— An already tight housing situation in Willmar and Kandiyohi County may become even more dire with the potential loss of several apartment complexes due to nonrenewal of rental licenses for a company that owns nearly 900 rental units throughout Willmar.
is on the verge of potentially losing some of its rental licenses for failure to fix issues that are present in many of its rental units, including black mold and standing water, according to Willmar Planning and Development Director Justice Walker.
Willmar City Council
members during a work session Tuesday that the company is currently under investigation by the Minnesota Attorney General's Office, and Willmar's rental inspector Ryan Tillemans has been kept busy since he was hired in March of this year investigating complaints against Suite Liv'n.
The Attorney General's Office is investigating habitability violations and making sure that Suite Liv'n is providing habitable living conditions for their tenants. There's a lot of suspicions that the company is not, according to Walker.
It is also investigating the "shady" business dealings of the company, one of which is a clause in the lease that prohibits tenants from filing class-action lawsuits against Suite Liv'n, he noted.
"From the shady business practices to the conditions of some of the apartment buildings and some of the complaints that they have been having, and I think the frequency of the complaints, there's a lot of serious attention now being given and looking at ways to either get them to come into compliance or possibly looking at lawsuits and maybe looking at forcing them to dissolve," Walker said.
According to the company's website, it has properties in Willmar, New London, Spicer and Marshall. A message left by the West Central Tribune at the company's Willmar office, seeking comment for this story, was acknowledged by a staff member, but no comment was provided prior to the Friday afternoon deadline for this story.
It has been known for quite some time that Suite Liv'n has issues with maintaining its properties in Willmar to provide suitable living conditions for tenants. The hiring of Tillemans as rental inspector has allowed the city to compile evidence and build a case against the company, according to Walker.
The Kandiyohi County Housing and Redevelopment Authority is currently withholding rental subsidies in escrow accounts, according to Walker.
Walker noted that Suite Liv'n owns roughly 25% of the city's rental properties and they are "kind of almost too big to fail, in a way."
Several of Suite Liv'n's buildings are up for rental license renewal with the city, he continued. He explained that when a rental license is up for renewal, the building is inspected by the city.
If it does not pass, the owner is given two opportunities to make corrections. If corrections are not satisfactory, the city can pull the rental license.
If a rental license has been pulled, the property owner can appeal the decision with the City Council, according to Walker.
"I talked to Ryan (Tillemans) on the front end, and he was like, 'I don't think 20% of the buildings are going to pass,'" Walker said, noting some of the worst buildings are on Fifth Street Southwest. "I think it's about 100 units."
Some of the issues with not renewing the rental license is how many vacancies Suite Liv'n would have in other buildings to rehouse the people that would be forced to move if the rental license were not renewed for certain buildings, he added. It is up to the landlord to rehouse displaced tenants.
"When I say they won't pass, it's not like minor things like paint is chipping. One of the biggest issues right now is we have water leaks in people's roofs, entire units are at 85% humidity. It's really, really bad," Walker commented.
"That's one of the things that are coming. They are probably not going to be renewed, and they are definitely going to appeal, and so then trying to figure out a balance."
The city of Willmar approved tax increment financing in July of 2021 for the company to construct a new apartment complex near Ridgewater College and also granted a conditional use permit for the complex.
The city approved the TIF agreement only after Suite Liv'n agreed to follow an approved building maintenance agreement for all of its rental units throughout the city. However, the project never started and the conditional use permit and tax increment financing agreement have since expired.
With the problems the city is still having with the company, it is unlikely the city would enter into another TIF agreement or approve another conditional use permit.
Suite Liv'n was also granted property tax abatement for some of its current properties. Walker informed the council that he consulted with city attorney Robert Scott, and if corrections are not made for listed violations at those properties, the abatement can be voided.
Suite Liv'n has an "F" rating by the Better Business Bureau for a failure to respond to two of four complaints that were filed against the business and for government action taken against the business, according to the BBB website.
The company reached a settlement with the Attorney General's Office in February of this year to refund $50,000 to $60,000 in illegally collected utility surcharges and late fees to 877 households in Willmar, New London, Spicer and Marshall.
Walker told the council he is trying to set up a meeting with the owners to let them know the process they will be going through with the city, letting them know that the city is not trying to be unfair with them, and explaining this has not been done in the past due to attention not being put to it.
Seven units have already been condemned due to the conditions of the units, Walker noted.
"How responsive is Suite Liv'n when you've reached out to them? Are you getting any communication back from them?" asked Councilor Justin Ask.
Walker said that Tillemans just shows up at Suite Liv'n headquarters and has a direct working relationship with the maintenance people.
"I would say the disconnect is between the maintenance staff and the leadership," Walker said, noting the maintenance staff for the Fifth Street Southwest buildings are given only $1,000 per month for building maintenance.
He added that communication between his office and the maintenance staff is positive, but communication between his office and the property management staff is poor and borderline hostile.