy construction. The developers want the $957 million transit project to boost business at Frogtown Square.

Still, Frogtown remains an economically distressed neighborhood that has seen its share of crime. But Landon said she is confident that won’t be a big problem. She said the retail is targeted to businesses owned by people from the neighborhood — people familiar with an urban setting.

“They are not intimidated by that,” she said. “It is a higher-crime section of St. Paul. We hope this development will have a domino effect on other positive development in Frogtown.”

She said the project team won’t have trouble filling the senior housing.

“We think it will be full on the day it opens,” she said.

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