Highland Bank and Dianne Kyte take over The Crossing

Diane Kyte The Crossing I waved Dianne Kyte, a realtor with Coldwell Banker South Metro, over to my corner office at GBM yesterday morning to ask her for an update on the status of the residential condo building at The Crossing where she lives. She confirmed that Highland Bank has taken over ownership of it from the developer, Mendota Homes. (The bank foreclosed on the property 6 months ago.)

Dianne has the listing for the seven unoccupied finished units (street address: 101 St Olaf Avenue N). And yes, the prices have been slashed. (continued)

Unit 202, The Crossing, 101 St. Olaf Avenue, NorthfieldUnit 202 (which we had planned to buy) had been originally listed for $350,000+. It’s now listed for $199,000. Highland is pursuing the sale of the remaining 35. There are 55 total in the building.

Brian O’Connell, Northfield’s Community Development Director, confirmed via email that he and the bank are currently in discussions about improving the condition of the property and site maintenance for it. I neglected to ask him how those discussions relate to the City’s discussions with PiperJaffray (TIF note) that I blogged about in early May, but I’ll follow up with him on Monday about it.

For more background on this, see all the blog posts here tagged The Crossing.

12 comments to  (Including 3 Discussion Threads) Highland Bank and Dianne Kyte take over The Crossing

  • 1

    Griff, you’ve mentioned several times that The Crossing was foreclosed upon, but isn’t that kind of misleading? The occupied units are owned/mortgaged by the individual owners, not by Mendota Homes. According to Rice County GIS, Mendota Homes still owns the undeveloped land and the commercial building.

    So, that it mind, I think it would be more accurate to say that the unsold condo units were foreclosed upon, not The Crossing as a whole.

    Anyway, good to see the prices coming down to something much more reasonable. It’s a beautiful building, despite its troubles, and it would be good to see the area more occupied.

  • 2
    Griff Wigley says:

    Sean, I intended for the phrases “ownership of it” and “the property” to refer to the “residential condo building” which I cited in the previous sentence.

    But I can see how it could be misinterpreted. Thanks for clarification.

    It’s not just the unsold condo units that Highland now owns, tho. All the common areas of the residential unit, too, ie, garage, hallways, property immediately surrounding the building, etc.

  • 3
    Griff Wigley says:

    Brian O’Connell, Nfld community development director, wrote via email re: who does the clean up, Highland or PiperJaffray:

    The relationship is that the clean up items are essentially the same items. Piper wants to renegotiate the TIF note, Council is saying they would consider renegotiating the note if the site clean up issues are completed. Highland is now the owner of the residential condominium to which the clean up items are related. So Highland is now determining the cost to complete the items to see if they can complete in time which will assist in unit sales efforts. Everyone wants the same thing; the issue is determining cost and identifying sources of money to pay the expense.

  • 4
    Griff Wigley says:

    Highland Bank is foreclosing on Phase II of The Crossing (commercial condos) according to Joel Walinksi’s report in the Aug. 7 Friday Memo:

    Over the past several weeks staff, Community Development Director Brian O’Connell, Finance Director Kathleen McBride, and myself have been in contact with the primary principles involved with the Crossings Development Project. An update on the Crossing Project involves the following activities:

    Staff has been meeting with representatives from Piper Jaffray, Highland Bank, Ehlers and Associates and the legal counsel from Kennedy and Graven to clarify the status of The Crossings project now that the foreclosure proceedings have come to a close.

    The Phase 1 residential condominium of the Crossing Project is now owned by Highland Bank, who has completed foreclosure proceedings on Mendota Homes. Highland Bank this week began the foreclosure process on the properties associated with Phase II of the Crossing Development.

    Highland Bank and Mathern Development are seeking landscape and construction quotes for the remaining work on Phase I. This work includes the final wear course, fencing and landscaping.

    MnDOT originally established an asking price of approximately $240,000 for the ~17,000 square foot parcel that they currently own near the corner of Highway 3 and 2nd Street. The original asking price was rejected by Mendota Homes. A re-appraisal undertaken by Mendota Homes determined that due to the identified soils pollution on the MnDOT parcel, the value of the parcel was severely affected by the affidavit recorded against the parcel.

    A recent revision to the initial counter appraisal of the MnDOT property has been completed. Without the affidavit (of contamination) the value was set at $216,000 – with the affidavit – the value is $54,000. The results of the appraisal revision is being reviewed by Mendota Homes which will result in a continuation of discussions with MnDOT related to the purchase of the parcels currently owned by MnDOT.

    Sales activity at the Phase I residential condominium has increased due to the change in marketing strategy. Highland Bank has adjusted the sales price of the residential units, which created renewed interest in the units by potential buyers.

    The 1st half tax settlement received from Rice County shows a significant delinquency that has resulted in a shortfall on the August 1st debt payment. The principal and interest due was $75,948. Because of the shortfall in collections, only $42,644 was transmitted to the bond trustee. Highland Bank is the primary owner who did not make all of the tax payments due on the residential condos. Highland Bank and its partners are currently involved in legal proceeding the Crossings Development, Highland Bank contends they paid what they considered their share to be.

    As previous Crossing Development Project updates have stated, the City is not exposed to any financial liability, the City is involved as the conduit for the collection and payment of property taxes. The City’s continued involvement in the development project is to help facilitate the successful completion of Phase I and Phase II.

    • 4.1

      I’m surprised to hear anyone is even talking about Phase II. I guess it’s a good thing, though I’m more eager to see the commercial building completed at 2nd and Hwy 3 than another residential building. It seems rather optimistic to think there’s going to be a big hunger for more luxury condos in the next ten or fifteen years.

  • 5
    Griff Wigley says:

    Sean, Phase II is the currently built commercial condo building… occupied by 3 or 4 businesses. Phase III is planned second residential building that, as you say, won’t be built for a long time.

    • 5.1

      Ah, that definitely makes more sense.

      I was running over at The Crossing tonight and was surprised to see that the sidewalks were never completed between the two buildings that were built and 2nd Street.

      Now I know you’ve been complaining for ages about the state of the undeveloped land (I’m feeling more in agreement now), but it seems really problematic to be selling downtown condos without a connection to the downtown sidewalk network.

    • 5.2
      kiffi summa says:

      Griff: are you sure about your Phase II statement? I had always understood that Phase I was the first residential and first business building, and that Phase II was the second set of residential and business buildings at the southern end of the property.
      The Friday memo is not completely clear on this, but I believe Phase II mentioned (now moving into foreclosure with the bank) would be the land where the next two buildings were supposed to be sited.

  • 6
    Griff Wigley says:

    Kiffi, I think you’re right, now that I look at some of the documents. This one says there is:

    Phase I residential
    Phase I commercial
    Phase I restaurant
    Phase II residential
    Phase III commercial

    as does this document.

    So it appears that Highland, like you said, is just foreclosing on the land associated with the Phase II residential. My bad!

    • 6.1
      kiffi summa says:

      Griff : yeah, well… it WAS your ‘bad’, and the same is true for the lack of attention to detail in your Charter Commission thread, IMO.

      Your obvious ongoing angst with the accuracy of the City’s website is getting in the way of accurate reporting, IMO, also.

      Sorry to be irritated; Am I supposed to say “My bad” for that?

  • 7
    Griff Wigley says:

    In the [Sept. 18 Friday Memo][1], Brian O’Connnell wrote:

    The Community Development Director and City Administrator will be meeting with representatives from Highland Bank, Mendota Homes, Piper-Jaffray and attorneys from Kennedy and Graven this Friday. The purpose of the meeting is to determine what progress and willingness there is on the part of Highland Bank or Mendota Homes to complete the remaining site improvements in phase I of the Crossing project. Additionally the process of transferring the property from MnDOT to the City and then to Mendota Homes or Highland Bank will also be discussed. MnDOT still is rejecting the property valuation that the City and Mendota Homes has established for the excess MnDOT property. This valuation has been established through counter appraisals and appraisal revisions and MnDOT still is of the position that the property should be purchased for a price as if there is no polluted condition on the property.

      [1]: http://www.ci.northfield.mn.us/assets/0/091809-JW.pdf

  • 8
    Griff Wigley says:

    The Crossing and Highland Bank are back on the Council agenda tonight, pages 20-23 of the packet.

    As an alternative to the request by Highland Bank, Staff offers the following proposal as a means to finalize improvements to the City park:

    Staff proposal-Park Improvements

    The City of Northfield pays for the costs of improvements for the City park along the Cannon River. These costs are estimated to be slightly more than $100,000. The installation of the park improvements will done under a City administered contract and the potential source of funds for these park improvements would be from either the Park Fund or the Capital Reserve Fund. The Contract for Private Development between the City of Northfield and Mendota Homes, Inc. (Highland Bank) would be amended to provide for a repayment to the City for the cost of these park improvements as part of Phase II financing on the Crossing project. (The City Council should understand that the potential to be repaid for the costs associated with making these park improvements could take a long time and is dependant on progress being made on Phase II of the project).

    The justification for this type of expenditure by the City is:

    •  to provide a benefit to the citizens of Northfield with respect to providing a park improvement along the Cannon River in this portion of the City;
    • to demonstrate the willingness of the City to see that progress on the Crossing project occur; and,
    • to contribute financing for park improvements at this time with the expectation that development financing for Phase II of the Crossing project include a repayment to the City for the expenses incurred by the City to improve the park.

    If the City Council were to agree to commit funds for these park improvements in the Crossing project from the Park Fund, other park projects that were to be paid for through these funds would not be able to occur without additional appropriations by the City.

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