By Amanda Theisen
The impacts of modular housing have been well documented over the past two decades. Units can be built inside a climate-controlled factory, then shipped to the site. This can help reduce construction costs, speed up the building process, and keep workers on the job all year long. The University of Minnesota’s Urban Research and Outreach-Engagement Center’s Job Creation Team even predicted modular housing manufacturing would be one of the top career opportunities, while also adding room to the tight affordable housing market.
Former NBA player and developer Devean George believes modular housing has the power to transform North Minneapolis.
His latest project–turning a former warehouse on Washington Ave. N into a modular housing manufacturing plant–is set to break ground later this spring. When it’s complete, George estimates it could not only turn out hundreds of new affordable housing units, but also bring more than 300 well-paying jobs to the region.
“With all my projects I try to have a mission and community engagement,” says George. “Providing jobs is one of the main things I'm really trying to do with my business.”
Passion for providing affordable housing
George’s efforts to help solve the affordable housing crisis go back to his own roots in North Minneapolis. Growing up, George says his parents chose to stay in the neighborhood, instead of moving, so that he and his siblings could attend private school.
“Even though I lived in an underinvested neighborhood, we always had a roof over our head,” he says. “We had a stable home so that my brothers and I could focus on other things.”
During his time in the NBA, George and his teammates took part in many player volunteer events. Through those events, and through starting his own nonprofit, he met and mentored hundreds of children who did not have a steady place to live.
“I realized when kids are missing that stable housing, when they don't have any place to rest their head every night, when they're missing from school for weeks at a time, that’s a huge problem,” he says. “I asked myself, ‘How am I going to talk to these kids about eating vegetables and going to school when they don't even know what they're going to eat or where they’re going to stay?’”
On the path to development
After his NBA career, George turned to real estate development. He initially worked on market-rate housing projects, but quickly realized more affordable housing was needed, especially in North Minneapolis.
George teamed up with Sunrise Banks for his first affordable housing project in 2013. He received a very low interest rate and was able to get the project off the ground quickly.
“Affordable housing is very expensive, so that really helped,” says George. “I'm always thankful for Sunrise Banks for getting me started in this field because every percentage point matters.”
Pitching the modular housing factory
George pitched the idea of the modular housing manufacturing plant about two years ago to a variety of stakeholders, including Sen. Bobby Joe Champion (DFL-Minneapolis), Mayor Jacob Frey, and several Minneapolis city council members and staffers. They all loved the idea and started putting support and financing behind it. This included a $2 million loan from the City of Minneapolis and an additional $3 million in financing from the state.
Sunrise Banks also stepped in to provide $8 million of New Markets Tax Credit (NMTC) allocation and related debt financing to the tune of $12,500,000. U.S. Bank and local CDFI Community Reinvestment Fund also provided additional NMTC allocation to the project.
“It often takes a village of lenders, public entities and individuals to make deeply innovative impact projects possible, and this project is no exception,” says Mary Stoick, Senior Vice President and Director of Tax Credit Lending at Sunrise Banks (right in photo). “We were honored to take a seat at the table with so many public and private partners that commit in big ways to solving our community’s biggest problems – in this case, affordable housing and quality job access.”
“Even though it was a very complicated deal, I had the best people doing it,” George says. “That gave our stakeholders comfort in getting this thing to the end.”
Building apartment units like cars
The warehouse will be gutted and retrofitted with assembly line equipment that will build the modular housing units, similar to how cars and trucks are put together.
“We’re trying to get to 85 to 90 percent of building the unit indoors,” says George.
The units will then be shipped to a building site and stacked like Legos. Once utilities are connected to the building and units are furnished, they can be ready for residents.
Immediate economic impact
George says his team is working to recruit workers from North Minneapolis. This includes partnering with workforce development nonprofits like Summit Academy, Twin Cities RISE and EMERGE Community Development.
“We're working with the underemployed and unemployed,” he says. “We're taking people off the street and getting them trained. We're impacting their lives with paychecks right away.”
“This project stands out because of its steadfast commitment to quality job creation, which is a pillar of the New Markets Tax Credit program,” says Stoick. “Nearly half of Americans are employed by small businesses, and small businesses are at the core of the work Sunrise Banks does to empower financial wellness. When we support small business, we can help lift people and communities out of poverty.”
“I feel grateful because when I look back, these people really invested in me, took a chance on me and believed in this project,” George says. “There's a lot at stake for them to get this project going and believe in my vision.”
Learn more about how Sunrise Banks sparks economic growth throughout the Twin Cities using the New Markets Tax Credit program.
This article originally appeared in the Minneapolis/St. Paul Business Journal.
Amanda Theisen is the communications manager at Sunrise Banks.