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Historic Millworks Lofts fills to capacity in a month

Posted on 25 September 2017 by calvin

1920s-era shed and brick building made into affordable lofts featuring original woodwork and geothermal system

By TESHA M. CHRISTENSEN
Saying Nick Andersen has been involved in the Millworks Lofts project along Hiawatha Ave. since the beginning is almost an understatement.

Before working as a developer with the Plymouth-based Dominium, Inc., Andersen eyed the property at 4041 Hiawatha Ave. S. for a school project. He was enrolled in the real estate graduate program at the University of St. Thomas, and the former 1920s-era Lake Street Sash and Door Company complex was part of a case study associated with the 2007 University Real Estate Challenge.

Together with a team of students, Andersen envisioned remaking the historic millwork into a site with affordable housing and retail.

Eight years after graduation, Andersen was employed full-time by Dominium when he got a call from a fellow St. Thomas student. “Remember that project we worked on?” Mike Doyle asked Andersen. “I think you should look at it as an apartment conversion project.” His uncles, Kevin and Dennis Doyle, the property owners, were interested in selling.

Andersen revisited the project and pitched it to fellow Dominium employees.

This time the primary focus was on affordable housing. The retail component was nixed in part because of the difficulty accessing the site from the southbound lane of Hiawatha; drivers would have to make a u-turn at 42nd St. and head back north for a block.

Others had envisioned housing at the site, but they wanted to tear down the historic shed and brick building and start fresh.

DCIM100MEDIADJI_0039.JPGAndersen saw the potential for using what was there, showcasing the timber posts and beams present in the old factory in new loft-style apartments with high ceilings and polished concrete floors.

Photo right: Nick Andersen and Eric Omdahl of Dominium look over the interior posts and beams that feature prominently in this historic project. (Photo submitted)

The original windows in the peaks of the shed bring in light once more. Plus, the metal sheeting added in 1986 was removed to let the historic clapboard show.

“It’s a really cool project where we took a blighted area and transformed it,” said Andersen, “at the same time providing 78 affordable housing units to the community that are desperately needed.”

Exterior ConstructionPhoto left: To restore the buildings to their historic look, paint was removed from the bricks on the northern building. On the southern side, metal sheeting was removed to showcase the original clapboard siding. The project was funded in part by historic preservation grants. (Photo submitted)

“This development checks a lot of boxes: affordable workforce housing, historic preservation, transit-oriented, even geothermal heating—not to mention the units are beautiful, and there are plenty of amenities for residents,” observed Ward 12 Council Member Andrew Johnson.

He loves driving past the lighted Millworks at night. “The way the sheds turned out (in particular) exceeded my expectations,” stated Johnson. “It’s great to see buildings along this historically industrial and mill-based corridor being reused in a way that helps address our affordable housing needs.”

Housing that’s affordable
While there are many new build­ings being built in Minneapolis, those luxury apartments are going for between $2 to $3 a square foot, adding up to $1,600-$2,200 a month for a unit the size of one in Millworks Lofts.

With the rent restrictions in place at Millworks, the lofts range from between $1,000-$1,200 a month.

“There is an overwhelming demand for affordably priced rental housing in Minneapolis right now,” observed Andersen.

As a participant in the affordable housing program, total household income must be under certain limits based on household size: one occupant: $37,980; two occupants: $43,440; three occupants: $48,840; and four occupants: $54,240.

Unique geothermal system
Another unique component of the building is that it uses a geothermal heating and cooling system. While many city lots are too small for such a system, this one had a parking lot in back that offered enough space to bury 96 vertical geothermal wells 225 feet deep.

The system is 20 percent more efficient than a traditional natural gas heating system. The coils pull heat out in the winter and cold in the summer. A boiler connects to vents that push the hot and cold air into apartments so no natural gas heaters are used in the building at all.

“It’s a very green renewable source for heating and cooling,” pointed out Andersen.

Complicated beginning
A deal between the Doyle brothers and Dominium was struck in January 2015, but it took another year and a half before the purchase was official. In the meantime, Dominium lined up necessary city approvals and obtained financing.

The project required some zoning permit changes as it was in an industrial area. However, because of its proximity to light rail, the city’s plans for the corridor include high-density housing and this use fit within that.

The trickier piece was pulling together financing, and they had to work with a number of different agencies.

Because the project preserves the historic integrity of the buildings, Dominium worked with the State Historic Preservation Office, as well as the National Parks Service (which handles historic buildings on a national level), to get project approval and tax credits.

The project was also financed in part by the Affordable Housing Tax Credit program. Dominium received tax-exempt bonds from Hennepin County and funding from the city of Minneapolis.
With the incorporation of geothermal heating and cooling, the project qualified for environmental grants from Hennepin County and the Met Council.

U.S. Bank signed on as an investor.

Everything was finally in place for an April 2016 purchase and construction began a few months later in August.

Past Dominium projects include the $125 million redevelopment of the once-neglected Schmidt Brewery in St. Paul into apartments for artists to live and work, and the $156 million conversion of the fabled Pillsbury A Mill complex of buildings into the 251-unit A Mill Artist Lofts. Other similar adaptive historic reuse projects have been completed in St. Louis, Mo.

Just what he envisioned
The finished product is exactly what Andersen had envisioned.

Loft features include private patio/balconies, washers and dryers in every unit, large walk-in closets, kitchen bars/islands, stainless steel appliances and quartz countertops.

IMG_9324MillworksFrontShedSmPhoto right: Once home to Lake Street Sash and Door Company, this brick building and adjacent shed now offer 78 affordable housing units, courtesy of a project completed by the Plymouth-based Dominium, Inc. The project wrapped up in July 2016, and renters began moving in during August. A month later, 100 percent of the lofts had been rented out. Residents come from within a few miles of the site, drawn in by a banner on the building, flyers at local businesses, handouts at the light rail station at 38th, and word of mouth. (Photo by Tesha M. Christensen)

The southern shed where Lake Street Sash and Door used to store its windows and doors has been remade. The space now houses a spacious community room, fitness room, yoga studio, and leasing office. The shed has also been divided up to offer 20 indoor parking spaces, a bike storage area, and individual storage lockers.

A smaller community room and patio sit on top of the three-story brick building.

With any renovation project, there are unforeseen challenges that arise. During the time-intense and costly process of removing the paint from the exterior brick to return to the look of the original raw brick, the contractor realized that the brick was very porous and absorbed a lot of water. A spray-on brick sealant product to keep moisture out was required.

When the roof repair began on the shed, contractors discovered that more repair was needed than initially thought.

10 - LobbyPhoto left: The interior of Millworks Lofts showcases the timber posts and beams from the old factory along with high ceilings and polished concrete floors. Loft features include private patio/balconies, washers and dryers in every unit, large walk-in closets, kitchen bars/islands, stainless steel appliances and quartz countertops. The southern shed where Lake Street Sash and Door used to store its windows and doors now houses a spacious community room, fitness room, yoga studio, leasing office, 20 indoor parking spaces, a bike storage area, individual storage lockers, and two apartments. (Photo submitted)

As the metal siding was stripped off to showcase the original cedar siding, contractors ran into parts that were not salvageable and had to be replaced instead. They also realized that without the metal sheeting, the structure itself might not be sturdy enough to withstand a strong windstorm, and so steel reinforcements were added to the big timber beams.

Work on Millworks Lofts was completed in July 2017, about one year after it began.

Renters started moving into Millworks Lofts in August, and by Sept. 1, the complex had reached 100% capacity.

The speed at which the lofts were filled surprised and delighted developers.

Andersen credits it to a pent-up demand for affordable rental housing in Minneapolis.

The residents at Millworks Lofts came from within a few miles of the complex, courtesy of the neighborhood outreach Dominium focused on and word of mouth. To promote the lofts, a sign was put up on the building itself. Dominium also handed out flyers and marketing materials at local businesses and the light rail station a couple blocks north at 38th.

A win-win for everybody
“I think this project was a win-win for everybody,” said Andersen. “We’re proud to be associated with it and really proud of the outcome.”

The neighborhoods in Ward 12 have historically been affordable and a great place for individuals and families to live—whether they were buying a starter home or renting, pointed out Johnson. However, the neighborhood is increasingly becoming unaffordable as the market heats up amid strong demand.

“On one hand it’s a great thing that so many people want to live here, but on the other, we face the risks of seeing existing residents displaced, those with less income denied the opportunity to move here, and a fundamental characteristic of our community lost. It’s a big challenge faced across the city, the metro, and even the nation: how do we grow in an inclusive way as more and more people move to urban areas?
“Projects like this help. This adds more supply in the face of growing demand, opens the door for a broader range of incomes, and preserves the built history of our community’s past.”

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