HRA director talks partnership with the City of Grand Marais and defining “Affordable”

August was a busy month for housing in Grand Marais. Between the rejection of the Bjorkberg project by the city council and the launch of the Gunflint Vue website for rental applications, there has been a lot of public discourse about the type of housing that residents hope to see in town.

Bjorkberg

The Bjorkberg project was a proposed 19-unit development of townhomes for sale. The Planned Unit Development (PUD) attracted opposition from neighbors of the site on W. 3rd St, with homeowners expressing concerns about traffic infrastructure, and the impact of building on existing homes. While the project received support from the Grand Marais Planning Commission for a Conditional Use Permit (CUP), the issues raised by neighbors gave the City Council pause. They tabled the request, giving the developer, Jon Petters, time to make adjustments, but ultimately voted on Aug. 14 not to approve the CUP. On Aug. 28 the council officially denied the CUP.

Cook County Housing Redevelopment Authority Executive Director Jason Hale spoke with WTIP after the August HRA meeting. The HRA worked with Petters on Bjorkberg, helping connect the developer with resources in exchange for five of the townhomes being designated for sale at a lower price point. Hale said that the HRA was disappointed that the project would not be moving forward as planned. He added, however, that he respects the council’s decision, and said that part of the reason that the HRA tries to support several projects at once is because there is always a chance that one will not move forward. He said, “Not all the projects we’re working on are going to come to fruition. That would be fantastic as far as adding inventory and getting housing built, but that’s a realistic approach to development.”

Hale said that the council’s rejection of the Bjorkberg CUP will have ripple effect. He said that he has heard from several other developers with questions about the situation. He added, however, that he will also be meeting with the council to discuss some of the concerns raised during the CUP approval process. Hale said that the meeting will be a chance to talk through the city’s priorities and factors like utility infrastructure, with an eye toward helping future proposed projects have more success. He emphasized that the HRA has a valuable partnership with the City of Grand Marais.

As far as Bjorkberg is concerned, Hale said that Petters does still intend to build on the site, though with a different plan. Hale said that Petters is looking at options that don’t include a PUD.

Gunflint Vue

As Bjorkberg stalled out in the planning phase, the Gunflint Vue construction progress is well underway. In August, the developers listed future units on the building’s website. The public response was mixed. While, according to Hale, the developer has already been able to lease some units, some community members balked at the prices. Market rate units are listed at $1850/month for a 663 square-foot one-bedroom, and $2100/month for a 783 square-foot two-bedroom.

Nearly half of the units of the 51-unit complex are earmarked for income-qualified tenants, but some have questioned the affordability of even those units, all listed for over $1,000 per month. Hale said that often “attainable” pricing and “affordable” pricing are conflated, saying that a term like affordable is both subjective to the public, but also carries a specific industry definition. He said that the developer and the HRA opted to base the reduced rent based on Annual Median Income (AMI) for the county, and on the guidelines from Minnesota Housing for the types of units that will be available.

Hale explained that most deeply affordable housing units, like those at the Birchwood Apartments, Grand Marais Apartments, Sawtooth Ridges, or Harborview, are built using tax subsidies and public funds. He pointed to the example of the Birchwood Apartments and the funding that OneRoof was awarded from the state to execute the major renovation currently underway at that complex. He said that, according to the state, new affordable housing typically costs about $400,000 to build. Without public funding, some of that price ends up being passed on to tenants.

There has been early interest in renting units at Gunflint Vue, especially those designated affordable, according to Hale. He said that as far as the market rate units go, only time will tell whether the price of rent really will deter potential residents. He said that having units available at a range of price points is important to addressing the housing crisis. He said, “It also, at the end of the day, is a is a negotiation in what the developers can do and are willing to build, and what they’re willing to agree to. This problem is a, well, according to some, a 40 year problem Cook County. We’re not trying to solve the entire housing problem with that one project, but we’ve got to start making a dent.”

WTIP’s Kirsten Wisniewski spoke with HRA Executive Director Jason Hale about the most recent updates to housing efforts in Grand Marais. Audio of that interview is below.

Kirsten Wisniewski September 3, 2024