Sunday, January 10, 2010

Hawthorne Housing Committee Receives Pamiko-Gate Update...

Stock Photo By Jeff Skrenes, trashy Pamiko property

On Wednesday night, Hawthorne's Housing Director, Jeff Skrenes, gave an update to the Hawthorne Housing Committee about the situation with Pamiko, which was blown open in a very public way on this blog. (In the interest of full disclosure, readers should know I am the secretary of this committee and--in fact--was re-elected secretary at this same meeting)

The meeting was public and nothing was said in secret, so here is what came up about Pamiko...

Jeff explained how research into compiling a list of property for CPED--for CPED to possibly acquire for renovation or demolition--led to the discovery of a Pamiko property with a foreclosure of 2.5 million bed at the sheriff's sale. Jeff started digging a little, on his own unpaid personal time. After Jeff posted a relatively small amount of info on Johnny Northside Dot Com, info started to flow Jeff's way.

It turned out there were extensive property holdings by an entity associated with the Koenigs, who were previously involved in the Dream Homes fiasco, a matter which makes the Chair of the Housing Committee literally gnash her teeth. (Please note the Chair of the Housing Committee--Bev Scherrer--was also re-elected at the same meeting. Congratulations, Bev)

Jeff said there is the appearance of mortgage fraud, though explaining the technical reasons why he suspects that would take too long and would be boring beyond the endurance of most human brains. (OK, Jeff didn't actually say that LAST part) Jeff said he has contacted the FBI, city attorney, and Hennepin County attorney.

Minnwest Bank Metro appears to be very involved in this matter. Multi-million dollar loans appear to be lines of credit. There is crossover between the different properties and the different lines of credit. This could be as big as T.J. Waconia, though it is in OUR neighborhood and some other neighborhoods, not the same neighborhoods as T.J. Waconia.

Jeff noted that if no charges are pursued against Koenig, there is a portion of the civil rights ordinance which says you’re in violation if you contributed to the creation of a ghetto. That portion of the ordinance is untested. There is an attorney who could be interested in taking on this case. The attorney gets funding from other foundations.

The Chair thought that the neighborhood needs to zero in on which properties are better and which need to come down.

Editorial remark: If every single so-called "Dream Home" were demolished, it would present no loss to the neighborhood, though perhaps one or two of the buildings could be moved around and used as chicken coops by some of the fine old homes in the neighborhood. That way at least ONE of the buildings would be around for the sake of history, but preserving more than one is probably preserving one-too-many.



Anonymous said...

Aside from the lack of basements and garages, i've been looking on your blog but not seen any other mention of why the "dreamhomes" are not fit for human occupancy. Can you provide more details. I understand your concerns with the lack of basement and garage but aside from that the pictures appear to be adequate for purpose of providing safe, clean shelter to humans. Can that civil rights option be used against the drug dealers, thugs and pimps that also help add to the creation of a ghetto?

The Hawthorne Hawkman said...

@Anon 9:59 - In reverse order...I suppose that section of the civil rights ordinance could be used against drug dealers, pimps, and the like. But they're already breaking the law in other ways that are more easily prosecuted. Setting a new legal precedent defining the "creation of a ghetto" under this ordinance could add years to the prosecution time for activities that are already defined as criminal.

The Dream Homes certainly ARE fit for human occupancy. But they remind me of a rather unique situation when I lived in Honduras ten years ago. Hurricane Mitch devastated the country, and the poorest of the poor had their shacks/shanties in the suburbs of the capital wiped out. These were homes made mostly of mud bricks, corrugated metal, and other scrap materials.

So a non-profit came along and said, "We'll put up housing for you very quickly," and that was met with widespread thanks. But somehow that housing was even WORSE than what was there before. It was made out of a plastic that was so thin and flimsy even a child could literally punch right through it.

After a while, even the most indigent people began to say, "This housing is below our standards," and that they'd prefer to wait it out while higher-quality homes were built.

So the issue is not whether the Dream Homes meet the extraordinarily low bar of being "fit for human occupancy." The issue is that at best they were homes thrown together without consideration of how to build a strong, vibrant community. When a house has no basic features (and the heating systems on these homes are terrible too, by the way) it will not appeal to owner-occupants or quality landlords. Even their appearance is now synonymous with a lack of quality housing in north Minneapolis.

At worst (which is what I believe) the Dream Homes were intentionally built this way, to maximize profit off of section 8 and other public housing vouchers. The goal of the Koenigs and Kohlenbergers was to come to a place that was ALREADY suffering from a concentration of poverty, and then enrich themselves by making the problem EVEN WORSE.

Looking at the court documents posted on this blog, it appears we can be thankful for at least one thing. These people are so slimy that they couldn't screw over our neighborhood without lying to each other and their investment partners about how much rent the Dream Homes generated, their value, or even who owned what and had the rights to list properties for sale.

If our only standard is "fit for human occupancy," we can have every vacant lot and every vacant house in NoMi filled by the end of the year, and then we can condemn our neighborhoods to another several generations of poverty. Or we can tell slumlords like the Koenigs, Mohghuls, Khan, etc. that their time is done and we're making a better NoMi for everyone.

Anonymous said...

Can someone point me to the statute/ordinance that is referred to in this post? The idea is intriguing.


Anonymous said...

Dyna Notes:

The "dream homes" met (barely) Minnesota and Minneapolis building codes. However, they had electric heat, which is cheap to install but costs twice as much in the long run. The houses were also too big for the lots, and they tended to be rented to large families who then had no yard for children to play in, park cars, etc.. Basicly the "dream homes" were designed to scam the Section 8 program to the maximum extent possible.

The Hawthorne Hawkman said...

@ AKL - perhaps a certain lawyer who showed me the particular ordinance can reference it here. Otherwise, if we don't get it posted in this comment thread soon I'll dedicate a full post to it in the near future.

Hillside Chronicles said...

That's my is actually rather rare language to see in a civil/human rights type legislation:

"It is the public policy of the City of Minneapolis and the purpose of this title: (5) To eliminate existence and the development of any ghettos in the community." Minneapolis Code of Ordinances, Sec. 139.10 (b)(5).

The question is how would the city or an aggrieved person go about enforcing this public policy? H-Hawkman is on the right path...the key is definitely the definition of "ghetto," which is missing from the Minneapolis Civil Rights Ordinance. Hmmm...and what would be the violation? It would have to be more than a violation of public policy in general, right? How about real estate discrimination under 139.40(e)? But somehow, that language doesn't quite talks about making opportunities without consideration to one's "status with regard to public assistance," which is not quite the theory of investors building crapy housing to take advantage of sec 8 housing. Seems like this theory wants to point to the concentration of poverty in one area that cannot economically support it...which is good start to a working definition of ghetto, or new language under real estate discrimination, but that puts us back at the beginning...sooo...what are we to do?

We should keep in mind that term ghetto is looks like it is from the 70's, so it would be interesting to see if something was removed from the ordinance that made this policy statement more/less clear.

So, overall, it is a good idea, one that Council President Barb Johnson has talk about from time-to-time, but it potentially under-developed as legal theory...but then again, maybe I just need to see that fully dedicated post OR someone could go to the Civil Rights Department and file the complaint and see what happens...

The Hawthorne Hawkman said...

Ah yes, now it's coming back to me. I think this was during a session where I'd had enough alcohol to help me solve all the world's problems but too much to remember my solutions the next day. Still looking for that sweet spot.

I believe John or I may have been incorrectly referring to this as a "state ordinance" at times, although I can't remember if we've done so on this blog. Regardless, the thinking was that if it went to court it could be established as precedent by making it to the level of the MN Supreme Court.

Could causing an inordinate or disproportionate allocation of public resources qualify as a violation of this part of the ordinance?

I'd want to be careful about too liberal an application here, though. If the bar for violation is too low, we could have just about every failed business or foreclosure qualify. And then who would want to extend credit in our community if the risk of being sued after a default were very high?

Still, I think it's an interesting angle and I'd like to see it explored at some point.

Anonymous said...

Thanks for the response! I read the statute, and I still think it's an interesting idea. I would make a couple of cautions, but I am not an attorney and will therefore refrain. As this is an untried legal theory, it's anyone's guess how a court would rule. As you say, send it up the flagpole and see what happens.