St. Paul nonprofits plan affordable housing on Arcade, East Seventh streets

Frederick Melo, Pioneer Press
Updated ·5 min read

Two nonprofits that specialize in services for the homeless are working with the city of St. Paul to develop long-vacant lots on the East Side into deeply affordable housing.

Face to Face, a nonprofit that works closely with homeless young people ages 16 to 24, plans to build a four-story building at 1170 Arcade St. featuring 20 housing units for the very poor — individuals earning no more than 30% of area median income. The units would span a mix of studios, one-bedrooms and two-bedrooms, with 6,000 square feet of space on the ground level dedicated to tenant social services.

The building, which carries an estimated construction price tag of $13 million, will sit directly adjacent to Face to Face’s current Arcade Street clinic, which offers additional medical and mental health services.

“Our services are intended to respond to the barriers that young people face … with housing being the number one barrier,” said Hanna Getachew-Kreusser, executive director of Face to Face, addressing the city council on Wednesday.

Getachew-Kreusser said the nonprofit currently offers 80 units of “scattered site” housing for “high-priority homeless” young people, rented from landlords throughout the Twin Cities, but having a dedicated, mixed-use apartment building will be a new venture.

The site, located across the street from a Walgreens, a block south of Maryland Avenue and four blocks east of Payne Avenue, offers ready access to transit lines, shops and potential employers. A gas station on the site was demolished in 2000, and the city’s Housing and Redevelopment Authority purchased the vacant lot in 2008. The HRA issued a request for proposals for a developer for the vacant lot in February 2023 and Face to Face was awarded tentative developer status last June.

Face to Face is in the process of seeking funds from Ramsey County, private foundations, the city, state bonds, private lenders and individual donors. If major funding comes together, Face to Face hopes to purchase the property from the city in August 2025 and then immediately commence construction, which could take a year. Residents could start moving in by September 2026.

Project for Pride in Living on East Seventh St.

Also on the East Side, Project for Pride in Living plans to build a five-story, 60-unit affordable apartment building at 892 East Seventh St., a vacant lot that was once owned by 3M and sold to the St. Paul Port Authority in 2009.

All the units would be income-restricted to individuals earning no more than 30% or 50% of area median income, with apartment sizes mostly ranging from one bedrooms to four bedrooms.

At least two of the units will feature five bedrooms, family-size housing that is almost unheard of in affordable rental housing, and a rarity in rental housing in general. A total of 26 units will be three bedrooms or more.

“We find that’s a real big need in this neighborhood and the city of St. Paul, these larger units,” said Dan Bayers, a project manager with St. Paul Planning and Economic Development.

“I don’t think I’ve ever seen five bedrooms on any document since I’ve been on this board … or on the council, and it’s really responsive to the needs that we hear from our constituents,” said Council Member Rebecca Noecker, who chairs the St. Paul Housing and Redevelopment Authority, during a presentation before the HRA on Wednesday. “There are people who need more than studio apartments.”

In addition, the building’s ground level will feature 40,000 square feet of retail space managed by Soul Community Development, which will host Minnesota Community Care’s training and administrative space, a daycare and an 8,000 square foot food hall with business incubator space.

There also would be surface and underground parking.

Minnesota Community Care, a community health center with sites across St. Paul, operates a sizable clinic across the street and has been an active partner in the building’s development, said Mandy Pant, an associate director of real estate with Project for Pride in Living.

Pant told the city council last Wednesday that the community health center hosted community focus groups in 2022 that found affordable housing — and intergenerational housing — to be a high priority.

“Minnesota Community Care started to see this big need for housing in their patient population,” Pant said.

$32M project

Construction of the project will cost an estimated $32 million for the housing alone, averaging more than $500,000 per unit.

“If this were a typical development, it would be a lot less expensive per unit,” acknowledged Chris Dettling, vice president of real estate development for Project for Pride in Living, in an interview Friday. “The reason we’re doing large units is just because of the community need. When we did community engagement, there was just a lot of desire for intergenerational families.”

“Generally, if there’s more square footage, it’s going to be more expensive,” he added. “I don’t think this is any more expensive than any other development if you look at it per square foot. Part of the challenge is the inflation in construction costs. It’s been kind of a nightmare since the beginning of the pandemic. We have inflation in operating costs, just to operate the building — the utilities, the insurance, the staffing for property management. It increases the size of the necessary reserves, and the reserves are included in the total development cost.”

The organizers are in the process of getting the site rezoned from business zoning to traditional neighborhood zoning and finalizing funding from a variety of sources, including the city of St. Paul and the city HRA. The city council last year awarded the project an allotment of 9% low-income housing tax credits, and in the fall of 2022 awarded funding from the American Rescue Plan Act.

If full funding comes together by September, housing construction could start shortly afterward and be complete by November 2025.

Other projects

Also on the East Side, Dayton’s Bluff Neighborhood Housing Services plan to convert two vacant lots currently owned by the St. Paul Housing and Redevelopment Authority into two-story, single-family homes for first-generation homebuyers earning no more than 60% of area median income.

The city council, meeting as the HRA on Wednesday, approved the sale of the properties at 729 Burr St. and 930 York Ave. through the city’s “Inspiring Communities” program, which aims to boost housing and other opportunities for disadvantaged communities.

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