Low-cost housing pitched for key Richfield corridor

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Like other metro-area cities, Richfield has identified a need for more affordable housing, larger rental units suitable for low-income families, and investments in key corridors. A local developer’s pitch for a city-owned site in the heart of town could check all three boxes.

JO Companies, a Twin Cities-based, Black-owned company, is floating preliminary plans for a $21.4 million, 42-unit apartment building on a site that includes a vacant HRA-owned property 6501 Penn Ave. S., an underused stretch of land on the busy Penn Avenue corridor.

“This is really our vision: to make sure that we can deliver a high-quality building that is effectively going to revitalize this site,” JO Companies founder and owner Johnny Opara said at a public meeting this week.

The Penn Station proposal, which is still in its early stage, would create homes for households at 30% or less of the area’s median income, and help the city meet its goal to “maintain Richfield as an affordable place to live,” according to a city staff report.

Richfield policymakers heard the developer’s pitch Monday night during a joint meeting of the City Council, HRA and Planning Commission. Though the panel didn’t take formal action, the city leaders reacted warmly to the proposal.

Julie Urban, Richfield’s assistant community development manager, said the meeting was a chance for the developer to introduce himself and explain his vision.

“The feedback was positive,” Urban said in an interview Tuesday. “They liked what he had to say. They like to see investment in important corridors like Penn.”

At the meeting, policymakers gave the proposal high marks for bringing more affordable housing options to the city, including three- and even four-bedroom units. Those larger units are hard to find in the city’s existing multifamily housing stock.

Some of the panelists said it would be a plus to have a commercial use on the ground level to liven up the area, which sees robust pedestrian traffic. Others said retail would be nice but isn’t essential.

Opara said he was open to the idea of a mix of uses, but he cautioned that a commercial component would complicate the financing process.

“There’s a lot of uncertainty to try to combine those financing structures,” Opara said at the meeting. “However, we are definitely not opposed [to a mix of uses]. At the end of the day, we want to activate that first floor.”

Opara added that his team, which includes Pope Design Group, would be able to activate the first floor with high-level urban design.

The would-be construction site has been on the city’s radar for years.

In 2018, the HRA purchased the property at 6501 Penn Ave. S. and later demolished a vacant auto parts store there to make way for new development. The development site also includes an adjacent tax-forfeited property at 6525 Penn Ave. S.

Another developer has proposed a mixed-income project for the site with affordability levels ranging from 50% AMI to 80% AMI, the city said. But the JO Companies proposal is appealing in part because it would create more deeply affordable homes.

Four years ago, another developer proposed a mixed-use development at 6501 Penn Ave. S. and 6504 Oliver Ave. S., but that plan fell through for lack of financing.

JO Companies plans to apply for Low-Income Housing Tax Credits as a funding source. A funding decision could come in December, but it’s “rare” for a development to receive an award the first year, so “moving forward with this development could take years,” the staff report notes.

If the developer moves forward, next steps include submittal of an application to the HRA for financial assistance, review of the application by the HRA’s financial consultant, and HRA consideration of a preliminary development agreement.

Construction could begin as soon as fall 2025.

JO Companies’ development portfolio includes The Hollows, a 62-unit workforce housing project at 520 Payne Ave. in St. Paul, and Wangstad Commons, a 54-unit development under construction at 61st Avenue and Brooklyn Boulevard in Brooklyn Center.

Opara is also working with Sherman Associates on The Heights, a 112-acre redevelopment of the former Hillcrest Golf Course in St. Paul. JO Companies’ role includes delivering 199 homes in phase one and 80 to 90 homes in a second phase.

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