This architect’s rendition shows how The Bluffs portion of The Heights project is intended to look once landscaping has been completed.
Minnesota’s North Shore, like much of the country, faces a shortage of housing. The situation is further complicated when the region’s beautiful landscapes and lakescapes attract seasonal ownership of what little apartment and housing stock is available. It can drive up the market prices for renting and buying, often out of the income range of those working locally.
The need has been especially great for the high-season employees in the hospitality industry. Many of the major lodging operations have created their own dormitories to accommodate workers.
Community leaders in Cook County took a look at that dilemma and have floated a concept that might work for other Big Lake towns.
Gary Latz
A late-winter view from one of the apartment building’s balconies shows the views of Lake Superior.
As of this spring, The Heights, Bluffs, a three-story complex, has opened near downtown Grand Marais with all but five of its 36 units already rented. The project employed fast-building techniques and a core group of 51 investors contributed $3 million in owner equity while also securing 18 additional funding sources.
These are not transient housing units and under the current agreements will not be rented for short-term holiday stays, says Gary Latz, The Heights project manager.
Gary Latz
Maximizing storage space and an airy atmosphere was part of the design choices made for the new apartments.
Speaking just weeks after the early April opening, Gary, long a vocal advocate of the project, admitted that even he was stunned by how quickly the apartments were being rented.
“The product is incredible. People see it, and they love it. The physical walk-around WOWs everybody.”
The studio, one-bedroom and two-bedroom units were designed to impress … and accommodate. The ceilings are 9 feet up, creating an atmosphere of space even in the smaller units. The apartments range from 427 square feet to 840 square feet.
“From the very beginning, we wanted to create the most living space and storage possible,” says Gary. “People walk into the apartment and they go, “Wow!’ at the high ceilings and airy and bright room.”
A set of floor plans shows the general layouts for the studio, one- and two-bedroom apartments.
All of the units have 42-inch high kitchen cabinets, plus pantry and closet spaces. The one-bedroom units feature a “giant walk-in closet,” notes Gary, adding that early renters tell him “‘I have never seen an apartment with more storage space than this.’ That was our primary design goal, to make them feel big.”
The apartments all have balconies or 5x8-foot concrete patios facing the Lake or the hills. All first-floor units will have a fenced-in yard for a pet-friendly environment.
The apartment complex was designed to go up fast. Concerned for delays in construction for the much-needed units, the investors opted for modular construction, with the units manufactured out of town and then shipped in for assembly.
Modular Homes by Dynamic Homes and their distributor Ideal Homes offered “personalizing”of the models it manufactured.
“We’re not builders, we’re not developers. We design the building and once we did the contract and gave the OK, we didn’t have to do anything,” Gary says. The building arrived in 36 pieces, more or less, that were fitted into place within three days.
“I drove by on Monday and there was nothing there, and drove by on Friday and there was already a building standing,” Gary recalls. “We ran into winter, but we mostly made it indoors by the time winter came along. It went so much more smoothly and so much more predictably.”
About half of the $9.1 million project went to the moduals, he adds, and that price was locked in. “They gave us a price and they delivered at that price. That really made the risk lower.”
Local contractors, though, were still hired to do the excavation and blasting necessary to develop the 3.5-acre property.
Over the winter, the interior designing of the project was completed in the apartments. The one- and two-bedroom units feature a stacked washer-dryer. Those were not added to the nine studio apartments in order to maximize space. Tenants can use the community laundry free of charge for now thanks to two washers and dryers donated from local condos that were upgrading. “It’s a small town, everybody knows everybody,” Gary says about how the “free laundry” came together.
Gary is also fond of the details of the spaces, like ceiling fans on lights, vegetable sprayers in the sinks, carpeted bedrooms, easy-to-clean vinyl flooring and Formica countertops.
How the property came about might be a model for other small towns on the Big Lake.
Gary Latz
The community room on the top floor offers the best hillside view in the building, says Project Manager Gary Latz, as well as a gaming table and space to just chill with neighbors.
“A bunch of us, we want to do something about housing. We formed a real estate investment development company,” says Gary. “The organizers realized that nothing was going to happen unless they came forward.
Because of the large base of equity – $3 million – required by banks and lender, the investor base grew to 51 people, all with strong ties to Cook County, living full or part time in the area. Some were in it strictly to get community housing, others expected a financial return on investment. “All 50 people are not exactly the same,” says Gary. “I have to look out for the interests of everybody.”
In addition to the five different loans, the group got nearly $1 million through four different grants from local foundations.
“Shortly after we formed the investment group, we found a parcel of land that was for sale,” Gary says. “We recognized immediately that the location was perfect for housing, and we secured the land ASAP.”
There is still outside landscaping to complete, but the main “building” that remains for this complex is the building of community within it.
Each size of apartment has three different rental price points – market rate or reduced rents for those qualifying according to their incomes compared to the Area Median Income, depending on if they are at 60% or 80% of the AMI.
More than a dozen of new tenants only recently moved to the county, Gary says. “We have people who are working in the tourism industry … and then we have professionals working for the county or for the legal process.”
The final touches are being put on a community room for the complex. It’s on the top floor with the best hillside views, according to Gary, and should be a welcoming space for neighbors to get to know neighbors. The room has a rudimentary “kitchen” area, plus tables to play games or make puzzles. From your apartment, Gary says, “you can step out, walk over to the community room, read a book, talk to your neighbors, do a puzzle.”
Dogs and cats are allowed in the building, and it’s hoped that some of the spaces will fill with young families.
“We will also have an outdoor area – about 10,000 square feet- with a playground, picnic table and gazebo.”
Thanks to an elevator in the building and good accessibility, all floors of the complex also can be the next chapter for older residents of the region. If they transition from a house into the apartments, that could open homes for younger residents … another of the hopes of the original investors.
“It’s the domino effect when people move from one kind of housing to another, it creates opportunities.”
Gary Latz
Each of the upstairs units has a balcony, from which residents can view the Sawtooth Mountains in one direction and Lake Superior in the other.
The Heights, Bluffs is Phase 1 of the overall investment plan. Phase 2, The Woods, is a vacant section of the property, that is on the future horizon, says Gary. “There will be a second phase – and they are looking for an additional group of backers.” Gary adds that his job may sunset this summer as Bachand Property Management has hired an on-site manager..
For now, the current complex is giving people a place to call home in the county, Gary notes.
“We will mostly fill our property with people who are willing to give the county a chance,” he says.
“We’re helping people create their dreams … and that’s a really good feeling.”