Upmarket changes at Richfield complex spark federal lawsuit

One of Minnesota's largest apartment complexes just moved upscale — and right into a federal lawsuit alleging housing discrimination.

More than 30 current and former residents of the Concierge apartments filed a class-action suit Monday in U.S. District Court, alleging that owners of the 698-unit Richfield complex have violated fair housing laws in their attempt to take the development upmarket.

The complex at Penn Avenue S. and W. 76th Street was bought last year by Crossroads Apartments LLC and is managed by Soderberg Apartment Specialists, a company focused on turning around troubled properties. Both businesses are named as defendants in the lawsuit. The complex previously was known as the Crossroads at Penn.

After taking over last year, Soderberg immediately began a multimillion-dollar renovation of the property, including granite countertops, a golf simulator and a pet spa.

According to the lawsuit, Soderberg also raised rents by up to 30 percent, required a minimum credit score of 625 and an income of three times the rent, limited residents to two people per apartment, and rejected tenants who receive government assistance such as Section 8 housing vouchers.

"Defendants' actions violate the Fair Housing Act … by seeking to remake the Concierge tenant population in ways that will predictably reduce the population of protected-class tenants," including children, people of color and people with disabilities, the suit said.

Jim Soderberg, president of Soderberg Apartment Specialists, did not return calls seeking comment. In an interview last fall, Soderberg said the renovation of the complex "will have a more positive impact on Richfield than the Best Buy headquarters.

"When you get to the point where things are so run down, you attract undesirable residents," he said. "You get to the point where good, responsible people don't want to live in these apartments."

Linda Soderstrom, a plaintiff in the case, has lived at the complex for more than five years. Her lease runs through Oct. 1. At age 66, she's "proudly poor in retirement" after spending years as a Hennepin County foster parent and day care provider for more than 60 special needs children who were damaged in the womb by drugs or alcohol.

Soderstrom pays $233 of her $750 rent and receives a housing voucher through the Section 8 program to cover the balance.

"I have paid my dues. I have worked for this county. And I'll not be treated as a poor person, or some example of an impoverished or lazy or usurping member of society," she said.

"I think people who hate Section 8 have heard things that aren't true," Soderstrom said. "It's not a family of 10 punching holes in the walls. It's often single people. It's just a program to pay the rent."

The size of the Concierge gives it outsized importance in the Twin Cities market for affordable housing, said Eric Hauge, a housing advocate with Home Line. More than 2,200 people lived there under the previous owner, and the Concierge was considered a "deeply affordable" housing option, one that was within reach for some of the most needy people.

"This is such a substantial-sized property — it houses something like 1 in 17 Richfield residents," Hauge said. "The vacancy rate of non-luxury units right now is below 2 percent. With such a low vacancy rate, it means that residents of the [Concierge] that are being displaced will have difficulty finding new housing.

"There are a variety of ways that he could go about doing what he wants to do to this property, but in a way that's not discriminatory," Hauge said. "We as a society have decided to closely regulate rental housing. The laws this complaint is focused on have been around a long time."

John Reinan • 612-673-7402