St. Cloud is poised to get some new housing stock as plans take shape for a 162-unit, market-rate apartment project in the city, a significant investment at a time when some developers are putting the brakes on new construction.

Local developer Dave Puchalla hopes to break ground as soon as this spring on the St. Cloud project, the third and final phase of a development along County Road 74 near 41st Avenue. The first two project phases offered a combined 209 multifamily units, according to city documents.

On Monday, the St. Cloud City Council unanimously approved plans for the project, which will include 23 studio, 32 one-bedroom, and 107 two-bedroom apartments. The Planning Commission previously recommended approval by a 5-0 vote.

“Basically, it’s a done deal,” Puchalla said Thursday.

The approval comes at an otherwise slow time for apartment construction in the Twin Cities and beyond. Hamstrung by rising interest rates, developers have been holding back on big projects. Through October, among projects with 60 or more units, planned units in the 13-county metro area are down 63% from 2022, according to the Keystone Report.

Puchalla, for his part, is ready to move forward soon.

“I see the future as being better. And I’m not going to wait for the future to approach me. I’m going to go with my hunch,” Puchalla said in an interview. “[Interest rates] are flattening out. I am looking two years down the road, saying they are going to be better.”

Demand for housing, meanwhile, remains strong in St. Cloud. A 2019 study from Maxfield Research indicates demand for a wide range of dwellings across the board in the city, and Puchalla said the city still needs “thousands” of new units by 2030.

“St. Cloud needs housing. This is a drop of what we really need to keep the young people here,” he said at the City Council meeting.

Council members gave the project good reviews.

“I wanted to commend you on the buildings you are putting up – very attractive,” Council Member Dave Masters said. “When I come down on Highway 15 or down [County Road] 74, I am really impressed with the look, the colors, the construction and everything. It looks like a beautiful place.”

Asked how the existing phases are doing, Puchalla said the 110-unit first phase is open and full, and the remaining phases are filling up.

“Demand is there. … It’s working out really well and I’m not having any issues,” Puchalla said.

One of the few concerns was traffic impacts on County Road 74 in the project area. Council Member Mike Conway said at the Nov. 6 meeting that traffic is becoming “a major issue” in the area, where there is a “large concentration” of apartments.

“We need the housing,” Conway said. “My concern is, County Road 74 is not ready for this much development, especially considering, within a quarter of a mile down there, the Boulder Ridge Golf Course itself has big signs saying, ‘for sale, multiple units.’ And they are ready to sell that property and put more housing of some sort on that road.”

Matt Glaesman, St. Cloud’s community development director, said that road currently sees about 5,000 trips per day and the new building would create about 600 to 800 more trips. A two-lane roadway typically carries 10,000 trips or more before hitting “unacceptable” levels of service, he said.

Puchalla isn’t the only housing developer with big plans in St. Cloud.

In 2022, St. Cloud business owner and developer Larry Klein told Finance & Commerce about his plans to redevelop a 42-acre site at 4040 33rd St. S. with new housing, commercial and recreational uses, and mature green space.

An environmental assessment worksheet released in February 2022 said the project would offer 353 residential units — including 204 assisted living units — in four buildings with a combined 170,000 square feet of space.

“Vacancy rates are pretty tight for St. Cloud … and the rents are definitely up over a period of time here,” Klein said at the time.

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