PPL sells Park Crossing Apartments amid affordability crisis

In a recent government meeting, discussions centered around the future of the Park Crossing Apartments, a 19-unit building constructed by Project for Pride in Living (PPL) in 1991. The property, located at the intersection of Energy Park Drive and Raymond Avenue, has been owned and operated by PPL for over three decades, with all rents currently restricted to 50% of the Area Median Income (AMI).

PPL has faced financial challenges in recent years, operating the property at a loss and exhausting its reserves. As a result, the organization has decided to sell the building to a new ownership group led by Joe Hughes and Judd Finlon, who have committed to maintaining the building's affordability. However, both PPL and the new buyers have determined that the current rent structure at 50% AMI is no longer sustainable.

To address these challenges, PPL has requested to increase the affordability threshold from 50% to 60% AMI. The new owners plan to assume the existing Housing and Redevelopment Authority (HRA) loan, which has a balance of approximately $878,000, and extend its terms through September 2029. This adjustment would add an additional five years of affordability to the project.

As part of the transition, PPL has offered to assist current tenants in relocating to other affordable housing options within its portfolio, covering moving expenses and providing relocation services. A notice was sent to all households on August 23, informing them of the sale and upcoming rent increases, with a 45-day decision period for tenants to choose whether to stay or relocate. The deadline for tenants to submit their decisions is October 7, and they must be relocated by December 31, 2024.

Leslie Seberg, Senior Director of Asset Management at PPL, highlighted the organization's efforts to communicate with tenants and facilitate the relocation process. Currently, six of the 19 units are vacant, and while some tenants have expressed a desire to stay, others are considering moving to different properties within PPL's portfolio, which includes options in St. Paul and a new building set to open in St. Louis Park.

The proposed rent increases will see one-bedroom units rise from approximately $1,165 at 50% AMI to about $1,398 at 60% AMI, while two-bedroom units will increase from $1,397 to $1,670, and three-bedroom units from $1,615 to $1,938. The new owners plan to charge 95% of the maximum rent, ensuring that the property remains affordable for its residents.

The meeting underscored the complexities of maintaining affordable housing in the face of financial pressures, while also emphasizing the commitment to support existing tenants during this transition.