To many small towns, a corporation like MetroPlains Development would seem too good to be true. The St. Paul company swoops into small towns and saves abandoned or decaying buildings from the wrecking ball. It then remodels the buildings and turns them into affordable apartments for families or seniors.
The company's president and Devils Lake native Gary Stenson says that MetroPlains is just a business that found a niche market.
"We take advantage of various community development programs Stenson said. "Our projects are usually in smaller communities where there's not much competition."
His concept isn't original; but Stenson has made his company one of the most well known development companies operating in small towns from Clairmount, Okla. to McAlester, S.D.
MetroPlains Development L.L.C. builds about $20 million in properties each year and has revenues of around $4 million. It's privately held by a small number of investors, including Stenson, who founded the company in 1978.
How MetroPlains works
The biggest share of MetroPlains business is the rehabilitation of historic buildings. The company buys inexpensive abandoned buildings in small towns that most of the residents want to save. About 95 percent of its property is in towns of less than 50,000. Sometimes it can get buildings for one dollar because the cost of demolishing them would be equal to the land value in the end.
MetroPlains then has its own architects design the apartments while it looks for alternative funding sources like low interest loans and tax subsidies designed to fight urban decay or promote construction of low-income housing.
Sometimes MetroPlains partners with nonprofit agencies, like the Senior Citizens Center in Grand Forks, to help attract different sources of financing to a project.
Once most buildings are complete they are turned over to MetroPlains' building management affiliate, Garsten Perennial Management Co. based in St. Paul and Devils Lake. Garsten then hires on-site caretakers to manage the buildings. The Garsten/MetroPlains partnership currently manages about 1,000 housing units across the Midwest.
It has won architectural design and urban development awards for its work.
Stenson said the road to success in the smaller markets is knowing where alternative funding sources are. MetroPlains taps into as many as six funding sources for each project. Typically the company seeks federal, state and local urban development but it has also received funding from the Department of Agriculture's Rural Development Program and the National Park Service.
How to choose a site
Stenson flies the company jet to cities up and flown the Great Plains as he checks out potential sites for MetroPlains projects.
Finding sites is easy, Stenson said.
"We get contacted by a community or a school board that has an old building it wants done or a referral from the national trust of historic preservation" he said.
In the rehabilitation business, a lot of time is spent up front understanding the characteristics of the building, Stenson said.
The company makes money because it knows which buildings will work for apartments and which ones won't.
"Sometimes they don't work very good for housing," Stenson said. "If you got a big square warehouse building, it won't work, whereas if you get an old hospital or school that has much more window area, it will work well."
There are financial reasons for which MetroPlains turns down projects, too, he said. The company does market research on communities before considering a site.
"Often times there isn't a housing market for what we do, either because the town isn't growing or there is a surplus of housing," Stenson said
Renovating buildings like South Middle School in Grand Forks is a bet that MetroPlains is usually pretty sure about.
"Often these older schools are in a residential neighborhood that has a real built-in market," Stenson said, "with people who want to stay in the neighborhood, sell their house and move (into the project) when they get older."
Having strong community support also helps get a project off the ground, Stenson said.
`'We often find that if you have a historic building in a community that's well-known and if you have a lot of people in the community that want to preserve that building, that often helps you attract the funding sources in a community," he said.
There are currently at least 75 projects in 11 Midwestern states: North Dakota, South Dakota, Minnesota, Kansas, Oklahoma, Nebraska, Iowa' Missouri, Illinois, Wisconsin and Michigan.
With a staff of 17, MetroPlains renovates eight or nine developments each year. About half are on the National Register of Historic Buildings Stenson said.
MetroPlains development has left its impression on many North Dakota cities.
In Stenson's hometown of Devils Lake, MetroPlains has bought, renovated and manages eight properties, including the Great Northern train station, St. Mary's Academy, Glickson's, the firehouse and the opera house.
In Grand Forks, MetroPlains is working on a project at the old South Junior High School building. It also renovated the old Ryan Hotel in downtown Grand Forks and St. Anne's Guest Home, which is now Riverside Manor.
In early October MetroPlains will break ground on its first project in Grafton when it turns two buildings at the State Developmental Center into about 50 units of affordable senior housing.
MetroPlains has also done housing projects In Jamestown, Dickinson, Bismarck and Beulah, N.D.
First project was in Devils Lake.
Stenson, who has a law degree from the University of Minnesota founded the company in 1978 almost by accident. Stenson was living and working in Minneapolis when he heard there were plans to put a parking lot where the Great Northern train station stood in his hometown.
With his legal background and experience as an aide to U.S. Senator Walter Mondale Stenson found government assisted housing dollars and community development grants and turned the building into his first senior citizen housing project.
Stenson said the pace was slow at first he finished about one project in each of his first three years. As the reputation of his work grew' so did the scope of the company.
In the early 1980s, the business began to take up all of Stenson's time so he quit practicing law and named his company MetroPlains. Stenson partnered with an accountant, Larry Olson and an architect, LaVerne Hanson Jr., and began to find projects outside of North Dakota, first moving into Wisconsin and the upper peninsula of Michigan.
It was easier in the early days to find funding for fixing up old properties, Stenson said.
The federal Department of Housing and Urban Development was the centralized place to turn to for grants. Since the mid-1980s, when the federal government began to give cities and states access to federal grant projects,
Stenson has had to keep up with the changing programs.
"Its like any other business if you're going to get involved in any of the government financing programs," he said.
"You probably don't want to dabble in it. You either do a lot of it or you don't do any of it because they are fairly complicated."
"I do the most traveling," he said. "We use a lot of voice-mail and e-mail and good old-fashioned teamwork." |
