A few years back, Ned Abdul did some properties in Central neighborhood.
The quality of the rehabs was in my opinion, bare minimum at best.  I also
heard complaints from some of the folks who purchased these "rehabbed"
properties.  The properties that Ned continued to own and rent were very
poorly managed.  I'm not sure I would accept Ned's explanation of his
previous problems - I suspect there is a lot more to the story than that.

On the other hand, many of the properties Ned rehabbed, he saved from the
MCDA wrecking ball - so while the quality of the rehab was an issue, at
least the city had not lost these particular housing units.

With regards to the 29 unit variance, my guess is that is tied to the
subsidy money - a lot of federal money is tied to projects containing at
least 29 or 30 units.

I am unfamiliar with the quality of Ned's commercial rehabs, it sounds like
they may be better than the residential efforts.

My opinion:  if there is public money involved, then it should only be
involved to obtain desired results that could not be achieved without the
use of public money.

Too many developers take big amounts of public money for projects that
could happen without the funding - nice profits for the developers, but
wooden nickles for the taxpayers.

David Piehl
Central



David Brauer wrote:

A couple of nights ago, we met with a developer named Ned Abdul. Ned has
struck a deal with the owners of the Good Samaritan nursing home, 4425
Nicollet, a former 105-bed hospital that has been on the market since
2000.

Good Sam represents Kingfield's best shot at adding affordable housing.
However, the road to getting there has been filled with potholes, and I
could use the list's collective expertise to help us wade through to
whatever opportunities may remain.

The nursing home sat on the market for over a year, mostly because the
asbestos-ridden, systems-corroded building was grossly overpriced at
nearly $2 million. While this was going on, the Kingfield board
established a policy seeking affordable housing or a community school.

The school district said it was too small for a public school, so we
aggressively recruited developers and also facilitated other interests
(such as a charter school). One charter school had a purchase agreement,
but the group evaporated. Other developers were interested, but said the
building was overpriced.

Good Sam finally woke up to economic reality late last year and dropped
the price to $890,000. There were two developers whom the board had
talked to who were very interested and very committed to affordable
housing. But fairly quickly, Good Sam picked Ned Abdul. We think his
money is more ready; he's prepared to do market-rate, so Good Sam can
get their money more quickly.

I only met him last week, but Ned Abdul is the source of some
controversy. He lost his landlord license over the poor management of a
place at 18th & Chicago some years back, was mixed up in some
mortgage-flipping stories Steve Brandt chronicled, had a role in an
overpriced, flipping-like scheme on the north side that the school
district got mixed up in, and apparently was involved in a Whittier
project where he had to be removed from the rehab.

That said, the guy has apparently done a lot of other projects
successfully. He's currently renovating the old Latham's Table/Blue Nile
in Lyn-Lake, as well as lots of other small and large projects. He said
the mortgage-flipping stuff was a business disagreement and has since
done business with the plaintiffs again; as for Chicago Ave., he said he
no longer manages properties, he just develops them, hiring a company
called Matcom manage them. (Anyone know anything about their record?)

Ned has been pretty clear he doesn't plan to own the building long-term.
He wants to sell it quickly to an institutional investor. He has long
said he has a purchase agreement, though we can't confirm that, and now
says he will close on the building in early April. The real estate
agents won't return our calls for confirmation, after being very
available when the building was on the market.

Ned is requesting a 20-percent zoning variance from the city; his
hearing is April 1. The property is currently zoned R-4, meaning it's
limited to 24 units. Ned wants to build 29, and he needs the
neighborhood's recommendation.

As you can imagine, the neighborhood board is highly skittish about his
track record, and there's some hope that if we recommend against the
variance, perhaps the deal isn't doable and a better developer emerges.

Then again, Ned says he will own the building whether there are 24 or 29
units. He said it's in the neighborhood's best interest to recommend for
the variance, because a 29-unit rehab will have a "better" mix of 1-,
2-, and 3-bedroom units, where a 24-unit building will have more 3- and
4-bedroom units.

The barely-spoken threat is that fewer, larger units, a Good Sam project
will more single moms with tons of welfare kids. Go with more units, Ned
seems to be saying, and you get a "better" mix.

However, some board members think Ned needs 29 units to do the deal at
all.

Will any of it be affordable? Ay, there's another rub. In one breath,
there's the "welfare mom" threat, but at the same time, Ned says the
project will be market rate for now, since he has to close on the
building before he can even try to get subsidy to add affordable units.
He did say he would be applying to the Minnesota Housing Finance Agency
and others for subsidy. However, there is no commitment to affordability
and little trust on our part right now.

Anyway, at the meeting, Ned promised to make 20 percent of the units
affordable at 50 percent of the metro-median income (MMI) if we
recommended for the 29 units. He acknowledged that it would be hard to
keep that 20 percent promise if he sold the building, but pledged to
explore tying up the title or some other more permanent way to guarantee
20 percent long-term.

Our neighborhood board has housing guidelines requiring 30 percent of
any new more-than-duplex development be rentable at 30% of MMI, 30
percent at 50% MMI, and the rest market rate. Otherwise, we don't
recommend upzoning, variances, or offer our meager potential NRP
financing.

That isn't to say the neighborhood is always with us. At the meeting,
there was surprisingly little opposition to affordable housing (we
flyered about a quarter of our neighborhood closest to Good Sam).
However, there was clearly a lot of unease about the potential for big,
poor families. So someone suggested, why not make it senior affordable
housing? My personal take is that these folks want affordable housing
only if the people in it are older and can't cause much trouble, even if
the real need is among younger singles and families. Personally, I think
the need is greater for the latter - but I'd like info from those who
know. Ned is open but skeptical about the market for senior-affordable.

If you've read this far, thanks! We basically want to figure out how to
get the most affordable units from a developer we can trust (even if
it's to hire the right management company). In a nutshell, here are the
questions we're wrestling with:

1. Do we reject Ned's 20-percent variance request and risk getting a
more poorly configured building for the long-term?

2. How can you tie a developer to a 20-percent affordable promise with
no money in the deal?

3. Is there a greater need for affordable family housing or affordable
senior housing, or is either meeting an important city-wide need?

4. What's Matcom's management record city-wide? Abdul's record?

I'm sure there are other questions/details I'm forgetting, but I'll add
those to the discussion if it emerges.

Final thought: I genuinely do value the differing perspectives and
expertise on this list. We on the Kingfield board do want to be part of
solving the citywide affordable-housing problem, but we want to do it in
a fair, reasonable, sustainable way. This isn't an ideological thing -
we're just trying to do the right thing, and we appreciate your help,
whatever your point of view.

David Brauer
King Field - Ward 10
President, King Field Neighborhood Association
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