Item Description:
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Declare property at 8941 Portland Ave S, Bloomington surplus and authorize sale to Touchstone Mental Health for Intensive Residential Treatment Services
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Resolution:
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BE IT RESOLVED, that public ownership of the property located at 8941 Portland Avenue South in Bloomington is no longer required to facilitate the provision of residential treatment services at this location; and
BE IT FURTHER RESOLVED, that the County Administrator be authorized to negotiate Agreement A2512801 with Touchstone Mental Health, or affiliated entity, for the sale of property at 8941 Portland Avenue South in Bloomington, with an estimated receivable amount of $1,223,100; that following review and approval by the County Attorney’s Office and approval by the Commissioner of Minnesota Management and Budget, the Chair be authorized to sign the agreement, and the County Administrator be authorized to sign all related conveyance documents; and that the Controller be authorized to receive and disburse funds as directed; and
BE IT FURTHER RESOLVED, that the County Administrator be authorized to negotiate Loan Agreement LS00000040 with Touchstone Mental Health, or an affiliated entity, for the acquisition of the property at 8941 Portland Avenue South in Bloomington for the provision of intensive residential treatment services, during the period September 1, 2025 through December 31, 2035, in an amount not to exceed $600,000; that following review and approval by the County Attorney’s Office, the Chair be authorized to sign the loan agreement, and the County Administrator be authorized to sign all related loan documents; and that the Controller be authorized to receive and disburse funds as directed.
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Background:
Hennepin County acquired the property at 8941 Portland Avenue South, Bloomington (“Property”) from the State of Minnesota in 2015. The Property was renovated for use as a 16-bed intensive residential treatment services (“IRTS”) mental health facility. Since 2015, the Property has been operated by Touchstone Mental Health (“Touchstone”). The IRTS services provided by Touchstone are authorized by a county Human Services and Public Health Department provider agreement and are funded primarily by the State of Minnesota and health plan reimbursement.
The State of Minnesota utilized general obligation bonds the finance the purchase and rehabilitation of the Property when it originally acquired it in the late 1990’s. Because the majority of those state bonds have now matured, public ownership of the Property is no longer required to facilitate the ongoing provision of IRTS services at this location. A request for proposals was issued in March 2025 for the sale of the Property for use as a privately-owned IRTS facility. Following a competitive selection process, Touchstone was selected to purchase the Property. To ensure the ongoing use of the Property for the provision of IRTS services, a portion of the sale proceeds will be used to provide a deferred loan to Touchstone for the acquisition. The loan will require use of the Property as an IRTS facility for a minimum 10-year period.
Because a small amount of state bonds used to renovate the Property remain outstanding, sale of the Property is subject to approval by the Commissioner of Management and Budget (“MMB”). Staff will seek approval from MMB prior to finalizing a purchase agreement for execution.
Current Request: This request is for authorization to declare the property at 8941 Portland Avenue, Bloomington surplus and authorization to negotiate Agreements A2512801 and LS00000040 with Touchstone Mental Health for the sale of the Property for ongoing use as an IRTS facility.
Impacts/Outcome: The sale will return surplus property to private ownership, reduce ongoing county operating and maintenance expenses, and promote the continued provision of IRTS services.
recommendation
Recommendation from County Administrator: Recommend Approval