Sep. 26—WILLMAR — A representative of Suite Liv'n is considering litigation against the city of Willmar after the council rejected a memorandum of understanding that would have endorsed the process the city has followed in working with the owners to bring its rental properties into compliance with city ordinance.
Willmar City Council on Sept. 18 denied the memorandum
between the city of Willmar and the owners of the Suite Liv'n properties,
Dean Zuleger, the chief operating officer of 3D Money
, a real estate investment firm which owns the Suite Liv'n properties, provided his response to the denial and the comments that were made by city staff and councilors during the meeting.
For nearly a year, the city of
Willmar has been cracking down on Suite Liv'n properties due to complaints regarding poor maintenance
and Suite Liv'n was in danger of losing its rental licenses for multiple properties. Suite Liv'n owns more than 900 rental units in the city.
The rental licenses have ultimately all been renewed as of Sept. 19 on condition that a roof is replaced on one of the buildings, according to City Administrator Leslie Valiant. The roof replacement is currently underway, according to Zuleger.
has spent around $800,000 this year to address deficiencies in order to get its rental license renewals, according to information in the memorandum.
"We started on this year-long journey to not only repair buildings, but repair relationships with residents," Zuleger said. "We're grateful to the city for pointing those deficiencies out, but we did take immediate steps once they were made known to us."
In interviews with the West Central Tribune on Sept. 19 and Sept. 20, Zuleger took issue with the city for the process that took place, said the city rental inspector has a conflict of interest and blamed a former property management company and crime for the conditions of the properties.
"Let me tell you who you are talking to, I was a city manager for 15 years," Zuleger said. "I've developed rental housing. Our company is an evangelical-based, Christian company. I know more about this than Leslie Valiant and forgot more than (Planning and Development Director) Justice Walker will ever know. So, I'm speaking as an expert about this and my job was to get this cleaned up, but the city never gave us the opportunity to do that."
Zuleger said he is currently consulting with his attorney on possible litigation against the city and its staff.
"I've been aggrieved. I, quite frankly, have been betrayed by city staff," Zuleger said. "Our attorney will hopefully meet with the City Council and talk about our concerns."
Due to the threats of litigation, city officials did not comment on Zuleger's statements.
Noting that he thought the memorandum of understanding would create a ceasefire between Suite Liv'n and the Willmar Planning and Development Department, which oversees rental license renewals and enforces the city's rental ordinance, Zuleger added, "It's clear that we are under attack by city staff, not city management, by middle-level city staff, and we've got to protect the reputation of our owners — two good, Christian men — and the reputation of our company. Right now that's been harmed by this egregious effort by the city."
Zuleger asked once during the Sept. 18 meeting to be allowed to address the council, but was not given the opportunity.
"We're very disappointed in the City Council for not allowing us to respond in real time to the cheap shots taken at us by Justice Walker as he was walking out the door," Zuleger said.
Walker recently resigned to accept a position with another city.
"We will be pursuing legal action against Mr. Walker."
Zuleger said that he finds what Walker was saying to be slanderous, specifically Walker's statements that the company has retaliated against tenants who make complaints, that the city is currently investigating additional complaints and that Suite Liv'n has been "hostile" during the rental renewal process.
"The problem is the slander and the defamation and the conflict of interest and the unethical behavior of the city of Willmar Planning Department has cost this company millions in reputational harm," Zuleger said. "Someone has to answer for that. We were knocking on doors (Sept. 19) saying, 'Who's got complaints about us?' They were talking about complaints, we haven't had somebody complain in so long — he's making it up."
Zuleger stated that Suite Liv'n has added several maintenance technicians and currently addresses maintenance issues within 48 hours.
He also explained that Suite Liv'n believes there is a conflict of interest for Willmar's rental inspector, Ryan Tillemans.
Zuleger said that Tillemans used to work for their company managing a property and said that Tillemans either works for or is an independent contractor for another owner of rental units in Willmar. The same statement was made in a letter sent in June to City Attorney Robert Scott by a lawyer for Suite Liv'n.
The West Central Tribune is not naming the other property management company, as neither the city nor the company would confirm or deny whether Tillemans is working or has worked for that business while he has been the city's rental inspector.
"The story is that the guy that's going to write the ordinance and enforce the ordinance is working for someone that he would have to inspect or he would have to apply the ordinance to," Zuleger added, noting Suite Liv'n has informed the city of this conflict of interest and the desire to have an independent inspection.
The city has been in the process of updating its rental ordinance this year as it cracks down on landlords that fail to maintain their properties.
3D Money began acquiring the Suite Liv'n Willmar properties in the fall of 2016 as cash-flow investment properties
, according to its website.
The building currently awaiting a roof replacement is part of Willow Run, which was purchased in October of 2016 as a value-added property for the sole purpose of cash-flow and all updates to the property had been completed, according to the
3D Money website
. It is part of three multi-unit buildings constructed in 1977.
When asked about the information on the website, Zuleger said, "When the properties were purchased, they were already in tough condition, so we've been playing improvement ever since we bought them. The owners of the company really believe in giving people affordable housing, got into this business based on their faith, and we've been playing catch up. I can tell you now that we're caught up."
When West Central Tribune asked why a new roof would be needed on a building that just replaced its roof in the last seven years, Zuleger said some tenant practices, the presence of pets and crime also impacted the condition of the building.
Adding that a strict crime-free policy has been adopted, Zuleger said there were gang members living in Willow Run who had destroyed apartments and had to be evicted.
"The (memorandum of understanding), to us, was an understanding and a reflection that we had done our due diligence and the city was going to do their due diligence on their end by adhering to their processes," Zuleger said. "We have to assume that the city, in not passing the MOU, is going to still practice their inspections as they had in the past. We don't believe that that gives us due process or fair and equitable treatment. We also believe that the way this issue has been presented has caused us harm and we are trying very hard to rebuild our credibility in the community. It's very hard based on the city's actions towards us."