Memo Minnehaha Oaks Property
C I T Y
o F
HOP KIN S
MEMORANDUM
DATE:
May 1, 1992
FROM:
Honorable MaYOr~nd City Council
. ~. t . t
Tom Harmenlng, Communlty Developmen Dlrec or
TO:
SUBJECT: MINNEHAHA OAKS/MARK Z. JONES PROPERTY PURCHASE
I. BACKGROUND
The City has received a signed agreement from four property
owners from the Minnehaha Oaks Association indicating their
willingness to be assessed for the acquisition of the Mark
z. Jones property, along with a $10,000 check. As the
Council may recall, the acquisition price was established at
$185,000. What this then means is that the amount to be
assessed for the acquisition of the property is $175,000.
Although the Minnehaha Oaks Association has met the literal
letter of the agreement as to the acquisition of the
property, it was staff's and the City Attorney's
understanding that the City would receive at least $30,000
up front from the Minnehaha Oaks Association, with the rest
to be assessed. It was also staff's and the city Attorney's
understanding that more property owners would be involved in
the assessment process than just the four who signed the
agreement.
The City Attorney has expressed concerns regarding the
arrangement which has evolved as to the acquisition of the
Mark Z. Jones property. In particular, the City Attorney
has expressed concerns regarding the placement of very large
assessments on four properties and the position that
mortgage companies may take as related to that assessment.
Attached is a memorandum from Jerre Miller, City Attorney,
which more clearly articulates the concerns which he has.
Mr. Miller has requested that the attorney for the Minnehaha
Oaks Association provide information to him which will
satisfy his concerns. At this point, the attorney for the
Minnehaha Oaks Association has not provided the necessary
information to Mr. Miller. Mr. Miller indicated to the
Minnehaha Oaks Association that if he was not given the
necessary information to satisfy his concerns, that he would
ask that this matter be placed on the City council agenda
Honorable Mayor and City Council
May 1, 1992
Page 2
for May 5th to allow for discussion and direction from the
City Council. As of the date of this memo Mr. Miller has
not heard from the attorney for the Homeowners Association.
II. RECOMMENDATION
At this point, City staff and the City Attorney are not able
to make a definitive recommendation a~ to the steps or
actions which the City Council should take regarding this
matter. In fact, this matter may be entirely resolved prior
to the Council meeting on May 5th and need not be discussed
in any fashion by the City Council. However, staff felt it
appropriate at this time to at least plan for the discussion
at the City Council level.
Presuming Mr. Miller's concerns are not adequately addressed
by May 5th, a couple of alternatives recommended by Mr.
Miller include:
o Rescind the arrangement for acquisition
or
o Amend the assessment agreement to insert:
The minimum amount of cash to be contributed and
by what date and
The homeowners obligation to procure consents to
the assessments from the mortgage companies or an
indemnity agreement.
Attachment
TH04302B
.
K
MEMORANDUM
DATE:
April 30, 1992
TO:
Tom Harmening
FROM:
Jerre A. Miller
Hopkins City Attorney
RE:
Hiawatha Avenue
At your
that occurred
problems that
Mr. Jones.
request, I send you this Memo addressing the concern
to me recently when contemplating all of the possible
could arise from the Minnehaha Oaks acquisition from
The principal concern I thought of was the possibility that an
existing mortgage company could challenge the City's priority by
reason of the assessment on the theory that the property was
voluntarily encumbered in the event a homeowner defaulted. I was
also distressed because the initial contribution was limited to
$10,000.00 when the association had earlier admitted to raising
$54,000.00.
Mr. Jones' attorney has also inquired on more than one occasion
about executing the Land Purchase Agreement by the Council.
For the record, I notified Mr. Heikkila by telephone that this
matter would be on the Council agenda for May 5 unless I received
inn writing from him Consents from mortgage companies encumbering
the property to be assessed or at the least, a description and
amount of the Mortgages and an affirmation in writing on behalf of
the homeowners that Consents were unnecessary because the present
Mortgage balances encumbering the property were minimal.
If this information
will recommend to the
arrangement for acquisition
insert a) the minimum amount
date and b) the homeowners'
assessment from the mortgage c
is not received by the Council hearing, I
Should you have
Council that it either rescind the
or amend the Assessment Agreement to
of as~to be contributed and by what
o i ~tion to procure Consents to the
pan'es or an Indemnity Agreement.
let me know
njj