A proposed project called Parkway Commons would demolish dozens of units of naturally occurring affordable housing, leading to questions about how to provide enough replacement units to meet newly revised St. Louis Park city rules.

Sela Group, which developed Parkway 25, 4015 County Road 25, has proposed a development of 191 multi-family apartment units in three buildings near the company’s new building along Glenhurst Avenue. To further the plan, the company has bought 12 nearby properties. The company also plans to rehabilitate two existing apartment buildings, one with six units and one with eight units, which are south of West 31st Street.

The overall project area contains 55 units of naturally occurring affordable housing, 41 units of which would be demolished under the plan. The properties include commercial, single-family, duplex and multi-family buildings, according to a city staff report. Except for the two apartment buildings that would be renovated, the properties would be replaced by three buildings ranging from four to seven stories in height.

The St. Louis Park City Council updated its inclusionary housing policy April 15 to require developers to, at a minimum, replace each naturally occurring affordable housing unit that is removed through redevelopment projects with new units that are considered affordable.

With 191 units planned for the proposed three new buildings, the new city rule would require a final total of 55 affordable units across the three new buildings and the two existing apartment buildings that would be rehabbed to match the current levels of naturally occurring affordable housing on the site. The developer, in exchange for keeping the 14 units at the two rehabbed apartment buildings at affordable rates, has asked the city to lower the required number of affordable units overall by 14, for a total of 41 affordable units instead of 55 affordable units.

The developer offered to help current tenants relocate to other affordable rental units owned by the Sela Group, according to the city staff report.

“The developer would find similar apartments with similar rents, and would provide financial assistance for relocation costs,” the report states.

The developer would begin building the first new building and rehabbing the two existing buildings this year, according to the report. A second new building would be built in 2021, with construction on the third building slated for 2023 and 2024. The new buildings would look similar to Parkway 25, with brick, stone and metal panels resembling wood. The existing buildings would get new paint, exterior materials, roofs, landscaping and updates to interior common areas.

Although Sela Group has not made a formal application, members of the city council reviewed the plans at an April 22 study session.

“Overall, it was very positive,” Planner Jennifer Monson said. “They’re supportive of higher density in this area and having a more neighborhood, community feel.”

The biggest concern has been the potential loss of naturally occurring affordable housing, Monson said.

She noted that Sela Group could rehabilitate the two existing apartment buildings already without council approval and could raise rents to levels no longer considered affordable. To define naturally occurring affordable housing, the city uses a definition of rents that are affordable to households making 60 percent or less of the area median income.

As part of the requests aimed at reducing the required number of affordable housing units in the project, the developer suggested dedicating units in existing buildings the group owns elsewhere in the city as affordable units as an alternative, according to Monson.

“Council had some push-back on that,” she said. “They would prefer all the units be located in the same area.”

The council did like that the project would be located about a half a mile from both the Beltline and West Lake Street light rail stations, Monson said.

“They’re supportive of the slightly higher density because it is not adjacent to single-family neighborhoods,” she said.

Sela Group has been exploring the redevelopment of single-family rental homes near Inglewood Avenue and West 31st Street as well but had not acquired all the homes necessary, so that phase was not included in the proposal presented to the council, according to Monson. Few other single-family homes exist in the area.

Council views

Meeting minutes from the council work session indicate that Councilmember Margaret Rog pointed out that 44 percent of the city’s residents are renters and that the areas where they live are neighborhoods, too. She asked about congestion in the area, prompting Dean Dovolis of DJR Architects to reference plans for trails, sidewalks, green space and landscaping.

Councilmember Rachel Harris observed that St. Louis Park does not have much affordable housing within walking distance of amenities like planned light rail transit and shopping, according to the minutes. Councilmember Thom Miller agreed, adding that the area should be as affordable as possible, contributing to affordable housing throughout the city instead of in pockets.

Councilmember Anne Mavity, who noted the city’s inclusionary housing policy calls for affordable units that look the same as market-price units, asserted that the affordable units approved for properties should be a part of the developments under consideration for approval at the time. She suggested the Sela Group could build higher buildings to allow for more affordable units and that the city could consider reducing parking requirements given the proximity to light rail transit.

Mayor Jake Spano said he is reluctant to make exceptions to the policy for the developer and said he does not want to push affordable housing to other buildings or parts of the city

The council members generally agreed that they support the Sela Group’s redevelopment concept, are willing to consider rezoning and other changes and could explore providing financial assistance through tax-increment financing. However, council members concluded that the replacement requirement for affordable housing units would require more discussion.

“We’re waiting to see how they will address the council’s concerns for the one-to-one replacement and see if they move forward,” Monson said.

A representative of the Sela Group did not return a call seeking comment.

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