One of the biggest homebuilders in the Twin Cities metro is leaving.
New Jersey-based K. Hovnanian said this week it would close operations in several large U.S. markets, including the Twin Cities, Raleigh, N.C., Tampa, Fla., and San Francisco.
The closures are part of an effort to lift profits for the publicly traded company by paying down debt and focusing its investments in its remaining markets, according to a statement by Ara Hovnanian, its chairman and chief executive. Calls to the company were not returned.
The company for years has been one of the biggest builders in the region, according to the Builders Association of the Twin Cities. In 2014, the company was the 10th-largest with 131 housing units worth $42.4 million.
The company reported a sizable portion of its $16.7 million net loss in its fiscal quarter ended Jan. 31 to a land sale in Minnesota. It took $11.7 million in land-related special charges during the quarter, which it said was "primarily related to land held for sale in Minnesota."
Hovnanian now has six "active selling communities" in the Twin Cities, and will exit this market via a "bulk sale" of its holdings, company executives said during its earnings call.
"Rather than focusing on additional revenue growth beyond 2016, we now plan to focus on deleveraging our balance sheet and maximizing our profitability," Hovnanian said in a statement. "We are confident these decisions will lead to continued efficiencies and ultimately improved financial performance."
Two Mpls. projects a go
The Minneapolis Planning Commission approved two major redevelopment efforts in or near downtown this week, helping to clear the way for construction to start in the next few months.
501 S. 8th St.
Kraus-Anderson plans to begin construction in April on its large project — including a new corporate headquarters, a 17-story apartment tower, a boutique hotel, a new Finnegans brewery, innovation lab and event space — on the site of its current offices at the east edge of the central business district in Minneapolis. There will also be a 520-stall underground parking garage.
The latest documents submitted to the city offer a few more design details and tweaks to the block's layout by ESG Architects and Pope Architects.
116 E. Hennepin Av.
Minneapolis developer Schafer Richardson received approval for its six-story apartment and retail project on the site of the Nye's Polonaise Room across the Mississippi River from downtown. The city's consent comes after more than a year of debate and concessions between the developer, historic preservationists, neighbors, city planners and council members.
The 72-unit apartment complex is much different from the developer's original plans for a 29-story building on the site along Hennepin Avenue. Schafer Richardson will preserve the two most historically significant structures on the site and will incorporate them into the new structure.
Schafer Richardson also plans to incorporate the first electrical car lift in a Minneapolis residential building parking garage. The system adds about 14 spaces to garage, which is both at and below grade, for a total of 70 spaces.
"The 116 E. Hennepin site has unique challenges (existing buildings, shape of site, depth of bedrock, etc.) that limit the ability to accommodate enclosed parking in the typical way," said Maureen Michalski, Schafer Richardson's director of development, in an e-mail. "We are excited to offer an innovative system that has worked well in other markets."
In documents filed with the city, the developer included visual examples of the car matrix system from Denver-based Harding Steel.
Kristen Leigh Painter and Jim Buchta
