New real estate fund partners hope 300 block project can help reshape the downtown
Published 9:00 pm Friday, June 30, 2023
The Albert Lea Real Estate Fund, which entered into a purchase agreement this week with the city of Albert Lea for four properties on South Broadway, has goals of being a part of several other projects in the community in addition to the one announced this week downtown.
The fund is made up of a group of local investors and the Albert Lea Economic Development Agency collaborating with a firm called REVocity out of Northfield.
ALEDA Executive Director Phillip Johnson said his organization had been looking into options for a community investment fund even before the COVID-19 pandemic, but was looking for the correct vehicle to bring it about.
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Some contacts had suggested to reach out to REVocity about its work in other communities, and they found the firm to be the best vehicle to move forward with the idea, he said.
“It’s been a really good match,” he said.
REVocity President Lori Bonin said REVocity was founded in 2011 and works with community leaders to establish community real estate funds. These funds provide opportunities for individuals, nonprofit organizations and businesses to invest in their own backyard to create an impact in their community and receive a financial return.
REVocity has similar efforts underway in Owatonna, Faribault, Red Wing, Rochester, Winona, and Bonin emphasized that in each of the communities with the investment funds, the process is one that is locally driven.
“Part of what’s important to the model and its success is having a local group like ALEDA that will come together with us and be our general partner,” she said, referencing Johnson and other community leaders who are passionate about Albert Lea and who can identify the projects that would be best for the community, as well as potential investors.
Johnson said the fact that the partnership is led by local people and people who care about the community is one of his favorite things about the community investment fund.
To be an investor, people were invited to learn about the fund. Bonin said they have shared with at least 60 people at this point, and as of this week, there were 28 local investors, including Southern Minnesota Initiative Foundation and other individuals. They are still looking to raise capital.
“We think this project will be a great way to get additional people excited,” Bonin said of the project on the 300 block of Broadway. “It gives people the opportunity to invest in their backyard — people who maybe don’t have knowledge or experience in real estate.”
When the group started thinking about what projects it wanted to be a part of, Johnson said they initially put together a list of 40 to 50 different properties.
The 300 block of Broadway, which last summer saw the demolition of buildings at 324 and 332 S. Broadway because of disrepair, has long been a priority of the Albert Lea City Council. He said if there was an opportunity to do something about that area, he said, they wanted to try.
“Let’s try to turn something that for the last 20 years has been a blight and do something that can be one of the most positive things in the community — kind of help reshape the downtown as a whole and help redevelop and grow it,” Johnson said.
Bonin said the first step was to acquire the building at 302 S. Broadway, the Wedge-Jones Building, at the corner of Broadway and Main Street, which presently houses Midwest Antiques on the main level. The goal for that building is to honor the history of the building and renovate it using historic tax credits. It will include retail on the first floor and likely office space on the upper floors.
The group is still reviewing whether to renovate the next two buildings, at 310 and 314 S. Broadway, or if they will be demolished.
Plans for those two buildings, as well as the empty lots next to them, are for mixed use, including retail on the main levels and housing on the upper floors, though they said they are not able to provide more specifics at this time.
Bonin said the goal is to add density, to re-imagine the block and to provide something beautiful in that space. The group will work closely with the Historic Preservation Commission with the city of Albert Lea.
Johnson said the goal is to turn “one of the most blighted areas, especially on the main drag of downtown, into one of the nicest areas and kind of going forward from there.”
They hope the fund will eventually invest in a variety of different projects as part of the capital they’re raising, whether it be housing, commercial, industrial or retail opportunities. In some cases the fund will be the majority funder, while in other cases they may provide equity for a project.
Bonin said the group is also looking at another opportunity downtown, and it also has some other projects in the pipeline outside of downtown.
She said it has been great to hear the support and the passion of Albert Lea’s community leaders, as well as those REVocity is working with for the fund.
“We really love Albert Lea as well,” she said. “We believe it has a great profile for success of the fund and these types of investments.”
The purchase agreement provides a 355 day due diligence period that will allow the parties and the city to work toward a develop agreement and to apply for grants.