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“Undesirable” – Community Owner Sues City for Fraud

August 22nd, 2018 Comments off

 

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I am haunted on a daily basis that I have blood on my hands because of the fact that I was drawn into this unwittingly and duped by the city,” said Brad Hoyt, developer of Lowry Grove, in St. Anthony, MN.

 

Hoyt’s company, the Village, bought and closed Lowry Grove and is now suing the city of St. Anthony for fraud and civil conspiracy.” The Star Tribune’s Hannah Covington said, the suit “alleges that city officials induced the company “to close the mobile home park in order to rid the City of low-income, multicultural citizens that the City deemed undesirable.””

Hoyt says he was led to believe that he would get tax-increment financing (TIF) support to turn the mobile and manufactured home community into higher density multi-family housing.

The video below provides some context from last year, but explains some of the issues being raised in this new suit.

 

Lowry Grove drew regional and national attention. A bill was floated by Minnesota Democratic Congressman Keith Ellison that proposed a path to save some communities like Lowry Grove.  The bill called for incentives to owners who sell their communities to residents, instead of to developers or other investors.

Kinzler, Gallagher on Congressman Keith Ellison, the MH Industry, and Manufactured Home Communities

 

A prior report on this same case has been tracked for years by the Daily Business News, with one of those prior reports linked below.

Federal HUD Fair Housing Discrimination Complaint Case Update 

 

City Fights Back

City Manager Mark Casey statement said the city plans to fight the “ridiculous lawsuit.”

The city sees this lawsuit as completely without merit,” said Casey. “Mr. Hoyt apparently made a horrible real estate transaction that displaced hundreds of honorable people and now wants to shift his losses onto the city, which is wrong and irresponsible.”

Hoyt’s federal lawsuit was filed Monday. It alleges the city of leading the Village to purchase Lowry Grove for $6 million in 2016 without intending approval of the high-density multifamily housing project which Hoyt planned to replace the community.

Enough is enough,” Hoyt said Tuesday. “This is about a city … acting together in a conspiracy to commit fraud, the goal being to use us to rid them of the nonwhites and low-income people and make sure they don’t come back.”

A 712 unit proposal for multi-family housing was turned down last October. Hoyt redid the proposal, apparently based upon city feedback, for 430 units instead. When The Village submitted the lower-density plan, that was approved in March, based on “promised TIF” assistance, according to the lawsuit.

During a May working session, a financial consultant’s memo advised city leaders that “the projects could be developed without any TIF assistance from the City,” per city records.

Hoyt said “They double-crossed us again.” He has sued other metro area cities over development projects, said that prompted the lawsuit.

 

The Lost Fight

Residents tried to keep Lowry Grove open, including a complaint that the plan broke state law. That action was dismissed.

As industry professionals know, when an older community is closed, pre-HUD Code mobile homes and some older HUD Code manufactured homes may be hard to move for a practical or economic reasons.

Some residents lost their homes. Covington said “Some, like Jason Mitchell, ended up homeless.”

I wandered around downtown not knowing what I was going to do,” said Mitchell, 40, who now lives with his mother in a mobile home two hours from the Twin Cities. “I think they are quite literally trying to eradicate poor people and Hispanics from this neighborhood.”

It was mostly lower-income people. I think the city just didn’t want us there anymore,” said Bob Wargin, 67, who was a 26 year record. “It was probably in their eyes a blight on their beautiful little St. Anthony community.”

Frank Adelmann took his own life days before the eviction deadline.

Hoyt and others feel duped and manipulated. “I am haunted on a daily basis that I have blood on my hands because of the fact that I was drawn into this unwittingly and duped by the city,” he said Tuesday.

The case is a reminder of other troubling ones in various parts of the nation. Some of those are reflected in the related reports, linked below. ## (News, analysis and commentary.)

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Related Reports:

Hundreds of New Manufactured Home Communities Opened, But How Many Have Closed? Industry Research Result$

Federal HUD Fair Housing Discrimination Complaint Case Update 

 

Suicide, Sadness and Questions on How the Manufactured Home Industry Should Address Community Closures

Different Kind of Community Closure, Continues Grabbing Headlines in Mainstream News

‘Tip of Iceberg’ – Rick Rand; Marty Lavin, Communities have ‘No Confidence’ in Manufactured Housing Institute, New National Trade Group Announced

Manufactured Home Communities, Retailers, Developers Face Disruptive, Troubling Trend

UPDATE: Appeals Court Ruling in MHC Case

May 12th, 2017 Comments off

In a follow up to a story the Daily Business News originally covered in December, a Minnesota State Appeals Court ruled in favor of the new owners of the Lowry Grove Mobile Home Park in St. Anthony, in an ongoing dispute over the site’s future.

The story began back in September, when a group of Lowry Grove residents sued to block the sale of the property, testing a state law that said residents had 45 days to match an offer made on the property.

Homeowners partnered with Aeon Management, a Minneapolis based non-profit management company, to make a matching $6 million offer on June 10, the day of the deadline.

The offer was rejected; the residents sued, and Judge Joseph R. Klein ruled against the residents, writing in part that the statute “…does not grant them an unfettered ability to purchase the park [sic]. They were not deprived on that right because it was never, in fact, granted to them.

According to MPR News, while the appeals court rejected the claim, it did say said the community residents may be entitled to more money beyond the cost of their homes.

Residents did receive news in December that the deadline for closing the community has been pushed from March 15 to June 30, 2017, to allow children in the community to finish out the school year.

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The ruling is a win that provides finality for all parties,” said Traci Tomas, Vice President of The Village, LLC, the new owners of the community.

Interestingly, Alan Arthur, CEO of Aeon, also sees good in the ruling.

The court said residents may be entitled to more compensation,” said Arthur.

Alan Arthur. Credit: MPR News.

Residents will use the compensation process to keep pushing for a purchase and a Minnesota Supreme Court appeal is a possibility. We have options that we will be weighing with the residents and with our attorneys.”

The original story on the Lowry Grove community is linked here.

For more on residents working to purchase their communities, including the Dover Point Cooperative in New Hampshire coming together to buy the Polly Ann Park community, click here. ##

(Image credits are as shown above, and when provided by third parties, are shared under fair use guidelines.)

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RC Williams, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.

Community Gets Reprieve In Closing Case

December 28th, 2016 Comments off

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In a story that the Daily Business News originally covered in September, residents at the Lowry Grove Mobile Home Park in St. Anthony, Minnesota have received news that the deadline for closing the community has been pushed from March 15 to June 30, 2017, the end of the school year.

Per MPR News, word came late in the afternoon on December 22nd, when acquirer The Village LLC announced that it had moved the closure date.

The company purchased the community in June with plans to redevelop it into a mix of apartment buildings and townhouses, which would require approximately 90 households to relocate.

A group of Lowry Grove residents sued in September to block the sale of the property, testing a state law that residents had 45 days to match an offer made on the property. Homeowners partnered with Aeon Management, a Minneapolis based non-profit management company, to make a matching $6 million offer on June 10, the day of the deadline.

The offer was rejected; the residents sued, and Judge Joseph R. Klein ruled against the residents, writing in part that the statute “…does not grant them an unfettered ability to purchase the park [sic]. They were not deprived on that right because it was never, in fact, granted to them.

According to MPR News, residents also filed complaints with the Department of Housing and Urban Development (HUD) under the Fair Housing Act, contesting the sale.

Even though the HUD investigation continues, many residents have still opted to leave the community, with about one-third moving or making plans to move.

For those who remain, and have children in the St. Anthony-New Brighton School District, the extended deadline brings some welcome relief.

During our ongoing conversations with the school district about options to ensure school age children would be able to complete the school year without changing schools, we learned it would be even more beneficial to allow them to remain in their homes through the end of the school year,” said Traci Tomas, vice president of The Village.

We offered to delay the park [sic] closure three months as a way of easing the impact the closure will have on the residents and their children. I am proud that open lines of communication led to this agreement with the residents.” ##

(Image credits are as shown above.)

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RC Williams, for Daily Business News, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.

Battle Over Community Owner’s Rights vs. Resident’s Rights highlighted in St. Anthony case

September 28th, 2016 Comments off

lowrygrovecreditstartribunestanthonycasehighlightsbattleovercommunityownersrightsvsresidentsrights-dailybusinessnewsResidents of the Lowry Grove community in the Minneapolis, MN suburb of St. Anthony lost their bid to block the sale of the property, according to a ruling by a Hennepin County Judge.

We continue working together to save Lowry Grove. We will organize more action,” said Antonia Alvarez, president of the Lowry Grove Resident Association, per the Star Tribune’s report. I understand they are very rich, but we have community support.”

The ruling is a blow to the residents who sued to keep the park open. A state law drafted in 1991 was designed to give manufactured home owners the right of first refusal to buy land in the event it was put up for sale.

paulbradleycredtimhpronewsstanthonycasehighlightsbattleovercommunityownersrightsvsresidentsrights-dailybusinessnewsPaul Bradley, president of ROC USA posed the following question to MHProNews. “How can we promote homeownership and sell new homes on leased land and at the same time close communities?”

Judge Joseph R. Klein wrote, in part, that the statute “…does not grant them an unfettered ability to purchase the park. They were not deprived on that right because it was never, in fact, granted to them.judgejosephkleincreditmncourtsgovstanthonycasehighlightsbattleovercommunityownersrightsvsresidentsrights-dailybusinessnews1

 

This is believed to be the first major legal test of the law.

The owners of Lowry Grove, LLC notified residents in April that they intended to sell the property to The Village LLC, a subsidiary of Wayzata, MN based Continental Property Group, for $6 million. The Village announced that they would close the park in a year and redevelop the 15 acres of land.

Fearing the loss of access to good schools and safe streets, the residents prepared to respond.

Under state law, residents had 45 days to match the offer. Homeowners partnered with Aeon Management, a Minneapolis based non-profit management company, to make a matching $6 million offer on June 10, the day of the deadline.

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Lowry Grove residents protesting.

The offer was rejected.

On June 13, the sale to The Village became final. Aeon Management and Lowry Grove residents sued, arguing that the law, and their civil rights, had been violated.

 

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The Lowry Grove RV park and manufactured home community is on a prime parcel of real estate, as this Google earth image reflects.

When the statue was passed, said Judge Klein, the intent was clear.

Should a park be sold contrary to [the law] the only remedy the residents in the park have is to sue under a violation of this law for something besides ownership of the land, said Judge Klein.

Explaining further, Klein wrote that lawmakers were balancing competing priorities when passing the statute, giving manufactured homeowners a tool to protect their homes while not overtly interfering with park owner’s ability to sell their property.”

tomastracicreditiremmnstanthonycasehighlightsbattleovercommunityownersrightsvsresidentsrights-dailybusinessnews1We are pleased with, but not surprised by, Judge Klein’s ruling,” said The Village Vice President Traci Tomas in a written statement. “From the beginning, we’ve realized that this is a difficult situation for the residents. That has never been something we’ve taken lightly.”

Tomas has also denied violating the state statute, countering that residents didn’t meet all the criteria. She also shared where the Village’s focus is.

Right now, we are focused on those who have expressed a desire to complete their move before winter sets in,” Tomas said. “We are working with the City of St. Anthony so residents can submit applications to the Minnesota Manufactured Home Relocation Trust Fund for financial assistance that will help with their relocation.”

jimayottecreditmhpronewsusersrcdesktoppaulbradleycredtimhpronewsstanthonycasehighlightsbattleovercommunityownersrightsvsresidentsrights-dailybusinessnewsJim Ayotte, Executive Director of the Florida Manufactured Housing Association (FMHA), provided commentary on a similar situation with the Denver Meadows community in Aurora, CO in his column on MHProNews. “It costs money to create affordable housing, which local governments don’t have, and it is more politically expedient to put the screws to a business owner and get favorable press for protecting a group of economically challenged homeowners.

This is unfair to the private sector and, quite frankly, should be unconstitutional,” says Ayotte. “What that said, it is the responsibility of all parties to do the right thing.”alanarthuraeoncreditmprnewsstanthonycasehighlightsbattleovercommunityownersrightsvsresidentsrights-dailybusinessnews1

Aeon Management CEO Alan Arthur commented, “I am sad that our world seems to value bottom line financial returns more than it does people.” Aeon is also exploring other legal options for Lowry Grove residents.

The struggle over community owner’s property rights vs. land-lease community resident rights continues, and the Daily Business News plans to track this story to its conclusion. ##

(Editor’s Note: Equity LifeStyle Communities Chairman Sam Zell’s view on property owners rights is published exclusively in a report on MHProNews, linked here.

(Image credits are as shown above.)

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RC WIlliams, for Daily Business News, MHProNews.

Submitted by RC Williams to the Daily Business News, MHProNews.

Minn. Attorney General Files Brief to Halt Sale of Community to Developer

August 5th, 2016 Comments off

Minneapolis__Lowry_Grove__MHVillage__credit postedDailyBusinessNewsMHProNewsUpdating a story MHProNews last posted July 5, 2016 regarding attempts by residents of the Lowry Grove manufactured home community (MHC) in north Minneapolis to forestall the sale of their community because the owner did not offer them first right of refusal before selling it to a developer, the Minnesota attorney general filed a friend-of-the-court brief arguing that the owner violated the law.

Manufactured housing offers many people the only realistic opportunity to become a homeowner,” the brief said. It added that the June sale to the developer “shows subterfuge and a design to circumvent residents’ rights.”

Lowry Grove was sold to a developer in June who intended to close the community and develop the 15 acres, uprooting the 95 families who lived there. Aeon, a nonprofit that focuses on affordable housing, agreed to match the $6 million selling price on a Friday, but by Monday the community’s owner had finalized the deal with the developer. The residents filed suit, arguing their right to buy the community had been denied, as mprnews  reports.

While the new owner had offered financial assistance beyond what the law requires, Attorney General Lori Swanson nevertheless said the new owner should be prevented from closing the community. “Any other conclusion would allow developers to circumvent residents’ rights and continue the eradication of manufacturing housing in Minnesota,” said the amicus curiae brief.

Swanson’s decision was also influenced by the consequences of decimating the supply of affordable housing in the area. “We know that in the Twin Cities we have a real lack of adequate supply of affordable housing, and mobile home parks can be a good form of affordable housing,” she said.

Further, Swanson said to her knowledge this law of first right of refusal has never been tested before in the state.

Traci Thomas, vice president of The Village, the company that purchased the community, said she has already worked with four homeowners to leave Lowry Grove, and that plans for another eight to move are pending.

The case is set to go before a judge at the end of August. ##

(Photo credit: MHVillage–Lowry Grove manufactured home community)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J Silver to Daily Business News-MHProNews.

Modular Home Development may Result from a Housing Incentive Program

March 31st, 2016 Comments off

modular  shutterstock  creditFollowing an unanimous vote by the Village Board of Trustees, Mayor Trevor Bissey of Clay City, Illinois announced the Clay City Residential Housing Incentive Program (RHIP), which will enable owners and developers wanting to build new homes or site modular homes in the Village, to utilize several property and sales tax incentives.

The Village has acquired a number of lots that could be for single-family homes including modular homes as advocatepress tells MHProNews.. For ten years the Village of Dieterich has been implementing a similar plan that has resulted in significant residential development. Clay City intends to be more aggressive in its approach to upgrade the housing stock as well as increase the student population.

The RHIP can work at several different levels, and can include the Village donating land for a home, offer a grant for a a new home, provide a sales tax exemption on building materials and offer a property tax rebate on future taxes.

Through the Village’s Tax Increment Financing District and Enterprise Zone program, Clay City can provide over $30,000 for a project. The Village Plan Commission is looking forward to the development it can induce. ##

(Photo credit: shutterstock–modular home being sited)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.