Luxury apartment complex in New Hope to begin construction in April

The New Hope City Council on Feb. 27 approved the vacation of easements and final plat, and acting as the city’s Economic Development Authority, approved a loan of up to $350,000 for a higher efficiency refrigerant system, for the Alatus luxury apartment complex, 8400 Bass Lake Rd.
Four of the five council members supported the vacation of easements and final plat. Councilmember Jonathan London abstained from voting.
When Mayor Kathi Hemken asked why he chose to abstain, London said, “I’m not in favor of adding more apartments to the city. Given those grounds I would just rather not vote in favor.”
The 182-unit multifamily apartment project includes a tax increment financing district of $6.4 million during the span of 23 years.
Hemken asked if London supported the more than $30 million project.
“Yeah, but the problem with the $30 million is you’ll likely be dead by the time we actually ever see any taxes from the building, 23 more years before we actually record any revenue,” he said.
London also did not agree with the $350,000 EDA loan, which was approved with a 4 to 1 vote.
When Alatus first approached the city Feb. 21 about upgrading the refrigerant system, developers and city staff believed the funding could be included in the tax increment financing district.
At the time, Hemken asked if the city’s portion could instead be provided through a loan.
Alatus officials ultimately agreed to the loan.
“I think this is a lot more palatable for the Economic Development Authority and it’s a benefit for us as a city that we get a LEED-certified building in the city,” Sargent said. “It’s a benefit for Alatus as well.”
LEED stands for leadership in energy and environmental design. LEED-certified buildings use less water and energy and reduce greenhouse gas emissions.
“I applaud your efforts to bring about a green building,” London said. “I can’t see the numbers in it. The problem I have here is this is up to $350,000 of a potential loan that we have no idea the terms on.
In London’s opinion, the city’s financial advisors did a “poor job” negotiating the sale of the land.
“Now it sounds like we’re going to go ahead and provide more financing even though we don’t know the terms,” he said. “I mean that’s what I find just outrageous.”
Commissioner Eric Lammle clarified that the council was voting on the concept of a loan and not the terms.
According to Community Development Director Jeff Sargent, once the loan terms were determined, the matter would need council approval.
“Yes, the initial expenditure is $350,000, but the idea of a loan is that it’s paid back,” Lammle said.
A benefit to the city is the additional 182 households of the income type that drive development, according to Lammle.
“What do developers say when they’re coming to New Hope?” he said. “Well, your income can’t support it. Well, we’re about to add 182 households whose income base can support that type of development. That’s the difference between an Aldi and Trader Joe’s.”
Lammle admitted he was not certain if 182 households would make that difference but it would be a good start.
“I don’t see a down side to this deal,” he said. “As to how we negotiated it? We sold swamp land for a million bucks.”
Commissioner Andy Hoffe, who was opposed to the city providing $350,000 when it was going to be included in the tax increment financing district, supported the loan.
The loan would help fund Alatus’ $688,000 refrigerant system purchase. If the project exceeds $700,000, Alatus will cover the additional cost.
“The reason we wanted to bring this to you and really entertain whether or not we should do it, is we do want to have this building be a forward thinking, kind of a demonstration project that would be viewed not only by the City of New Hope and the residents in New Hope but also the western suburbs,” said Bob Lux, principal of Alatus.
Construction is anticipated to begin in April.

Contact Gina Purcell at [email protected]