When a developer wanted to take away affordable housing, community members stepped up to save Seward Towers

In early 1987, Caren Dewar, Redesign’s executive director, was in her Franklin Avenue office when she  got a call from Kathy O’Brien, then Seward’s representative on the Minneapolis City Council. O’Brien was calling with disturbing news about Borson Towers, the twin apartment buildings serving more than 600 low-income Seward residents. 

The building’s managing partner, a developer named Tony Bernardi, was considering a plan to convert the towers to market-rate housing. That conversion, if and when it occurred, could displace  hundreds of the Towers’ current tenants.   O’Brien urged Dewar to help organize a community effort to block the conversation.

The two 21-story apartment buildings on Seward’s northern edge were built in the late 1960s at a time when the U.S Department of Housing and Urban Development was encouraging private developers to build affordable rental housing.

 In Seward, HUD agreed to provide  long-term, low-interest financing for the Towers. In exchange, Borsons’ original developers gave the federal agency control over the rents paid by their tenants. Later  HUD provided additional support by making Section 8 housing subsidies available to the towers’ low-income residents.

In the 60s, the Borson developers were at the right place at the right time,  when federal support for affordable  housing was at its high point. But that support, generated by the Johnson Administration’s  Great Society, began to ebb in the 1970s as Washington was caught up in the turmoil over the war in Vietnam and Watergate.

All across the country, for-profit developers like Bernardi were beginning to wonder if affordable housing was a wise investment over the long term. Soon  they were eyeing an escape clause in their HUD contracts which let them convert their projects to market-rate housing by pre-paying their HUD mortgages and allowing their Section 8 contracts to expire.

For Bernardi, now in control of the Towers, conversion was an attractive option because it gave him access to the University of Minnesota’s huge student housing market.

 Dewar, then in her mid 30s, learned about the threat facing Seward’s affordable housing when she was just beginning her career as a leader in the Twin Cities non-profit development world. Later she would serve as executive director of the Urban Land Institute and a member of the Metropolitan Council. But prior to her Seward appointment in 1985, Dewar’s community development experience was limited mainly to a stint as an organizer for a nearby community group in Powderhorn Park.

Now, she was engaging in a monumental effort to preserve a multi-million housing asset for the Seward community. Luckily she was able to draw on the support of two, well-regarded non-profit organizations, the Westminster Corporation (later renamed CommonBond Communities) and the Greater Metropolitan Housing Corporation (GMHC). Both had more than 20 years’ experience in the non-profit housing field. Westminister,  with its ties to the Archdioceses of St, Paul, played a key role by encouraging Bernardi, a staunch Catholic, to consider options for preserving affordability at the Towers.

Redesign and its two partners established a new non-profit organization,  later renamed the Seward Housing Corporation, to purchase the towers and maintain them as affordable housing.  The 11-member board was composed of representatives from each of the three partner agencies, the tower residents and the locally-based Seward Neighbor Group (SNG).

The newly formed corporation was able to gain backing from a broad range of  public and private organizations. They included SNG, the Minneapolis Community Development Agency, the city council,  the local HUD office and the Minnesota congressional delegation.

Initially, Bernardi refused to meet with Dewar and her team to discuss the towers’ future. But he finally came to the negotiating tables when he heard rumors that city of Minneapolis might be willing to pay as much as $40,000 per apartment for the Borson property. HUD was also able use a combination of carrots and sticks to prod Borson’s management  group to start negotiating for the sale of the Towers.

After two years of arduous discussions, the two sides began moving towards an agreement. In March 1990, Dewar was able to report that an acquisition plan to preserve the Towers affordability was finally in place. “The next step will be to submit an action plan to HUD,” she explained. “We fully expect this will be an arduous task which will most likely present numerous problems yet to be solved,  but it will only be a matter of time before the deal is done!” 

The deal was finally done 10 months later, on Dec. 20, 1990, when the Seward Housing Corporation was able to complete the purchase of the newly renamed Seward Towers (later managed by CommonBond), at a cost of $18.5 million.   Funds to cover the cost of the acquisition were provided from a variety of sources that included tax increment and city bond financing.  

In his January 1991 column, the  Star Tribune’s editorial writer, Leonord Inskip, commented on successful Borson conversion. ”The changeover demonstrates how federal and local agencies can work with non-profit and community groups to save housing threatened by possible conversion to market rate. It could be a model for such housing elsewhere in the country.”

“Today, with affordable housing in such short supply, Seward  has been able to maintain a major community resource because of the efforts of Redesign and its partners to preserve affordability at the Towers,” says Kathy O’Brien. “Those efforts need to be remembered.”

This is part two of a two-part series about Redesign’s early years building community in the southside. Find the first part at here titled, “SOUTHSIDE COMMUNITY BUILDER.” It printed in the January 2025 edition of the Messenger.