FreedomWorks, Inc., is a Christian post-prison re-entry organization assisting men to effectively re-enter society following a period of incarceration. The mission is accomplished by providing a safe and encouraging environment in which program support guides men into healthy relationships by providing transitional housing, employment assistance, counseling, spiritual and vocational guidance and job coaching.. The men are required to meet a portion of their program and occupancy expenses while focused on a path to financial freedom and “normalized” living. The program is effective . . . recidivism rates hover around 7% while the national average is nearly 69%.
Since its founding in 2003, FreedomWorks has operated in a 6,000 square foot building located in North Minneapolis. In recent years, the organization outgrew this building as the program expanded to meet an ever-growing demand for post-prison and recovery community needs. In 2017, FreedomWorks began its search for a larger facility that could meet its long-term needs and provide additional depth to its program. The ministry wanted a new property to accommodate the addition of affordable after-care housing, cognitive behavior therapy, drug and alcohol treatment and more comprehensive life skills instruction.
FreedomWorks became aware of a foreclosed property comprising nearly a full block in North Minneapolis. The property contained seven (7) separate parcels: a 2-story office building of approximately 16,000 square feet; a 4-story former skilled nursing facility of approximately 60,000 square feet. This facility also contained a large commercial kitchen and laundry facility; a 4-story assisted living facility of approximately 40,000 square feet; 3 parking lots; and a large vacant piece of land on the north side of the block.
As one can imagine, the deal was extremely complicated; and numerous steps were required to reach a potential purchase of the property:
FreedomWorks commissioned a well-known commercial appraisal firm to complete an appraisal of the property. This satisfied a number of concerns with respect to financing, insurance coverage, liability, potential tax issues, etc.
Although the buildings were in good shape structurally, there was a significant amount of deferred maintenance. The former skilled nursing facility had been vacant for nearly three (3) years. Mechanical systems were old and nearing their life’s end. Inspection of those systems along with electrical, roofs, windows, elevators, parking lots and life safety issues were completed. In addition, Phase I and Phase II environmental studies, respectively, a site survey and civil engineering site analysis were completed.
The office building and assisted living facility were occupied and operating. However, determining the cost of operation of each building and the property was complicated. Records were incomplete and spotty at best. For example, the heating and cooling units of one building served the HVAC needs of another. Finding the right meters and determining past utility and operating costs were difficult. Understanding the terms and conditions of existing leases and speaking to those tenants was exhausting. A laundry service and a catering food service were operating out of one of the buildings, and there were no written agreements with respect to their use.
Letter of Intent.
Weeks of negotiation were required to complete a mutually acceptable Letter of Intent. The church directly adjacent to the property utilized some of the parking area and meeting areas in the office building; and the property provided some of the utility services to the church. Consequently, as a part of the Letter of Intent, FreedomWorks had to negotiate a Shared Services Agreement providing the terms under which the parking and meeting areas and services would be provided and maintained.
Through numerous discussions/negotiations with a local financial institution and through the significant contributions and guarantees of generous donors, FreedomWorks was able to secure financing for the purchase of the property under very favorable terms.
Based on the business terms outlined in the Letter of Intent, FreedomWorks executed a Purchase Agreement in late March 2018. The foreclosure dictated that the redemption period be sixty (60) days, with the anticipated Sheriff’s Sale occurring in mid-June. Once a number of other details were completed, and the fact that no party responded during the redemption period, FreedomWorks was able to close the transaction in mid-July, 2018.
Conditional Use Permit.
The broad zoning classification of the property is R-4. However, due to the change of use of the property by FreedomWorks, a conditional use permit was required to utilize the property as “supportive housing.” As a result, FreedomWorks had to twice go through the expense and lengthy public process of being approved by the City of Minneapolis for a Conditional Use Permit . . . once in May for the former skilled nursing facility and a second in October for the former assisted living facility.
After eleven (11) months of due diligence, inspections, coordination and negotiations, FreedomWorks now had a facility it could utilize well into the future. The work had just begun, however. Volunteers provided thousands of hours of labor to clean, paint, and repair the property to prepare it for occupancy by FreedomWorks and other collaborative ministries. And the work continues as plans are made for the growth of the ministry. It was a gigantic effort . . . but it is now done!!
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