Final plans presented for proposed Shady Oak affordable housing project

A formal application for the proposed affordable housing complex, Shady Oak Crossing, at 4312 Shady Oak Road, was submitted July 24 by Ron Clark Construction & Design. The application follows multiple revisions to the initial concept in efforts to reach a compromise with the residents of the neighborhood.

The apartment complex would include a mix of one-, two- and three-bedroom units and would include amenities such as underground parking, an exercise room, outdoor play area, community room and onsite manager’s office. Projected rental rates are approximately $800 to $1,200 per month.

A preview of what Shady Oak Crossing would look like. If approved, construction on the project would begin in early 2019. (Submitted photo)
A preview of what Shady Oak Crossing would look like. If approved, construction on the project would begin in early 2019.
(Submitted photo)

The city has owned and operated the commercial lot—currently home to six businesses and empty storefronts—since March 2015. In order to redevelop into a residential area, the lot would need to be re-zoned from its current classification of B-2, limited business district.

Ever since discussion of a new development began in early 2016, the project has undergone many changes to incorporate constituents’ feedback.

“The plans have been through many iterations, but have been conceptual up until now,” Alisha Gray, the city’s economic development and housing manager said. “This proposal is the compilation of all those comments.”

The final plans, presented at an Aug. 2 open house, include significant updates to the apartment building in efforts to address neighbors’ concerns.

Collectively, nearby residents expressed concern about the height, size and density of the three-story development and that the overall appearance would look out of place near neighborhoods of family homes.

Their other concerns include increased traffic, reduced green space and wetlands, lowered property values and decreased privacy.

Many neighbors completely opposed the project, as made evident by resident-driven petitions that garnered more than 200 signatures, and openly expressed their preference for turning the city-owned lot into a park or recreational area.

Current tenants at 4312 Shady Oak Rd. include a veterinary clinic, animal hospital, hair design shop, hair salon, tailor, pizza restaurant, an ammo shop and a couple empty storefronts. (Sun Sailor staff photo by Sabina Badola)
Current tenants at 4312 Shady Oak Rd. include a veterinary clinic, animal hospital, hair design shop, hair salon, tailor, pizza restaurant, an ammo shop and a couple empty storefronts. (Sun Sailor staff photo by Sabina Badola)

In response, the city council requested project architects make plans for a smaller and more aesthetically pleasing building.

The final plan, redesigned with input from residents, the planning commission and the council, has made a number of changes to limit the scope of the building.

The initial concept review contemplated an urban three-story, 54-unit building that stood 52 feet tall with gabled roofing.

Now, the formal proposal shows a flat roof design. Additionally, five units have been removed—two from each end of the building, one from the outside corner—for a total of 49 apartments.

As a result, the ends of the building will be two-story components, which reduces the building height as viewed from Shady Oak Road from the north, Mainstreet from the south and neighbors from the west.

The building’s height would now measure 26 feet from its two-story components and between 35 and 37 feet from its three-story components.

Additionally, the final plan made the building narrower, with a width similar to a single-family home.
In addition to scope, the proposal also shows changes to the building’s visual appeal. Initially set to be a rectangular building, the final plan settled on an L-shape along the southern edge of the property line.

The formal proposal also shifts the building slightly towards Shady Oak Road, while providing green space between the building and the sidewalk, along the edges of the building and near the parking lot.

The amount of exposed foundation from the base of building has also been reduced by raising perimeter grades and adding retaining walls.

Additional retaining walls—along with plans for significant landscaping, tree preservation and fencing—have been added toward the north end of the lot in an effort to screen neighbors from the surface parking lot and garage entrance.

The garage entrance would be accessible through the surface parking lot from Oak Drive Lane on the west, as opposed to the initial plan’s access point coming directly from Oak Drive Lane.

A comparison of Shady Oak Crossing, from the initial concept to the final submitted proposal. (Submitted photo)
A comparison of Shady Oak Crossing, from the initial concept to the final submitted proposal. (Submitted photo)

According to city staff members, there continues to be mixed input in response to the final revisions.

“People are very passionate on both sides of the issue,” said Deb Calvert, vice-chair of the Minnetonka Planning Commission.

At the Aug. 2 open house, area resident Jeff Niska acknowledged many major concerns have been addressed.

“There have been substantial improvements. They addressed concerns about size and scale,” Niska said.

“The colors and materials they’re using have helped a lot. It’s pretty nice.”

Traffic, however, continues to be an issue for many residents, despite findings from a traffic study that show minimal effects on the surrounding intersections. According to the study, the maximum impact would be a three-second delay at peak hours. This factored in the Highway 169 construction, which is slated for completion in early November.

Elizabeth Miller, a new homeowner in the neighborhood, said she feels blindsided by the project’s potential effects on traffic flow.

“The streets in this neighborhood weren’t built for such high density,” she said. “I don’t think it’s fair to put high-density housing there for us or future residents.”

But according to Mike Roebuck, president of Ron Clark Construction, these final plans represent compromise.

“There’s only so much you can change and still have it be feasible,” he said.

A birds eye view of Ron Clark Construction’s formal proposal of Shady Oak Crossing. (Submitted photo)
A birds eye view of Ron Clark Construction’s formal proposal of Shady Oak Crossing. (Submitted photo)

According to Mike Waldo, chief financial officer of Ron Clark Construction, the project has a financing plan that would keep rent competitively priced.

The project seeks funding from the Minnesota Housing Finance Agency’s nine-percent tax credit program. The program is a public/private partnership in which an investor receives federal tax credits for a 10-year period. In this case, the tax credits would convert into equity and therefore a low mortgage. In return, rental rates must remain at a level set by the MHFA for 30 years.

If the city approves the project, the company will begin applying for tax credits in 2018 and would start construction in early 2019.

According to Waldo, approximately one-third of these types of tax credit applications get accepted.
Future tenants would need a qualifying income of 60 percent of the county’s median income to rent at Shady Oak Crossing. Currently, this puts a two-person family at or below $37,980 and a four-person family at or below $54,240.

According to Gray, average market rate for a standard two-bedroom apartment in Minnetonka is $2,000 per month at the minimum.

“The entire city is in need of more housing of all levels of affordability because Minnetonka is such a desirable place to live,” Gray said. “It’s especially tough to hear from people who want to live here and can’t afford it.”

Julie Wischnack, the city’s community development director, said a number of housing advocacy groups have stepped forward and voiced approval.

This particular area—next to Mainstreet and between Highway 7 and Excelsior Boulevard —may experience increased demand for residency due to the incoming Southwest Light Rail stations, according to Councilmember Patty Acomb.

Each future resident would be required to pass credit, criminal and housing history background checks and sign a drug-free, crime-free lease addendum, according to the application from Ron Clark Construction. The whole building would be a non-smoking site.

In order to preserve quality of the building, the MHFA would conduct annual inspections of the property and require $250,000 to be set aside in reserves, as well as $22,050 per year for major repairs and replacements.

Steven Scott Management, selected as building management, would also conduct monthly or bi-monthly inspections of each unit to make sure there is no excessive wear-and-tear or lease violations.

From an environmental perspective, city studies have shown that undergoing construction would help clean up the lot by removing and disposing of contaminated soil. Contaminants from former tenants include solvents from a dry cleaner, oils from an auto body shop and asbestos in the existing building.

Additionally, the new development would have a storm water management system that would send site runoff to a basin on an adjacent property to the west, and is predicted to reduce impervious surface by 32 percent.

The planning commission is expected make a recommendation on the project to the city council Aug. 24. The city council is expected make a final decision on the project at the Sept. 25 meeting.

City staffers said they have worked on extensive outreach to inform residents well in advance of any formal action on this project. The council continues to welcome community engagement on the project.

One can communicate with the city, leave feedback, or ask questions about the project at minnetonkamatters.com.

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