Klodt seeks Hopkins site for apartments - Finance & Commerce

Posted: 7:35 am Wed, March 28, 2012
By Burl?Gilyard
Tags: Cornerstone Group, John Bell, Kersten Elverum, Klodt Inc., Luther Automotive Group, Paul Klodt, Southwest Corridor, Tara Beard

A former Park Nicollet clinic at 815 First St. S. in Hopkins closed in 2009. Minneapolis-based Klodt Inc. plans at least 110 apartments on the site, which is currently owned by the city. (Staff photo: Bill Klotz)

110 units would be near LRT station, core of suburb

As interest heats up in potential development along a future Southwest Corridor light rail transit line, Minneapolis-based Klodt Inc. is negotiating with the city of Hopkins on a site where it wants to build at least 110 market-rate apartments.

The property, now home to a vacant clinic, is one block from a proposed light rail transit (LRT) station on the Southwest LRT line.

Klodt Inc. has been a prolific apartment developer along the Hiawatha LRT line in south Minneapolis. For a time last year, the Hopkins project status was unclear as Klodt Inc. Chief Executive Officer Paul Klodt was in failing health. Klodt, 78, died last month.

But John Bell, vice president of construction and development for Klodt Inc., said the company is moving ahead with its plans and hopes to have a development agreement approved in the next 30 to 60 days.

?There were a few months ? where we were in limbo,? Bell said. ?At this point we would anticipate that we would break ground about a year from now.?

Kersten Elverum, director of economic development and planning for the city of Hopkins, said the city aims to have the development agreement on the agenda for the April 17 meeting of the Housing and Redevelopment Authority.

?We are making progress on the development agreement,? Elverum said, noting that the project would still need to secure land use approvals. ?We?re looking forward to breaking ground.?

Klodt Inc. became interested in the site when it began to scout locations along the future Southwest LRT line, Bell said.

?Right away this site jumped at us. The light rail is one thing, but the proximity to Mainstreet in Hopkins was really a strong drawing card to us,? Bell said.? ?We?re going to be there long before the light rail comes.?

Tara Beard, community development coordinator for the city of Hopkins, said the Downtown Hopkins LRT station is slated to be located at the southeast corner of Eighth Avenue South and Excelsior Boulevard, one of three stops in Hopkins. Construction of the line could start in 2014 or 2015, and the Southwest LRT line should be operational in late 2017 or early 2018, Beard said.

Beard said the city hopes to create a connection between the light rail station and downtown Hopkins. Excelsior Boulevard is two blocks from Mainstreet in downtown Hopkins. Another challenge is that the station will be on the south side of Excelsior Boulevard, which means that people will need to cross Excelsior, a wide thoroughfare, to head toward downtown.

?There?s all sorts of pedestrian improvements that can be made ? we really want to make Eighth Avenue a place in and of itself,? Beard said.

Hennepin County is preparing to issue a request for proposals for the ?next generation? of station-area planning along the line, she said.

A Park Nicollet clinic, which closed in mid-2009, is still standing on the 815 First St. S. site. The city struck a deal to buy the property and issued an RFP in 2010.

Besides Klodt, the city drew responses from Plymouth-based Dominium and Richfield-based Cornerstone Group. The city selected Klodt Inc. in April 2011, one month after paying $1.68 million for the site owned by Park Nicollet.

Bell said the project could be expanded to about 160 units if the developer acquires an adjacent site. But it?s not clear if that deal will come together. Bell said he won?t know what the total budget will be until he knows the scale of the project.

?We do have an equity partner that we?re doing this with,? Bell said, declining to name the partner.

Klodt Inc. will seek traditional bank financing for the deal, he said.

?It?s not impossible. Deals can be done,? Bell said. ?We certainly don?t have big issues with getting construction lending done.?

Klodt Inc. is just wrapping up Station 38 Apartments, a 64-unit project adjacent to the 38^th Street Station on the Hiawatha LRT line in south Minneapolis. The complex, at 3725 29^th Ave. S., opens this weekend.

For the moment, Bell said, Klodt Inc. is not moving ahead with any other projects in the Hiawatha corridor.

?We still own some other property along the Hiawatha light rail. We?ve got quite a commitment there already,? Bell said.

Other sites near the LRT line are drawing interest in Hopkins.

The Luther Automotive Group paid $1.8 million last summer for an 8.9-acre industrial site, generally known as the Engineered Building Components (EBCO) site. The property is close to the planned Downtown Hopkins LRT Station, but Luther has not disclosed any plans yet.

?We?d like to encourage them to share their vision with us,? Elverum said of the EBCO site.

Ed Hanlon, a commercial property specialist with Edina Realty, has a listing for a long-vacant former Snyders Drug store at 15 Ninth Ave. N. in Hopkins, which is two blocks north of the Klodt site. The property is listed for $1.1 million.

Hanlon said the site is starting to draw interest, prompted in part by light rail plans. While he has no deal yet, he?s encouraged.

?Last year it was an albatross,? Hanlon said of the site. ?I?ve had a lot of interest in the Snyder Drug building of late ? it?s a perfect piece of property for development.?

This entry was posted on Wednesday, March 28th, 2012 at 7:35 am and is filed under Real Estate, Top Story. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

Source: http://finance-commerce.com/2012/03/klodt-seeks-hopkins-site-for-apartments/

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