People keep wondering how long developers will continue to build new metro apartment buildings. They will have to keep wondering. Roseville-based McGough has started work on The Fenley, a 402-unit apartment project near the Mall of America in Bloomington.
“The demand for multifamily rental continues to remain very strong,” said David Higgins, vice president of development with McGough. “I think you’ll find most national trends are showing a continuing movement towards more mobility.”
Higgins said that both millennials and empty-nesters are drawn to the flexibility offered by rental housing.
The project has a budget of approximately $100 million and will open in 2020. McGough is holding a formal groundbreaking on Thursday, but site work began in late October and early November.
The project is the latest to rise on McGough’s 50-acre Bloomington Central Station site.
McGough previously built The Reflections, a two-tower condo project, and a Hyatt Regency hotel on the site. Lennar Multifamily Communities, the apartment arm of Miami-based homebuilder Lennar Corp., built the IndiGo project on the site, which has roughly the same number of units that are planned for The Fenley.
“They’ve done very well,” said Higgins of the Lennar property.
After its latest project, Higgins said that McGough still has 14.8 developable acres at the site for future projects.
The Fenley is also notable as one of the first projects in the state to take advantage of new federal Opportunity Zone tax benefits. The Opportunity Zone provisions were included in the 2017 Tax Cuts and Jobs Act. The program allows investors with capital gains to defer and potentially earn discounts on taxes in exchange for investing in federally designated Opportunity Zones.
“From our understanding it’s certainly one of the first [in the state],” said Higgins. “It was a meaningful driver in wrapping up our financing for the project.”