On Tuesday, October 4th, Executive Insight Series speaker Jim Stolpestad of Exeter Realty discussed Ironton Asset Fund’s plans for the Chittenden & Eastman Building, which should be ready for occupancy by Fall of 2012.
Ironton is taking advantage of Minnesota and Federal historic tax credits to rehab the property and develop 104 market rate rental units. The Chittenden & Eastman Building (“C&E”) is located on the future Central Corridor Light Rail line in St. Paul, just three stops from the University of Minnesota campus. The apartments will be moderately priced and targeted primarily at non-students, working adults and those in the arts community.
Stolpestad has a successful history with urban multifamily projects, including Cobalt Condominiums, which is anchored by a Lunds store, in Northeast Minneapolis. His company’s track record, and the fact that Ironton provided cash for the purchase of the distressed building, facilitated the perfect opportunity to reinvent this section of University Avenue. While the C&E building owner received many offers, ultimately Ironton purchased the property on a short sale, for $1.6 million (asking price was $3.5 million) and acquired C&E in the Fall of 2010. Ironton is scheduled to close on financing next week and begin the ten-month construction period.
The historic 1917 building does present some challenges for conversion to multifamily. Ironton is working with architect BKV Group, who has a strong track record of multifamily projects and recently completed Mill District City Apartments, to modify the building’s façade (according to historic guidelines) by punching out additional windows for the units. Unit sizes will average 1,000 square feet with a mix of primarily one bedrooms, some two bedrooms, and some studios. Rents are projected at $1.45-1.65 per square foot, modest in comparison to higher end projects slated for downtown Minneapolis. Amenities will include a rooftop patio and underground parking (less than one stall per unit since there is no minimum parking requirement along the LRT line).
The project was partially funded by the sale of historic tax credits, now 40% in Minnesota including state and federal incentives. Sherwin Williams purchased $2.8 Million of the credits, under the condition that Sherwin paint products are used exclusively in the project.
Mr. Stolpestad is excited to be again working in St. Paul, as he notes that his family has a 125 year history in the city. Stolpestad has also worked with retailers to develop storefronts on Grand Avenue.