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Santa Vera Submittal Narrative 07.16.2025 Santa Vera Apartments Submittal Narrative Proposal Headwaters Development is proposing a redevelopment of the Santa Vera Apartments site (the “Site”) located at 621 Santa Vera Drive, located just north of downtown Chanhassen. The redevelopment will consist of the new construction of 28 townhome-style fiats, which will supplement the existing slab-on-grade 18-unit apartment building currently operating on-site. As part of the project, the existing building will also be renovated to include updated units, a new exterior, and improved landscaping and drainage. Once completed, the total project (the “Project”) will consist of 46 rental apartment homes. Site Location The Site is bordered by Laredo Drive to the east, Saratoga Drive to the north, and Santa Vera Drive to the northwest. Immediate adjacent uses are Chanhassen Elementary School immediately to the south, City Center Park to the west, and predominately single-family residential homes to the north and east. Santa Vera is located less than a ¼ mile from the City of Chanhassen’s Central Business District, and only steps away from employment centers, vital services, grocery stores, retail and entertainment, and a variety of dining options. Zoning and Land Use The Site is approximately 3.85 acres. The present zoning is PUD Residential, and the present land use designation has the property guided Residential High Density, which allows for 8-16 units per acre. The Residential High-Density guidance allows for up to 46 units by right. The Project is ideally located for these additional units given its proximity to employment and services, and the existing infrastructure currently in place is sufficient to handle the increased density. We are not requesting any waivers from the applicable zoning code. Site Design The design of the Site allows for separation from the existing neighborhood single-family homes. The proposed access to the Site would be from both Laredo & Santa Vera Drive. The Project will also adhere to all landscaping requirements, allowing it flt seamlessly into its surroundings and the existing neighborhood. New stormwater ponding will be constructed on the Southeast portion of the site – the natural low spot. This ponding will serve both the new townhome buildings, as well as treat the stormwater from the existing apartment building, which is currently released untreated into the municipal storm system. 2 Project Description Once completed the Project will contain forty-six (46) total units across three buildings. Twenty -Eight (28) units will be included in two newly constructed two-story buildings. Each new unit will have its own dedicated garage and direct access entry. The remaining eighteen (18) units currently exist within the two -story slab-on-grade building originally built in 1968. The Project will be constructed as one cohesive development through connectivity, architectural design, and shared amenities. The existing building contains a current unit mix of 8 one-bedroom units and 10 two- bedroom units. The newly constructed buildings, as currently contemplated, will contain a unit mix comprised of 10 one-bedroom units and 18 two-bedroom units. The following tables better illustrate the overall Project unit count and mix. Existing Building (built 1968) Units Avg. SF One Bedroom Units 8 785 Two Bedroom Units 10 890-990 Total Units 18 New Buildings Units Avg. SF One Bedroom Units 10 1,100 SF Two Bedroom Units 18 1,575 SF Total Units 28 Combined Units One Bedroom Units 18 Two Bedroom Units 28 Total Units 46 Parking and Amenities Interior flnishes will include hard surface countertops, hard-surface fiooring except for carpet in the bedrooms and quality lighting and plumbing flxtures. Most, if not all, units will have private balconies, in-unit washer/dryers, and all 2+ bedrooms in the new building will contain en-suite bathroom. Once complete each resident will have access to at least one enclosed garage stall. Overall, project will contain a total of 62 parking stalls, or 2.21 stalls per unit – a more than 2:1 parking ratio. Trash will be collected within the building footprint. It will be set out on the designated trash day and returned within the parking garage after collection. 3 The new building will include shared amenity spaces for all Project residents to enjoy, including a dog run, outdoor patio with grilling stations and a flre pit, and a trail connection to the existing city trail system. Architectural Design The project resides within the Saratoga 3rd Addition and will be required to comply with Chapter 20 of the Chanhassen City Code which provides guidance as to the expected architectural standards. Speciflcally exterior material be of high quality and durable, consisting of glass, wood or other quality materials as deemed acceptable by the city. The roof will be pitched with high quality shingles. Landscaping will meet or exceed the code, and signage will comply with the sign ordinance for residential districts. Sustainability The project will utilize many green building methods during construction and the Project itself will include low fiow plumbing flxtures, low VOC paints, LED lighting where appropriate. Currently the site does not treat any stormwater runoff. New stormwater ponding will be created with the Project utilizing the stormwater runoff from the site for irrigation of the proposed plantings. Financing and Affordability In addition to design, the Project also need to be flnancially viable. The project team is currently assessing how the tariff environment will affect construction pricing and what the current flnancing environment looks like for a smaller project such as Santa Vera. To upgrade the existing units, we expect a flnancing “gap” will exist that will need to be overcome in order to make the rehabilitation of the existing building viable. We will work with city staff to determine what city, county, and state funding tools are available for the creation and preservation of naturally occurring affordable housing (NOAH). We do not anticipate requesting TIF. Many of the existing units at Santa Vera already qualify as NOAH units. However, those units along with the existing exterior of the building are old and tired and in need of some updates. Any city, county, and/or state assistance will help aid in the renovations while also helping preserve the existing affordability. The overall Project aims to achieve slightly lower rents than the new luxury projects that recently opened and are currently under construction in Downtown Chanhassen. Given the allowed density and site constraints, Santa Vera will not be able to compete with the amenities provided at the Venue, Harlow, or Bennett. As such, it will not be able to command the top of the market rents. However, it 4 will serve a very important niche by providing housing to the missing middle – a very underserved segment of the current housing market. Given the investment and focus by the city’s leadership on creating a vibrant downtown, the preservation of existing NOAH units, along with the creation of new moderately priced rental homes near the city center is vital. Those that provide vital city services, as well as those that work at area restaurants, shops, and businesses should also be able to live near where they work. Santa Vera is uniquely located and positioned to expand the city’s housing options and help add to the vibrancy of the surrounding area. Phasing and Construction Schedule It is anticipated that the project will commence construction late fall of 2025. Initial activities will include site clearing, installation of utilities and infrastructure, rough grading and excavation, and then vertical construction. Simultaneously, renovations will occur in the existing 18-unit building. We will purposely keep at least one unit vacant in the existing building to serve as a “hotel” unit for residents to use while their unit is being updated. It is anticipated that the entire duration of construction will be approximately fourteen (14) months. Development Method Headwaters intends to develop and own the project for the foreseeable future. Headwaters is a Twin-Cities based company. The principals of Headwaters have a successful track record, and have been involved in the development, acquisition, and rehabilitation of over 5,000 units translating to over $2 billion worth of projects spanning the Midwest, Central Plains, and Mountain West regions of the Unit States.