Item Description:
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Neg termination of Agmt A189068 with People Inc. for IRTS beds at 1622 Hillside Ave No, Mpls; accept loan repayment of $160,000
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Resolution:
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BE IT RESOLVED, that the County Administrator be authorized to negotiate termination of Agreement A189068 and associated documents with People Inc., accept loan repayment of $160,000 for capital costs associated with the addition of 8 Intensive Residential Treatment beds at 1622 Hillside Avenue North, Minneapolis, and to terminate the declaration and satisfy the mortgage for that property; that following review and approval by the County Attorney's Office, the Chair be authorized to sign the necessary documents on behalf of the county; and that the controller be authorized to accept and disburse the loan repayment of $160,000 for CP 1006026 (Mental Health Housing Support project).
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Background:
The Mental Health Housing Support project (CP 1006026, NTE $750,000) was created to increase the number of Intensive Residential Treatment Services (IRTS) beds in Hennepin County. The addition of IRTS beds aids in the timely discharge of patients from state and local hospitals, provides effective community supports, and enhances capacity for individuals needing psychiatric stabilization services. The expansion of community-based mental health programs is a critical strategy to prevent hospitalizations, civil commitments, and the over-representation of persons with mental illness in the criminal justice system.
A request for proposals was released in May 2018 to support property acquisition, renovation, and/or construction of new IRTS facilities. The two responses received were evaluated and reviewed by a committee consisting of staff from Community Works and Health and Human Services.
Resolution 18-0336 (adopted August 21, 2018) authorized Agreement A189068 with People Inc. for capital costs associated with the addition of IRTS beds at 1622 Hillside Avenue North, Minneapolis during the period August 21, 2018, through September 30, 2029, with the not to exceed amount of $160,000.
Beginning in 2019, and continuing until October of 2023, People Inc. operated an 8-bed IRTS program at this address. In the summer of 2023, People Inc. decided to move the IRTS program located at 1622 Hillside down into a new location at 3633 Chicago Avenue, Minneapolis.
People Inc. is now pursuing the sale of 1622 Hillside to an independent buyer. To facilitate the sale, they have requested termination of Agreement A189068, including:
• Repayment of the original loan amount of $160,000
• Satisfaction of mortgage
• Removal of the property’s 10-year Declaration of Covenants and Restrictions which required operation of the property as a licensed IRTS facility with 8-16 beds
Current Request: This request seeks authorization to terminate loan agreement A189068 with People Inc. for IRTS beds at 1622 Hillside Avenue North, Minneapolis, accept repayment of $160,000 forgivable loan, satisfy the mortgage, and remove property declarations associated with the repaid financing.
Impact/Outcomes: Expedite reuse of a property, with IRTS beds committed to a new location.
recommendation
Recommendation from County Administrator: Recommend Approval