Despite raising $6 Million to Save Homes, Residents Fight On After “Illegal” Sale of Property
By: Cirien Saadeh, UpTake Reporter
Antonia Alvarez expected to celebrate both her birthday and saving her home when she woke up this past Monday, but she went to bed knowing that she would have to fight on in the struggle to save her community. Alvarez is a resident of the Lowry Grove manufactured home communities located in St. Anthony Village. She and fellow residents have been fighting to save their community after they received notice in late-April that the park would be sold to Wazyata-based Continental Property Group (CPG) for $6 million.
“Phil Johnson sold the land to Traci Tomas [President of Continental Property Group] this morning. This was illegal. We are ready to go to the courts, we’re organizing, and we’re protecting the land,” said Alvarez to fellow residents during what was supposed to be a celebration of saving the park.
Residents have been hoping to use a little-known state statute, the “right of first refusal,” to save their homes. The statute has never been used successfully to save a manufactured home community in Minnesota before, but residents at Lowry Grove are hoping to be the first. The “right of first refusal” gives homeowners in manufactured home communities the opportunity to counter an offer to buy the land under their homes under the terms and conditions set forth in the original offer.
The residents of Lowry Grove own their homes, they do not own the land underneath their homes. The land was owned by Parklord Phil Johnson. Johnson’s original announcement of sale gave the residents just 45 days to raise the $6 million needed to purchase the property.
Land Owner “Ignored” Law Says Attorney
“The owner just ignored the statute. Well, he just came up with some excuses. But he basically ignored the statute,” said Jack Cann, an attorney with the Housing Justice Center of Minnesota.
According to Cann, residents should sue and would likely win. Cann argues that Johnson’s sale to CPG, despite the fact that the residents had successfully lined up another owner interested in purchasing and maintaining the property, was illegal.
“It would be our position that the owner violated the clear provisions of the statute so there’s got to be a legal remedy of some sort. There will be a lawsuit. One way or another, I think there’s a decent shot, of residents getting to exercise the right of first refusal,” said Cann.
Johnson argued that the offer made by residents and Aeon, a non-profit developer and owner of affordable housing in Minnesota, was not exactly similar to the offer made by CPG. Aeon was founded in 1986 in order to support those struggling to afford housing by purchasing affordable housing property, building, and/or managing it as landlord.
Johnson argues that Aeon changed the closing date of the sale without first discussing it with Johnson. Aeon had pushed out the closing date “more than five weeks,” according to Johnson, from June 13th, the original closing date, and the day that Aeon had sent Johnson a purchase agreement for the land. Essentially, Johnson had a choice between a guaranteed $6 million, and a threat of a lawsuit, on June 13th or a likely $6 million 45 days later.
Johnson also said that Aeon’s purchase agreement would damage Lowry Grove financially. This is because, he said, Aeon might not be able to raise the $6 million needed to counter CPG’s offer and at the same time the original developer might back out of their offer to purchase the property, which would leave the company that owns the land at Lowry Grove out $6 million.
Further, Johnson argued that the 51% of resident signatures included with the purchase agreement included multiple people in a single home and home renters.
“Now it’s in the hands of the attorneys and the court of law. We don’t know what that means exactly. We think we’re on the side of right and we’re going to continue to try and figure that out on behalf of the residents,” said Alan Arthur, CEO and President of Aeon.
Antonia Alvarez and Alan Arthur explain to residents that Johnson sold the park to CPG, despite resident organizing, and the next steps they would be taking to save the park and counter the sale.
During a mid-May visit to the Tomas’s office, Tomas noted she would not give the residents longer than 45 days to raise the money and the only way she would not purchase the property is if they raised the money to counter her offer. CPG has plans to demolish the homes on the property, many of which cannot be moved, and raise the land in order to build an apartment complex.
“I don’t want to give any false hope that the park is not going to be closed,” said Tomas during that mid-May meeting.
Residents are not going down with a fight, however.
“We’re going to fight to save the park. I’m not leaving my home, we’re not leaving our community. They’re going to have to fight to take me down. I’ll stay in my house until the very end and so will many of the other residents here,” said Luann Zappa, a 4 year resident of Lowry Grove.
Update 6/28/16: Aeon and Lowry Grove residents filed a lawsuit on June 27th in the Hennepin County District Court against the current owners of the Lowry Grove manufactured home community. The lawsuit claims the current park owners closed on the sale of the park with Continental Property Group (CPG) despite a legitimate offer by Aeon countering that offer. Aeon says the transaction between the former owners of Lowry Grove and CPG should be voided.