Though City Club will be affordable to people earning $45,000 to $65,000 per year, it will offer amenities including a rooftop deck. Frana is the contractor for the 307-unit, 17-story project, on the southwest corner of 10th Street South and Marquette Avenue in downtown Minneapolis. (Submitted illustration: BKV Group)

A downtown Minneapolis apartment project designed to meet the budgets of recent college grads — particularly those without cars — got its official start Wednesday after three years of planning.

“We saw that this was the piece that was missing,” Holtzman said of downtown Minneapolis’ apartment market during a groundbreaking event Wednesday at Orchestra Hall. Since the apartment boom started in 2011, developers have favored luxury and market-rate projects with ample parking.

Minneapolis Mayor Jacob Frey, who attended the event, agreed with Holtzman and said he wants to see more downtown projects oriented toward affordability.

“I think it should be repeated again and again,” Frey said.

Holtzman is the former chairman, CEO and 50 percent owner of Southfield, Michigan-based Village Green Holdings. He developed a number of apartment complexes in the Twin Cities, his first being the 163-unit Loring Park City Apartment at 1300 Yale Place in Minneapolis. Those apartments opened in 2002.

City Club made a number of design decisions to reduce the current project’s cost, which Holtzman said will be in the low $70 million range.

The building has no parking and no underground floors, and its units range in size from about 350 square feet to 900 square feet of space, said Jack Boarman, a partner with project architect BKV Group in Minneapolis.

Boarman said building urban apartments without parking can’t be done in many cities. But the availability of mass transit, skyways and walkable streets in downtown made for the right environment for City Club, he said.

“This project would not have worked in any city where you need parking,” he said in an interview after the event.

Hopkins-based general contractor Frana Cos. is already at work on the 0.63-acre project site at 1000-1016 Marquette Ave. S. A two-story building was demolished to make room for the project, but the 111-year-old Handicraft Building will be preserved. That historic preservation, plus building a tall structure in downtown Minneapolis, will be a new challenge for Frana.

“This is the highest we’ve gone in these sorts of site conditions,” Frana Vice President B.J. Marriotti said after the event.

The glass and steel structure is far larger than two other projects Frana is working on downtown. The company is remodeling the Thresher Square building at 724 Washington Ave. S. into a 183-room hotel, and it’s building the 180-unit East End apartments at 721 Washington Ave. S. The developer of those two projects is Minneapolis-based Sherman Associates.

The City Club Apartments bring an additional challenge in that the building will rise on a foundation based on steel piers to be driven into the ground, a time-consuming process, said Frana President Mike Benedict. As many as 175 construction workers will be on the site daily, he said. The project is due to be finished by early fall 2019.

Financing for the project is a construction loan from Union Labor Life Insurance Co. That loan will be converted to a mortgage when the project is complete, Holtzman said. Additional financing comes from his company’s equity, and from “high net worth” families and individuals who are limited partners in the project.

The building will not be sold after completion, but will remain in City Club’s portfolio. The company is currently developing $500 million in housing projects, and owns 10,000 apartment units.

Read full article by Matt M. Johnson for Finance & Commerce here.