Brooklyn Center ‘Opportunity Site’ Project in Holding Pattern Due To Financing
Developers say funding issues have pushed back the timeline for construction at a high-profile Brooklyn Center redevelopment site.
The city of Brooklyn Center is working with the development firm Alatus — the same firm that redeveloped the former Block E in downtown Minneapolis to its current form as Mayo Clinic Square — to redevelop an 80-acre plot of land dubbed the “Opportunity Site.”
The Brooklyn Center City Council approved plans for the first phase of redevelopment at the site last year.
Funding Setback for Opportunity Site
Those plans call for the construction of hundreds of apartment units, commercial space, a regional park and a business incubation center.
Alatus expected to break ground on the project this year. Now, they say lenders aren’t funding big projects due to rising interest rates.
“The equity market and then the debt markets are both in — I don’t know — turmoil, but that’s probably not strong enough,” said Bob Lux, founder of Alatus. “The regional banks that are typical lenders for projects like this … have basically discontinued lending for large projects.”
To move the project forward, the developers may need to remove the city-owned business incubator, also known as the Entrepreneurial Market Place (EMP), from the project for the first phase, Lux said.
“We want it,” Lux said. “I think what we’ve got to do is be pragmatic — get the apartments to go and keep the space for it so we can figure it out.”
Brooklyn Center Mayor April Graves said that the EMP is an important aspect of the development agreement for the community.
“I just want to make that that doesn’t get lost in translation,” Graves said.
Lux said if interest rates stabilize, he hopes to find funding in 2024.
“The market is frozen, so I think what we’ve got to do is kind of take a deep breath right now,” Lux said. “Understand that we’re committed to it. We’ve put a significant amount of money into this project.”