In four years, the first developer will launch a 62-unit apartment building on Payne Avenue and East Seventh St. Paul Street.

In his previous life, Johnny Opara spent 17 years in intercompany sales for Medtronic, CenturyLink, Cox Automotive and International Paper. The first developer may have just completed his biggest deal ever – convincing the city of Saint Paul to support the $ 18.7 million construction of affordable housing east of downtown.

For Opara, President, Founder and CEO of JO Cos., It’s been a long four years. In 2017, a licensed realtor met with St. Paul City Councilor Jane Prince to discuss potential sites suitable for new housing. Prince offered to vacate the city-owned land near Payne Avenue and East Seventh Street, almost across the street from the Minnesota Music Cafe.

Raised on Rice Street in St. Paul, licensed realtor Johnny Opara spent 17 years in inter-company sales before pursuing a real estate career as president of his own real estate development firm, JO Companies. (Courtesy of JO Companies)

“I thought, wow, 520 Payne is such a phenomenal gate arrangement,” Prince said. “This is the gateway to Payne Avenue, to the East Seventh Street business district. It’s right under the hill from the State University Metro. ”

Opara, a Central High School and University of Augsburg graduate who came to the US from Nigeria as an infant and grew up on Rice Street in St. Paul, drove there that day and then called Prince to confirm he was hooked. “I always say I was raised by Saint Paul,” Opara said in an interview on Thursday. “I visited this place and saw empty ones. I knew exactly what they were going to build. “

CHALLENGING YEARS

Unbeknownst to him at the time, easements, airport routes, cell towers, financial troubles, a recession and a pandemic would put years of potential obstacles in his way.

Some of this was overcome with the help of Prince and City Council President Amy Brandmoon, who went out of their way to introduce him to neighboring property owners, as well as city staff who debated the finer points of financing tax increases.

Opara personally accepted his mission. He recalled moving his father, who had suffered a debilitating stroke that had atrophied half of his body many years earlier, from one affordable housing complex to another. Moving to the best real estate management company seemed to improve his father’s spirits in the weeks leading up to his death in 2018.

“I’m really grateful for the support that the City of Saint Paul has provided to the aspiring developer,” Opara said to seven city councilors on Wednesday during a meeting of the Saint Paul Housing and Renovation Authority. … “This is a transformative project. … I really look forward to the possibility of closing before the end of the year and starting construction. “

He plans to develop “The Hollows” – JO Cos. The inaugural project is on an empty lot that the Housing and Reconstruction Authority has owned for nearly 20 years, in the somewhat inconspicuous area of ​​Railroad Island / Swedish Hollow.

After years of trying to make the numbers work, Opara expects to move forward with a four-story apartment building that will include at least a few “very affordable” one-bedroom apartments that can be rented for less than $ 600 a month, which is rare for new ones. construction. There will be 29 underground parking spaces and 16 ground kiosks on the territory.

In 2003, the city acquired 520 Payne Ave., located across the street from Fire Station No. 4, for $ 655,000 from Standard Truck.

“This place is really in the heart of the city,” Brandmoen said Wednesday, noting that the city has invested in nearby views as well as bicycle access to Railroad Island and improved traffic flow. “This is a phenomenal place and I think it was a kind of hiding place. We did our best to cover this. … This is a big deal. “

FINANCING OF TAX TAXES

The stew or alphabet soup from funding sources that will keep the Hollows up is almost dizzying.

It includes $ 3.2 million in funding for tax increases – about two-thirds of this “pooled TIF funds” are generated outside of the special tax districts, including $ 700,000 from the Spruce Tree Center, Snelling and University Avenues and $ 1.5 million from Carondelet Village in Highland Park. In other words, Hollows will be able to use money that would otherwise have gone towards its own property taxes, as well as TIF revenues from other projects in the city, to cover certain development costs over 25 years.

“TIF can be controversial at times, but I think it’s a really good use of funding tax increases,” said City Councilor Chris Tolbert, who heads the City’s Housing and Reconstruction Authority.

Prince, a frequent critic of financing tax increases, said that building affordable new housing would not have been possible without many different funding sources. “TIF has become a really important piece of this puzzle,” she said.

All 62 units will technically qualify as affordable housing, although housing advocates have pointed out that “affordable” is relative. In 2021, the U.S. Department of Housing and Urban Development (HUD) determined the median household income for a family of four in Minneapolis Street. The Paul-Bloomington Metropolitan Statistical Area, covering 15 counties, was $ 105,000. This is almost double the average family income in St. Paul, which is about $ 58,000.

Hollows is slated to have 32 studios and niches with monthly rentals of around $ 1,100. In addition, 11 one-bedroom apartments will be priced at $ 1,180. The six units, each a two-bedroom apartment, will be priced at $ 1,417. All of these units will be income capped for households earning no more than 60 percent of the median income for the area, which is roughly the $ 63,000 household income cap based on HUD data.

The eight one-bedroom apartments will be priced slightly below 60% of the median income of US $ 1,078, which is considered fair market value.

MULTIPLE UNITS AVAILABLE

The building will also include several units of what is considered “very affordable” housing, a rare feat for new developments. There are five apartments in total, each with one bedroom, priced at $ 590. These five units will target households earning no more than 30 percent of the median income in the area, which corresponds to a household income cap of $ 31,500. City officials and housing advocates welcomed their inclusion, noting that new housing at this lower price proved unaffordable in St. Paul.

On Wednesday, the city council approved $ 3.2 million in both new funding for tax increases and “pooled TIF” dollars for the sale of the vacant lot to JO Cos. For $ 364,900 and $ 9.1 million in housing income bonds issued across the city.

Funding sources will include a low-income housing tax credit, a $ 1 million deferred developer fee, a $ 209,000 Ramsey County grant, and a $ 81,000 Minnesota Department of Employment and Economic Development grant.

“It was not easy to put it together. There were many obstacles related to the site that had nothing to do with (urban planning and economic development) and had nothing to do with Johnny, ”Prince said Wednesday, calling the place ideal for those looking to live in the city. “I’m very excited”.

Opara, who recently joined the board of the Saint Paul District Chamber of Commerce, sees more affordable housing in his future.

Next year JO Cos. Will reapply for low-income housing tax credits to build a four-story condominium complex on 61st Avenue and Brooklyn Boulevard in Brooklyn Center. At Wangstad Commons, 20 percent of branches will offer support services for the homeless and disabled.

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