2nd Avenue Apartments on the Rise
22 Sep 2020
In large, densely packed urban centers, the lack of quality, market-rate housing is readily apparent. It is not, however, so easy to identify in rural cities and townships. In fact, it’s almost invisible to the community. Nevertheless, it is a reality that economic development associations face daily when trying to maintain existing manufacturing and entice new businesses to their area.
That is why the recent groundbreaking ceremony for the 2nd Avenue Apartments in Long Prairie was a reason for celebration. The symbolic turning of dirt represented the completion of the planning and development phase for a major 37-unit market-rate apartment complex. Set against the backdrop of active construction, the community witnessed the culmination of a partnership between city, county, and state government and those of local business that represent not only the cornerstone of a new building, but of community involvement and cooperation.
The 2nd Avenue Apartments are a development that almost didn’t happen. At one point it was deemed to be a non-viable project. In 2018, Ron “Skip” Duchesneau, project developer with D. W. Jones, Inc. was unable to justify the expenses of the project against what they determined could be charged for rent based on market rates. It’s a little-known fact that it costs as much to build a project of this size in rural Minnesota as it does in the state’s urban centers. Because market-rate housing is not subsidized, expenses like building materials are the same and labor is paid at prevailing wage. Rents for a two-bedroom unit start at $950 in Long Prairie, whereas in the Twin Cities they would be closer to $1,600 or more, so, aside from the lower costs for land, which are offset by the need to upgrade water and sewer infrastructures, all things are pretty much equal. That, however, did not deter Rick Utech at the Todd County Development Corporation from keeping the project alive.
A year later, Utech introduced Duchesneau to Long Prairie Packing, the city’s largest employer, who were having difficulty finding places for their employees to live. Duchesneau explained that the company went so far as to buy an apartment building in Alexandria, where they set up a dormitory-type housing environment as a short-term solution for new hires, and ran a bus to shuttle workers to the plant in Long Prairie. It didn’t work out as well as they planned, so the owners were intent on helping develop housing in Long Prairie. Utech found an investment partner in Long Prairie Packing’s parent company, Rosen’s Diversified. The pieces quickly started falling in place to make the project work.
Participation in the project at the state level came through the Workforce Housing Development Program, a small program within the Minnesota Housing Finance Agency. The program began “as a pilot program with DEED about six years ago and then transferred to MHFA two years ago,” said Duchesneau. The financial award from the state totaled $1,338,620, a sizable investment from their $2 million annual operating budget. As a testament to the importance of the state’s involvement, Jennifer Ho, the Commissioner of Minnesota Housing Finance, traveled to Long Prairie for the groundbreaking ceremony. Duchesneau and Utech were more than appreciative of the effort, in light of the COVID pandemic. “To get her to take time out of her day to come to Long Prairie and throw a scoop of dirt in the air, especially with COVID, and this is her first venture out of the Twin Cities since COVID started. So, we were excited that they were willing to allow her to do it,” said Duchesneau. “To get somebody like that to come and hear the whole Long Prairie story, what we talked about, about the housing problems and be proud about their involvement in the project is pretty neat.”
The City of Long Prairie, represented by Mayor Jodi Dixon, and City Administrator Ted Gray, as well as local county commissioners, were also instrumental in keeping the 2nd Avenue Apartment project moving forward at all times. Acceptance of the award required a local match of at least 25%, which the City of Long Prairie was able to match. “Ted Gray, a new city administrator was very involved. Between Ted and then Ehlers and Associates, their consultant, they got very creative in coming up with a tax TIF/tax abatement. They were very involved. I don't want to downplay their involvement at all, and we had to get a conditional use. But they've been very supportive and very helpful in getting us to a closing.”
Duchesneau noted that once all the parties were on board, the project progressed at lightning speed. He praised Rosen’s involvement, enabling them to move forward. “We started a bit early on doing working drawings, doing soil borings, doing some of the things that we wouldn't normally wait until we had an award from Minnesota Housing Finance. But they encouraged us to go forward and get this thing shovel ready. “I want to say it was like May 6, the city was notified that they were awarded the funds for this project, and in 71 days we broke ground, which, I've never gone that fast before.” Duchesneau.
Groundbreaking ceremonies are normally community celebrations. However, due to the COVID guidelines, the groundbreaking was restricted to a smaller than normal gathering of mask-wearing individuals representing the diverse parties involved in the development project. Nonetheless, it was a momentous occasion in Long Prairie, where meeting the needs of the community, facing challenges, while overcoming obstacles by stepping up to be catalysts for change formed the modern cornerstone of a partnership between city, county, state and private interests culminating in the development of the 2nd Avenue Apartments.