Banks foreclose on The Crossing; now the City should clean up the surrounding property

Today’s Nfld News has this front page story: Crossing development is in foreclosure.

City Administrator Al Roder confirmed Tuesday evening that he was notified late last week of the proceedings begun by the project developer’s creditor, Highland Bank… Roder said he wasn’t certain if the entire project is being foreclosed on. At least one other bank held a portion of Mendota Homes’ loan for the project.

Data request on The Crossing I got wind of the notification last Friday and filed a data request on Monday (left photo). Thus far, I don’t have the documentation but I did speak by phone to Community Development manager Brian O’Connell yesterday and he confirmed it.

I asked Brian if he knew the status of the Jimmy Johns restaurant that was scheduled to break ground the week of May 12th. He didn’t.

I suggested to him that now might be a good time for the City to step in and do the cleanup on the property surrounding the buildings there, both for the sake of the residents and businesses there, as well as for downtown. I took these photos this morning.

The Crossing The Crossing The Crossing The Crossing The Crossing 

The Crossing The Crossing The Crossing The Crossing The Crossing

The weeds are tall, construction debris is still there from April of 2007, and Xmas tree sale leftovers can still be found in the parking lot. (Full disclosure, again: we have money down on a condo there but are refusing to close. Mendota Homes is suing us and the case is now going to arbitration.)

Update 6/12 at 9:15am:  Here are PDFs of the photocopies of:

1. Letters from Highland Bank to John Mathern/Mendota Homes and to the City of Nfld.


2. Memo from Community Development Director Brian O’Connell to the City Council.



  1. Anne Bretts said:

    Are you suggesting that the city do the clean-up without charge to the bank/owner? It would seem that the property would be cited for whatever violation is involved and the bank should have option of paying for the clean-up or having the city do it and bill for the work, just as homeowners are cited for not mowing, etc.
    Sure, it would great to have it cleaned up, but that has been an option all along, hasn’t it? Why now? Why wasn’t it done before? Shouldn’t it have been part of the occupancy permits or completion agreements?
    Sad news in any case. The Crossing is hardly alone in condo foreclosures, however. There are some in Burnsville where the bank is selling units at fire sale prices. That’s good for buyers, but puts even more downward pressure on prices in the rest of the condo/townhome market. (Disclosure: our townhome is one of those waiting for a buyer.)

    June 11, 2008
  2. Gabriel Rholl said:

    I couldn’t agree more with you, Griff. That’s the first thing that went into my head when I saw that headline on the Northfield News: the site needs to be cleaned up. If this is a long-term deal, and the second residential building won’t be constructed in the near future (which looked inevitable as early as last year), somebody needs to go in there and clean it up. Otherwise you’ve got the downtown gateway plan totally messed up: Sure, you’ve got the brand new landscaping/parking lots in front of the key and the liquor store, but that doesn’t matter if you’ve got that gigantic eyesore just a few yards to the north. As for Anne’s point, I’d suggest a community volunteer clean-up, but the reports of lead poisoning on the site nix that.

    June 11, 2008
  3. I don’t mean to sound harsh but, why is it the city responsibly to clean it up? It not, if it bothers you, then you go and gather some of your friends and ya’ll can go clean it up. I don’t want my tax dollars spent cleaning up and/or bailing out a project that should not have happen in the first place.

    Cleaning up the site I think should be Mendota Homes and the residents who own a condo there, not the city.

    June 11, 2008
  4. Larry DeBoer said:

    Why not hold the Taste of Northfield event on the grounds of the Crossing development. In the process all the vendors can help clean up and prepare their own sites to sell their food and drink offerings.

    June 11, 2008
  5. Chuck Pryor said:

    I read Al Roder’s comments about the forclosure proceedings at the crossing this morning and can not believe that he thinks the impact to the city is “minor”. As a taxpayer in the historical downtown district, 1/2 of my property tax goes into the TIF program that helped finance that project. Given the current state of skyrocketing property taxes on these older buildings, I think Al might get a far different response from my neighhbors who watch their property tax money going into a project that is now up in the air.

    June 11, 2008
  6. Griff Wigley said:

    I noticed this front-end loader yesterday at 3pm. I’ve no idea what’s going on, but the big black culverts had been moved.

    June 12, 2008
  7. Griff Wigley said:


    I’m not saying it’s the city’s responsibility to clean up the site.

    But since the city’s been complaining about it for over a year and since the property is a visual blight to the northern ‘gateway’ to Northfield/downtown, I think the city should do it and bill MH for it. As Anne indicated, the city often does this, even for residential properties. (If you don’t shovel your sidewalk or mow the boulevard in front of your house, I think the City can do it and then tack on a fee to your utility bill.)

    June 12, 2008
  8. Griff Wigley said:

    With the rest of downtown looking so spiffy, Carleton’s commencement this weekend, and the American in Bloom competition jury arriving soon, it seems like now would be a good time for the City to step up to the plate.

    June 12, 2008
  9. Griff Wigley said:

    Chuck, good to have another downtown property/business owner (The Grand, The Tavern) weighing in here.

    I think Al Roder, Brian O’Connell, and most City Councilors have been assuring the public for a long time that the city’s not obligated to make the bond payments with property tax proceeds from The Crossing, as Suzy Rook wrote in her article. So as far as I know, your downtown building property taxes aren’t going to be used to make good on the bonds.

    As for the long-term impact of a city not making payments on a bond, I don’t know. Mayor Lansing, to his credit, has been sounding that alarm for a while.

    June 12, 2008
  10. Griff Wigley said:

    The black culverts are gone as of 8:45 am.

    June 12, 2008
  11. Griff Wigley said:

    City Clerk Deb Little sent me photocopy PDFs of the:

    1. Letters from Highland Bank to John Mathern/Mendota Homes and to the City of Nfld.

    2. Memo from Community Development Director Brian O’Connell to the City Council.

    I’ve added them as an update to the blog post above.

    June 12, 2008
  12. I guess I have not heard the city complaining about this site, I personally think the building is a huge eye sore, it’s to big and ugly. I still think the city should NOT clean it up, it’s in foreclosure. Who will pay the city back?

    June 12, 2008
  13. Several pieces of information:

    1. The project is within its own tax increment district (the Riverfront District). Property taxes collected on the parcels within the project area go to making payments on the taxable tax increment revenue note issued. No money from the Master Development District are pledged.

    2. The taxable tax increment note is not a general obligation of the City (pledging the full faith and taxing power of the City). The City is only obligated to forward those tax dollars (tax increments on the Riverfront District Tax Increment District) COLLECTED to the bond trustee in order for the trustee to make payments to the bond holders.

    This limited obligation on the part of the City is clearly stated on the note(s).

    If tax collections are insufficient to pay the full amount due, the City is not obligated to pay from other sources. Those banks that purchased the note would likely pursue action against the property owners – not the City.

    If there is a default, the City’s bond rating will not be in jeopardy.

    Hope this clarifies.

    June 12, 2008
  14. Gabriel Rholl said:

    Does anybody know if this means the project will never continue as originally planned? Or is there a possibility that it could be picked up at a later time by either Mendota Homes or another developer? For that matter, would the same plan/layout even be used, with a second high rise?

    June 12, 2008
  15. Griff Wigley said:

    In today’s Nfld News: Developer still optimistic about Crossing’s future.

    Days after his 55-unit residential condominium at The Crossing went into foreclosure, and John Mathern is still optimistic. Mathern said he has about seven months to negotiate a deal between his company, Mendota Homes, and the bank to allow it to retain ownership of the three-story brick building overlooking the Cannon River. Mathern, whose development at Hwy. 3 and Second Street includes retail condos, said The Crossing is still a go…

    … city utility records show Mendota Homes owes $3,100 for The Crossing residential building; county property tax records show Mendota Homes is $54,450 in arrears on that property alone. Both figures include late penalties that accrue over time.

    June 14, 2008
  16. Griff Wigley said:

    Kathleen (Mac!), thanks so much for posting that. (To others, Mac is the City of Northfield’s Finance Director.)

    Chuck, do Mac’s comments ease your concerns?

    June 14, 2008
  17. David Koenig said:

    Could Kathleen post the City Hospital’s financials online in the other discussion? It would be good to see what has happened each year since 2000 in terms of revenue and surplus/profit.

    June 14, 2008
  18. Griff Wigley said:

    In the Strib last week: Developers delay, and neighbors in Minneapolis feel the pain; As a stalled condo project languishes, some seek stiffer rules for land maintenance before extending any deadlines.

    But Council Member Lisa Goodman, whose ward includes downtown, wants stiffer requirements for site maintenance before she’s willing to extend deadlines for any projects. She’s irate over the condition of a half-dozen stalled sites downtown. The issue hits home for her because her condo building on the 1200 block of Hennepin Avenue overlooks a site she describes as neglected — it once was to hold a Lunds grocery.

    June 16, 2008

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