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Former tenants of a 698-unit apartment complex in Richfield and their landlords reached what affordable-housing advocates are calling the largest settlement of its kind in the nation.

The settlement resolves a housing discrimination lawsuit filed in federal court in 2016 alleging the owners of the Crossroads at Penn — now Concierge Apartments — broke the law when they renovated the complex for an upscale market. U.S. District Judge Ann Montgomery granted preliminary approval of the settlement Thursday.

"The settlement sends a big message to developers that when they go too far with plans to upscale … tenants are going to stand up for their rights," said Tim Thompson, an attorney with the Housing Justice Center, a St. Paul-based firm representing the tenants.

Concierge owners Jim Soderberg and MSP Crossroads Apartments must pay $650,000 to the plaintiffs, including tenants displaced by Concierge Apartments, according to court documents. They must also update the screening criteria for accepting new tenants.

The settlement is likely to be finalized next January, Thompson said.

Hundreds of low-income and minority tenants were forced from the Crossroads at Penn complex when Soderberg bought the property two years ago, upgrading apartment units and spiking rents. The lawsuit claimed the owners violated the federal Fair Housing Act by making changes that disproportionately affected minorities, the disabled or those with children.

Soderberg in a statement said they "deny that any of our conduct regarding the Concierge property violated the law, and stridently maintain our belief that we would have ultimately prevailed in the litigation."

The group of displaced residents protected by federal law will get $290,000 of the settlement. It is unclear just how many residents will share in the award, as they must first file claims.

Linda Soderstrom, 67, a former Crossroads resident and class representative in the suit, said she was excited about the outcome.

"It will offer the people who qualify some retroactive relief from the cost simply of moving," she said. "We have to encourage everyone to apply."

For Maria Johnson, 35, another class representative, the compromise felt like bittersweet closure.

"I just wanted to make sure that we all got a little bit of justice," she said. "It's a good ending to the chapter, but I think there will always be residual feelings and a little bit of anxiety."

The rest of the settlement award would be split up between legal expenses and remaining plaintiffs, including class representatives and HOME Line, a local tenant-protection group. At least $200,000 of the funds would be put in the NOAH Impact Fund, an account used to preserve affordable housing run by the Greater Minnesota Housing Fund.

Concierge's owners will have to eliminate minimum income requirements for tenants. They also agreed to loosen restrictions on applicants with prior arrests or evictions and to accept a variety of identification options.

Former Crossroads tenants have about 60 days to apply for some of the settlement. HOME Line set up a phone line at 1-833-924-6400 to check eligibility.

Miguel Otárola • 612-673-4753