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Prepared by Rylee Bonk, Yue Guan, Jennifer Spiegelberg
Students in HSG 4461: Housing Development and Management
College of Design | University of Minnesota Instructors: Lyn Bruin and Becky Yust
On behalf of The City of Rosemount
With support from
The Resilient Communities Project
May 6, 2015
This project was supported by the Resilient Communities Project (RCP), a program at the University of Minnesota that convenes the wide-‐ranging expertise of U of M faculty and students to address strategic local projects that advance community resilience and sustainability. RCP is a program of the Center for Urban and Regional Affairs (CURA).
This work is licensed under the Creative Commons Attribution-‐NonCommercial 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by-‐nc/3.0/ or send a
letter to Creative Commons, 444 Castro Street, Suite 900, Mountain View, California, 94041, USA. Any reproduction, distribution, or derivative use of this work under this license must be accompanied by the following attribution: “Produced by the Resilient Communities Project at the University of Minnesota, 2014. Reproduced under a Creative Commons Attribution-‐NonCommercial 3.0 Unported License.”
This publication may be available in alternate formats upon request.
Resilient Communities Project University of Minnesota 330 HHHSPA 301—19th Avenue South Minneapolis, Minnesota 55455 Phone: (612) 625-‐7501 E-‐mail: [email protected] Web site: http://www.rcp.umn.edu
The University of Minnesota is committed to the policy that all persons shall have equal access to its programs, facilities, and employment without regard to race, color, creed, religion, national origin, sex, age, marital status,
disability, public assistance status, veteran status, or sexual orientation.
Table of Contents
Executive Summary …………………………………………………………….… 2
Identification of Target Market …………………………………………………… 3
Project Description………………………………………………………….…….. 7
Financial Plan………………………………………………………………….….. 12
Entitlement Plan…………………………………………………………………... 14
Marketing Plan ………………………………………………………...…………. 15
References………………………………………………………………………… 18
Appendix………………………………………………………………………...… 19
1
Executive Summary
Enjoy affordable living in Rosemount, Minnesota at Callan Circle. Located at the
southeast corner of Akron Ave. and Connemara Trail, Callan Circle is conveniently set
just 1 mile north of Dakota County Technical College and offers easy access to the
major south metro thoroughfares of S Robert Trail, County Road 42, and Highway 52.
Unique apartment designs and numerous amenities provide all the comforts of
modern living, while beautifully landscaped grounds, a neighborhood park, and walking
trails make the most of the site's natural setting. Professionally managed with caring,
experienced, and attentive staff, Callan Circle will be a place to call home for residents
in various stages in the circle of life in Rosemount.
Callan Circle is a 3story building with 80 apartment homes and offers Studio, 1
Bedroom, 2 Bedroom, and 3 Bedroom options. The building will feature residential
design elements of gabled roofs, a brick and stone exterior, and architecturally detailed
finishes to provide an appealing and wellsuited addition to the neighborhood.
2
IDENTIFICATION OF TARGET MARKET
Both the city of Rosemount and Dakota County Technical College (DCTC) are in
dire need of rental housing units. It is necessary that DCTC have studenthousing units
because, according to a Student Focus Group conducted with a group of current DCTC
students, the majority of students are commuting; sometimes long distances, in order to
get to the college. Potential students may be put off by the lack of affordable rental
housing for them to move into if they were to enroll in DCTC. For potential students that
live too great a distance to realistically commute to and from DCTC every day, it would
make sense to move near the college, but that is difficult to do with the minimal rental
options currently available in Rosemount. Technical school students, who are usually
enrolled in college for a shorter term than someone seeking a bachelor’s degree, are
not interested in extendedterm leases or expensive rental housing payments. If
Rosemount lacks affordable rental opportunities that appeal to students in this position,
DCTC may see a decrease in student enrollment. This, in turn, would lower the number
of collegeeducated individuals that may find employment opportunities in Rosemount
postgraduation and want to stay, hopefully enriching the community. This development
3
would also aim to supply affordable rental housing to DCTC employees who find
themselves in the same commuter situation as students.
The general population of Rosemount is also in need of rental housing and the
need for affordable housing is a serious issue in greater Dakota County as well. In
2013, the Dakota County Community Development Agency (DCCDA) studied its
projected housing needs through the year 2030 and found the demand for affordable
housing would continue to significantly increase. Apartment rental units were cited
specifically as high demand since low vacancy rates and escalating rents have made
affordable rental units in short supply. The study was published in the DCCDA's July
2014 newsletter and included the following figures:
Dakota County Additional General Occupancy Rental Housing Demand Summary: 20102030
Affordable 3,793
Market Rate 4,708
Total 8,501
Source: http://www.dakotacda.org/CDA_publications.htm
Callan Circle would help to serve the city’s and the county's need for both market rate
and affordable rental units by contributing to the supply of affordable housing options in
Rosemount.
4
Callan Circle is a development that welcomes people in all stages of their lives.
The overriding goal of this development is to make living here as affordable as possible
for multiple backgrounds of people. Groups that this development is targeting include
DCTC students, young professionals, and families. Although this development is largely
being constructed with DCTC students in mind, the development must also be
comfortable, appealing and accommodating for nonstudents.
Although Callan Circle welcomes people across varying stages of the life cycle,
many of the basic necessities that this development will offer are sure to be enjoyed by
all. It is important that the development be in a safe neighborhood that residents are
proud to call their own. It is also important that the location of the development be in
close proximity to commercial amenities such as grocery stores, recreational areas, etc.
According to a DCTC student focus group, many students chose their residence based
on how close it was to a commercial center in order for them to easily walk to their
places of employment. Many of the students do not have access to their own vehicles
and therefore must strategically plan their lives around a short distance commute
between work and home or have to rely on roommates or friends for their vehicle. That
being the case, it would be extremely helpful for DCTC students in this situation to have
the opportunity to live in a development that is a very short distance from both their
5
college as well as a wealth of employment opportunities found in a commercial district
nearby. Although other populations living in the building may have constant access to
their own vehicle, everyone still enjoys a short commute in which to run errands.
Whether it is a fulltime student or a single parent, everyone loves convenience in order
to make their daily lives that much easier.
Market research of existing conditions found in Rosemount’s supply of apartment
rentals was conducted via an online apartment search. Data was collected from a
number of properties in close proximity to the DCTC campus. The range of unit types,
unit sizes, and rent amounts offered by these properties were analyzed to understand
the local standards specific to this part of town and to help determine how the design of
the new Callan Circle development could meet, or exceed, these standards. Table 1
and Table 2 illustrate the data collected and are provided in the Appendix.
The DCTC student focus group provided two very interesting details about
student housing needs and preferences. First, the major factor in any decision about
housing is affordability and most agreed that a $650 per month expense for housing
was the amount they were able, or desired, to pay. Second, most students were willing
to share an apartment with roommates in an effort achieve affordability, but also and
perhaps more significantly, in an effort to achieve social connectivity. Sharing a
6
bedroom is an accepted practice at this young age and can help create a sense of
camaraderie that may be difficult to find on a campus filled with commuters. Students
are in a unique position to leverage this willingness to share an apartment with
roommates who will share the expenses against the everrising cost of rental housing.
The challenge is to find large, moderately priced units in a location near campus to
achieve real affordability. The unit mix, sizes, and rents set at Callan Circle hope to
meet this challenge.
PROJECT DESCRIPTION
As one of its goals established in its Comprehensive Plan, the city of Rosemount
desires to provide appropriate housing for its residents through all stages of life. The
Callan Circle housing development will target individuals in the early adulthood stage of
life who are generally aged 2035. A special focus towards serving the needs of
students and young professionals aged 2426 will be the primary goal of the housing
development. Individuals who are single or who are sharing an apartment with a
roommate(s) are expected be the dominant type of resident, yet accommodations for
couples, small families, and older adults will also be provided.
The Callan Circle housing development also aims to bring an affordable housing
option to the city of Rosemount. The housing development will target individuals of low
to moderate income who are renters by circumstance have limited funds available for
housing expenses.
7
The Callan Circle housing development will be a medium sized 3story building
offering studio, one bedroom, two bedroom, and three bedroom options and will offer
apartment homes for rent with varying shortterm and longterm lease options. A
12month lease period will be the property's standard, yet flexible lease terms suited to
the needs of DCTC students will be available at a premium in monthtomonth, 3, 6 ,
and 9month lease periods. Although a “head rent” practice is common in most student
housing developments, Callan Circle will maintain a standard per unit lease agreement
with all adult individuals named on a single lease. These rent policies are designed to
provide maximum control over the resident selection process, to ensure quality
residents who are familiar and comfortable living with one another, and to minimize the
disturbances to the larger apartment community that can come from high turnover rates
of students.
NAME
The town of Rosemount was named in 1855 by Irish settlers. Feeling strongly
about maintaining a connection to their native heritage, these first residents named their
new town after one from their homeland. Respect for the Irish tradition continues today
as the city and its residents identify Rosemount with an Irish heritage. Street names like
Ailesbury Court, neighborhood names like Falmoor Glen, and city events like
Leprechaun Days have set a precedent for the sense of place in this community. The
proposed development aims to fit into this community and to promote the city’s
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connection to its Irish roots. The name Callan was chosen in the same manner as the
town's founding members as it is also the name of a small town in Ireland.
Also, one of the main goals for the proposed development is to provide lifecycle
housing for Rosemount residents throughout all phases of life. The name and imagery
of the circle were chosen to support the idea that one could be born in Rosemount,
grow, live, work, study, and play throughout the entire cycle of their life while remaining
in their hometown.
IMAGE
The image of the proposed building is of a 3story building featuring residential
design elements like gabled rooflines, exterior materials of brick, stone, and lap siding,
doublehung windows, covered porches, and finishing details.
The housing development will also try to maintain the “hometown” feel that is
unique to living in Rosemount by modeling the apartment building after traditional single
family homes found in the surrounding neighborhoods. The size, scale and massing of
the structure should be an appropriate match for the existing housing styles found on
adjacent properties and make use of durable, residentially appropriate materials. The
proposed building image is included in the Appendix.
AMENITIES
Technology is an important factor in the life many of today's young people.
Amenities like reliable highspeed Internet, WIFI access, docking/charging stations,
9
and good cell phone coverage are in high demand. Timesaving amenities like inunit
laundry, efficient kitchen layouts, and “media savvy” management are also in demand.
Spaces to socialize outside the individual apartments are increasingly of interest so
Callan Circle will offer a Community Room, a Business Center, and an outdoor patio. An
online rent payment system, flexible leasing terms, an onsite resident manager, and
24hour emergency maintenance are combined with durable construction, interior
wainscoting, secure building access, elevator service, bicycle storage, and a mix of
underground and surface parking to provide convenient and practical living solutions. A
neighborhood minipark, a walking path, and an apartment bus service to nearby
regional service areas are some desirable amenities found only at Callan Circle.
Energy conservation is an important issue to the city and to its residents. While
Energy Star rated appliances, energy efficient lighting, and high performance HVAC
systems are planned to help reduce the property's overall energy consumption, the
special feature of a rooftop solar photovoltaic system is planned to help promote the
implementation of renewable energy solutions. The solar facility will provide research
data to Xcel Energy about multifamily residential energy use and generate energy to be
consumed onsite.
Bicycle and pedestrian access from the housing development to the future
commercial district planned for the northeast corner of Akron Ave. / County Road 42
and to DCTC across County Road 42 is also a desirable feature that would greatly
enhance the proposed development's connectivity to services, employment options, and
10
academic pursuits. This access should coordinate with the city's work on the Vermillion
Highlands Master Plan.
Plans for the future commercial district may consider attracting some service
providers who meet the specific needs of students who are typically short on time and
low on money. Some possible services could include a daycare offering extended hours
and flexible dropoff periods and a fresh market that incorporates a pharmacy, a
minuteclinic, a dry cleaner, and a small postal outlet. A variety of dining and convenient
food options, businesses that offer parttime job opportunities, and a Goodwill style thrift
shop where household items can be economically acquired should also be considered.
NEIGHBORHOOD AND HOUSING STYLE / TYPE
The property located north of DCTC at the southeast corner of 135th St. E. and
Akron Ave. is being considered. This location is attractive because it is currently zoned
R3 Medium Density Residential and R4 High Density Residential. An adjacent property
to the south is currently zoned C4 General Commercial. The Dakota County Community
Development Agency (DCCDA) currently owns an adjacent parcel of land on which they
plan to develop townhome style housing to the north and the potential exists for another
townhome development from Lennar to occur to the east. Single family homes built
throughout the 1990's and relatively new subdivisions of new construction homes exist
to the west and north. Traditionally styled 1story and 2story homes make up the
majority of the existing housing in this area. A sample of the existing housing styles,
proposed building image, proposed unit floorplans, and a proposed site plan are
11
included in the Appendix. Callan Circle will meet the city’s building requirements of a 35’
maximum height with a 3story building plan. While certainly taller than its neighbors,
Callan Circle will try reduce the overall height of the building in certain areas to provide
a nonintrusive structure of appropriate massing.
FINANCIAL PLAN
Market research indicates the need for affordable housing will increase through
2030. Callan Circle will be a mixedincome housing development that offers 60% of its
units to marketrate residents and 40% of its units to low and moderateincome
residents who meet the criteria of 50% AMI. Funding for the development will be sought
from a mix of private and public sources. Private financing will be sought to fund the
marketrate portion of the project, where 75% of the funds needed will be provided
through bank loan/mortgage and 25% will be provided from equity investments. Public
financing will be sought to fund the affordable portion of the project, where 70% of the
funds needed will come from the use of Low Income Housing Tax Credits and 30% will
come from a combination of interest free loans and grant monies. Grants from the Xcel
Energy Renewable Development Fund and the U.S. Green Building Council's
Affordable Green Neighborhoods program will help to finance energy conservation
efforts and renewable energy generation. A breakdown of the proposed project funding
sources and Stage 1 Financial Analysis are included in the Appendix.
It seems the mixedincome portion of this development can make financing a
challenge. Earlier versions of this proposal calculated the financial analysis for a 66unit
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development and were unable to achieve a development profit. The critical number in
these calculations is the Net Operating Income (NOI). It determines the value of the
project and therefore the maximum loan amount, yet seems relatively independent from
any of the other major figures like construction costs or government subsidies. A shift in
any of these numbers generates no real change in the calculations, yet a shift in the
NOI by increasing gross potential revenue makes a significant difference. An 80unit
development has shown to be much more financially successful, making a $844,761
development profit.
While the design team intended to keep the housing development small for a
variety of reasons outside of the financial analysis, it became clear that the project must
be larger in order to generate more revenue, and to ultimately demonstrate a profit that
would attract investors. Rents have been raised to the maximum level the market will
bear and the building’s overall size has been reduced. If a greater development profit is
desired, one last option could be to charge additional rent for parking in order to
increase the project’s total rental revenue and its NOI.
Callan Circle will ensure sustainability by being welldesigned for flexibility,
adaptability, and longevity and by being managed appropriately with an emphasis on
maintaining a positive cash flow, successful collection of rents, and careful monitoring of
expenses. Maintaining a good reputation, staying current about trends and patterns in
the market, and being focused everyday on providing excellent customer service to both
new and current residents will be the keys to successful longterm operations.
13
ENTITLEMENT PLAN
A building permit is required for a construction in the City of Rosemount, MN.
Before the process of obtaining a building permit for this development, the zoning
process would come. The proposed site for the development of Callan Circle is currently
zoned medium density residential that is eligible to have 3story multifamily
construction. The site is currently vacant and does not require obtaining a demolition
permit.
In order to obtaining all rights to accomplish this proposed development, working
with city planning staff to develop the most appropriate development possible will be a
key factor in promoting the project to local residents as a beneficial addition to their
community. Preliminary discussions with the Rosemount city planner confirmed the
city’s interest in a housing development targeted towards DCTC students and revealed
a willingness to consider creating a Planned Unit Development (PUD) for this housing
project. The PUD would allow the city and the developer to negotiate modifications to
the existing zoning standards for this specific property and use.
These negotiations may result in the need to meet higher standards in some
areas in exchange for reduced standards in others. Work sessions with city staff,
including planners, engineers, and the departments of public works, parks and
recreation, fire, and police will be needed to coordinate the details of the PUD
Agreement. Once details of the PUD Agreement are finalized the developer must
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submit a set of required materials, like a Final Site Plan and a Final Building Plan Set to
the city for their review. Attendance at a public hearing before the city's Planning
Commission is also required. The city will notify neighboring property owners of the
public hearing and place a notice in the local community newspaper. If amendments to
the agreement are necessary based on comments from the public hearing, the
developer must revise their plans and resubmit their materials to the city for further
review. An additional public hearing may be need if the amendments are major changes
to the original PUD Agreement. Once a recommendation from the Planning Commission
is received, the developer must come before the City Council for final review of the
proposed development.
Neighborhood support would need to come from the adjacent singlefamily
neighborhoods to the north and west. Several homebuilders (Ryland, Brandl Anderson
Homes, Charles Merritt Homes, Lennar, Key Land Homes) are developing subdivisions
of new construction in these two areas. Outreach, education, and coordination with
these builders and the Home Owner's Associations in the subdivisions should be
considered very early in the planning process to begin addressing any NIMBYism that
may occur.
MARKETING PLAN
In order to attract students of DCTC to this development, it may be marketed as
a place where young people who are serious about their studies and their future
pursuits can thrive. While this development will marketed to attract students, its design
15
would not be specific to only students, nor would it have obvious ties to DCTC via
design principles. This is to ensure that other market populations such as families, older
adults, couples, etc. do not perceive the property to be a dorm or campus housing and
feel deterred from envisioning the development as their home. An important component
to consider when developing marketing strategies for this project is the juxtaposition
between the varied lifestyles of students, singles, and families. Typically, the first thing
that comes to mind when people think of students are loud, raucous, and messy people
who could potentially make bad neighbors. Marketing efforts will focus on the fact that
just because someone is a college student does not necessarily mean they have to live
like one and will stress the fact that the property’s design, the management policies, and
the resident selection process have been geared towards attracting, and meeting the
needs of, residents who will have a high regard for their neighbors and who will be
enjoyable to live near regardless of their status as a student.
Most people today expect that a high level of information about the property be
available through the Internet. Property web pages, apartment search engines, and
locator services are often consulted as the first step in any apartment search. A
carefully planned and wellexecuted profile should be created to obtain the best
possible position on these webbased platforms. Again considering the importance of
16
technology in the lives of today’s young people, it would be imperative that multiple
social media campaigns be utilized. These sources may include but are not limited to:
Facebook, Craigslist, Twitter, and Instagram. A mobilefriendly version of the property’s
website and a presence on community message boards should also be explored. More
traditional marketing efforts like advertising in neighborhood editions of the community
newspaper, local magazines, and apartment directories will also be used to reach
potential residents who seek information in a nondigital format.
A significant opportunity to market the property directly to students may available
by forming a connection to DCTC. A casual and informal relationship based on the idea
of being community partners, this connection could use DCTC resources to help raise
awareness of the property and its studentfriendly amenities. The placement of posters
or flyers in student common areas, the establishment of a referral program, and the
formation of a directory of students interested in finding potential roommates are
possibilities to consider. In turn, Callan Circle should explore ways to support the
college by sponsoring of some of the college’s events, attending community open house
sessions, and participating in volunteer opportunities. Doing so will demonstrate a
shared interest in DCTC’s mission of empowering individuals through quality education.
17
References
Course Textbooks:
Kelley, E.N. (2009). Practical apartment management. (6th ed.). Chicago, IL : Institute of
Real Estate Management.
Peiser, R.B. & Hamilton, D. (2012). Professional real estate development : the ULI
guide to the business. (3rd ed. ). Washington, DC : Urban Land Institute.
Websites:
City of Rosemount: Retrieved from http://www.ci.rosemount.mn.us Dakota County Technical College: Retrieved from: http://www.dctc.edu Dakota County Community Development Agency: Retrieved from http://www.dakotacda.org Minnesota Housing Finance Agency: Retrieved fom: http://www.mnhousing.gov Xcel Energy Renewal Development Fund: Retrieved from: http://www.xcelenergy.com/Environment/Renewable_Energy/Renewable_Development_Fund U.S. Green Building Council Affordable Green Neighborhoods Grant Program: Retrieved from: http://www.usgbc.org/initiatives/grants/affordableneighborhoods
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