St. Paul approves sale of Penfield Apartments

St. Paul officials signed off Wednesday on the sale of the city-developed Penfield Apartments to LaSalle Investment Management, though exactly how much the city will make from the deal is still up in the air.

LaSalle initially offered to buy the downtown building for $68 million in cash, which would leave the city with a $7.7 million profit. But on Wednesday St. Paul Housing Director Patty Lilledahl said the company has presented another option, which would involve assuming the city's U.S. Department of Housing and Urban Development-insured mortgage for the building. Previously, the city planned to repay that loan using earnings from the sale.

Under the second option, the city would net $250,000 more than anticipated, Lilledahl said. If LaSalle is not approved to assume the mortgage by August 29, then it could pay the $68 million cash offer or decide not to buy the complex and forfeit a $5 million safeguard, she said.

City Council President Russ Stark noted he originally voted against the city's development of the high-end apartments. But he said he's happy with the outcome of the controversial decision.

"I'm thrilled that it worked out the way it did and that we have this great offer on the table, and that it's going to end up being a really good investment for the city," Stark said.

A lot of people were interested in purchasing the Penfield, Council Member Amy Brendmoen said.

"It speaks to the market in St. Paul," she said.

Jessie Van Berkel • 612-673-4649