VII.3. Approval of Purchase Agreement between the City of Hopkins and the Minnehaha Creek Watershed District for 325 Blake Road; Elverum
CITY OF HOPKINS
City Council Report 2026-085
To: Honorable Mayor and Hopkins City Council
Mike Mornson, City Manager
From: Kersten Elverum, Director of Planning & Development
Date: August 3, 2026
Subject: Purchase Agreement – 325 Blake Road
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RECOMMENDED ACTION
MOTION TO Approve the Purchase Agreement between the City of Hopkins and the
Minnehaha Creek Watershed District for 325 Blake Road.
OVERVIEW
The majority of the property that made up 325 Blake Road is owned by the Minnehaha
Creek Watershed District (MCWD). The MCWD purchased the 17-acre site in 2011 for
$14.95 million dollars. At that time, MCWD intended to provide regional stormwater
treatment, shoreline restoration, public amenities and access to the creek on the
eastern portion of the site, while selling the remaining 12+ acres for transit -supportive
development. To this end, the City and MCWD entered into an agreement to work
collaboratively and through that process a developer was selected. That developer,
Alatus, refined the vision for the redevelopment of the site, subdivided the property and
obtained land use approvals for five of the six development parcels. Alatus was
immediately successful in obtaining housing tax credits for the first phase, bought the
land from MCWD and constructed Chorus Apartments, which was completed in late
2023.
Shortly after that time, the housing market began to tighten. Construction and
operational costs began to rise and the financial markets encountered 22 interest rate
increases. These factors all but dried up the pipeline of new apartment projects across
the Twin Cities, worsening the current housing crisis. To keep the development moving,
Alatus continuously worked to bring the necessary capital to develop the remaining two
apartment projects. This led to a new opportunity to partner with the National Housing
Partnership (NHP) and through that relationship and significant effort, NHP has become
committed to building the next phase, Building D, which is a 215-unit mixed income
apartment development.
To preserve the approved development vision and move forward with the construction
of the extension of Second Street NE through the site, Alatus requested an extension of
their Purchase Agreement. MCWD did not grant the extension and Alatus filed an
objection with the Hennepin County Court. Through settlement discussions, city staff
have concluded the only path forward for the current vision to be realized and for the
needed housing to be build is through the City having control of the property by
purchasing it for the $9.25 million asking price and subsequently selling individual
Planning & Economic
Development
development parcels. The purchase agreement terms will reflect the discussions that
have been held with the City Council in previous meetings. There will be a presentation
at the meeting that outlines the terms.