Shakopee officials devised plot to kill affordable housing project, emails reveal

Shakopee city officials devised a plan early this year to block an affordable housing project in the face of increasing public pressure against the development, according to emails obtained by Sahan Journal. 

Shakopee leaders knew they could legally jeopardize the city by attempting to reverse a City Council vote in 2020 that rezoned land for a development by Beacon Interfaith Housing Collaborative. Yet they decided to proceed. 

“We are going to essentially rezone the property,” City Administrator Bill Reynolds wrote in an April 10, 2023, email sent to council members and Mayor Matt Lehman. 

The email’s subject line read, “Beacon Plan.” Beacon develops affordable housing across Minnesota, and serves a rental clientele that is about 90 percent people of color.

The Shakopee City Council voted in June 2020 to rezone a plot of land at 4th Avenue East and Sarazin Street from B1 to Planned Unit Development (PUD) to allow Beacon to pursue its Prairie Pointe development. Three years later, Reynolds and city staff proposed in April that the city rezone the area back to its original status. Although rezoning would allow Beacon to proceed with a scaled-down version of the project, Beacon has said it would erase years of planning and would delay or potentially kill the project.

The city’s planning commission was scheduled to vote this week at its August 3 meeting whether to rezone the project site. A city communications manager told Sahan Journal late Monday afternoon that the vote would be moved to a September meeting so the commission could review new materials about the project.

“If you will recall, we had a rezone with PUD so Beacon could meet their parking requirements,” Reynolds wrote in his email, referring to the city council vote in 2020. “This will change the property back to B1, which they can then have an apartment building by right BUT this will negate the agreement with the church to use their parking for residents. Meaning that they will not meet code. Of course I expect they would ask for a variance – which can be denied by council.” 

Michael Kerski, the city’s director of planning and development, emailed Reynolds on May 4 to relay his conversation with City Attorney James Thomson about rezoning the land. No one else was included in their email exchange.

“He [Thomson] is nervous but I told him the worst-case scenario is they will sue,” Kerski wrote to Reynolds. 

“Let them sue, but the reality is that they are having troubles with the properties they currently have,” Reynolds replied on May 8. 

The emails’ revelations raised concerns for Mayor Lehman, who was not part of the email conversation between Reynolds and Kerski. Sahan Journal requested and obtained more than 400 pages of emails about the Beacon project sent by council members and city staff between January 2020 and June 2023.

“We should not be put in a position by our staff or any attorney to be sued,” Lehman said in an interview with Sahan Journal.

Lehman added that as mayor, he is not involved in day-to-day decisions regarding land-use planning. However, he said, his office and city council members should be alerted when a “wrong or right” situation or potential legal concerns arise. 

Lehman was a City Council member in 2020 when the council voted to rezone the land to accommodate Beacon; he was the sole council member to vote against the move.

“I hate to do one of them, ‘I told you so’s,’ but if we go back, even before 2020, I was the lone voice that said I’m against how we’re using our PUDs where we’re using them too much on all different kinds of projects, and that’s not what I believe the true intention of planned unit development is supposed to be,” Lehman said. 

Beacon officials challenge the city’s legal authority to propose rezoning the project site.  Beacon says it has a vested interest of nearly a million dollars in the project, and that most of the funding has been secured. Construction is set to begin next year.

“There’s just not a legal basis to reverse a decision that this same city council made. There just isn’t,” said Kevin Walker, Beacon’s vice president of housing development. 

Reynolds declined Sahan Journal’s requests for an interview, and instead issued a one-paragraph written statement. Thomson, Kerski, and all four Shakopee City Council members did not return messages seeking comment; the city’s communications manager said they were not speaking on the matter.

Reynolds’ written statement did not address his April 10 or May 4 emails about rezoning the Beacon site.

“We are committed to quality affordable housing,” his statement said. “Beacon claims that the city is anti-poor people. While that may help their fundraising, we are not. We are definitely ‘anti-poor management’ and we will hold all properties accountable for a safe and secure living environment regardless of income. 

“Beacon recently lost control of several of their properties putting their residents at serious risk. That will not happen in Shakopee.” 

Beacon denied the accusations.

“We stand by our track record—all our rental licenses are in good standing; across our 19 properties and 20-year history, Beacon has never been subject to a license revocation,” Beacon said in a written statement to Sahan Journal. “If a challenge arises at a property, we step in and resolve the situation.”

Public pressure prompts city action

The City Council’s June 2020 vote to rezone the project site for Prairie Pointe allowed for greater flexibility on parking spaces shared with a nearby church, and increased the number of housing units in the development. 

Beacon wants to build an apartment complex with 46 affordable housing units for families who make 50 percent or less of the area median income. Some of the units would be reserved for families who make 30 percent or less of the area median income, which is about $35,000 for a family of four, according to Beacon. 

The project sits on empty green space next to Resonate Community Church–its closest neighbor. 

Beacon is a nonprofit composed of congregations that provide equitable housing in Minnesota. The organization has about 20 properties in Minnesota, most of them in St. Paul and Minneapolis. 

Fifty-six percent of residents who live at Beacon properties are Black, 15 percent are American Indian or Alaska Native, 10 percent are white, nine percent are Hispanic or Latino, nine percent are multiracial, and one percent are Asian, according to Beacon. 

As the Shakopee project progressed, residents voiced their concerns to city leaders and officials. 

“In review of the meeting last night where you claim the city did everything correct and on time notifying all land owners within 500’ of the property where the zoning was being changed. I would guess you missed 40% or more in our area,” one resident emailed council members and then-mayor Bill Mars after the June 2020 vote. “These owners are denied do [sic] process, which should render you vote last night null and void.”

“If you have blame, you can direct it to me as it was my call to do so,” replied City Administrator Reynolds, who had supported the council’s vote in 2020 because he believed it allowed the city to have input on the project.

Between December 2022 and April 2023, Shakopee city officials and council members received several emails from residents about two of Beacon’s properties. 

Residents highlighted a FOX9 story from April 6, 2023, which reported that The Lonoke Apartments in Minneapolis experienced violent squatters and unresponsive management. They also shared Beacon’s blog post from December 2022 about the Kimball Court Apartments in St. Paul, where tenants were facing unsafe living conditions and repair issues.  

“I am very concerned about crime, drugs and overcrowding flooding the immediate area if this apartment is built,” read one resident’s email to Mayor Lehman and council members on May 22, 2023. “We have a large amount of children in the area, along with a senior community that would be across the street from the Apartment [sic] complex, its [sic] not fair to anyone if we have to deal with stacks of drug needles laying around, squatters, increased crime and generally not feeling safe in our neighborhoods!” 

Reynolds reached out to Mayor Lehman on April 7 to ask about taking action against the project. 

“What do you think of a council resolution against the building here? Just a thought on something we can do,” Reynolds wrote Lehman. “It will be a mess if built here. They can’t handle the buildings they have now. Looking for a solution.” 

Reynolds reached out to City Attorney James Thomson three days later as the city began buckling under the pressure.

“We are getting hit with a lot of complaints about the Beacon Housing project that is to be built. There was another exposé this week on problems with another facility,” Reynolds wrote Thomson in an April 10 email. “Essentially, Beacon is trying to blame the police and not its management. Council wants to know what we can do. It was PUD [Planned Unit Development] that was approved. 

“I have told them we could put together a resolution against due to the multiple issues with Beacon properties at this point, but some want more. Lot’s of social media on this one.” 

That same day—April 10—Reynolds sent the “Beacon Plan” email to council members and Lehman, saying the city would “essentially rezone the property,” and that he would contact the Shakopee Mdewakanton Sioux Community (SMSC), which granted Beacon money to develop Prairie Pointe. 

“I will contact the SMSC – who is a backer – and let them know we are done with Beacon,” Reynolds wrote, adding that he would also inform a Minnesota lawmaker that funding the project would be a “problem” for the city. “This should take care of the issue, it will just take some time to get it done. I would request no comments on social media – of course I will always request no comments on social media.”

Emails show that the idea of returning the project site to its original zoning was broached as early as December 2022.

Reynolds sent an email to the council on December 27, 2022, and included statements he said came from Thomson: “I do not remember the exact land use action that the City Council took on the Beacon Interfaith project. If it was only the adoption of a rezoning ordinance, the city council could re-zone the property back to its original zoning.”

‘I will fall on the sword’

City staff scheduled an agenda item for the Shakopee Planning Commission’s June 8 meeting to reverse the City Council’s 2020 vote that allowed the Beacon project to proceed. The meeting agenda stated that city staff believed that the 2020 vote was an “error” because Beacon did not hold a neighborhood meeting about its project, which is required by city code. 

“I will fall on the sword that this should never have been approved because of the lack of a neighborhood meeting – plus things have changed in the community – like Beacon can’t manage its existing properties!” Michael Kerski, the city’s director of planning and development, wrote to City Attorney James Thomson in a June 5 email. 

However, a senior city planner had emailed Beacon in April 2020—two months before the City Council’s rezoning vote—and said that because of the COVID-19 pandemic, the neighborhood meeting would be “replaced” with public input gathered by the city from online submissions and emails. 

“This replaces the neighborhood open house we were otherwise to have done and we do not need to do our own neighborhood open house, in-person or virtually, and send our own invitation, at a point in the future, correct?” Beacon asked the city planner in an email.

“This will replace the neighborhood meeting requirement,” the city planner wrote back. 

Beacon has said it did not violate the city’s meeting requirement because the public was engaged online. They said they were not notified by the city about the rezoning agenda item at the June 8 planning commission meeting. Beacon sent a letter to city officials that day opposing the scheduled vote, arguing that rezoning the site would be “an unlawful action and in direct conflict of Minnesota law.” 

The letter said rezoning the site would revoke Beacon’s rights as the property owner, and would conflict with city code and federal and state law. 

“To go back to being B1 would be a major impact on this development,” Kevin Walker, Beacon’s vice president of housing development, told Sahan Journal in an interview. “It would require a significant redesign–basically, a massive reworking of the project. 

“It could threaten our funding, but would likely reduce the number of families we could serve, and it would be sending us back to the starting line, and it would thus further delay and jeopardize these homes for families that need these homes, frankly, tonight.” 

In a June 8 email sent to Kerski and City Attorney James Thomson, City Administrator Bill Reynolds appeared to acknowledge that a senior planner had given Beacon permission three years earlier to skip the neighborhood meeting that was now the basis for the city’s attempt to rezone the project site.

“The only real argument is that we waived the meeting requirement through Kyle’s email,” Reynolds wrote. “We’re [sic] we aware of that?” 

The planning commission, which is made up of seven appointed community members, decided at its June 8 meeting to move the agenda item about whether to reverse the 2020 vote to its August 3 meeting. 

In his email statement to Sahan Journal, Reynolds defended the city’s work on affordable housing, adding that it has approved more than 350 affordable housing units in the last decade. The city has also passed a Fair Housing Act, implemented a longstanding Crime Free Multi-Family Housing Program, and instituted a rental and inspections program “to ensure all properties meet basic quality living requirements.” He did not provide further details, and declined multiple requests for an interview.

Three percent of the Shakopee’s current housing stock consists of units affordable to households that make 30 percent of the area median income or below, according to a city report. 

Moving forward

City emails also show that Beacon ran into roadblocks in developing the project. The organization had trouble raising money, and experienced communication difficulties with city staff on occasion.

However, Beacon remains optimistic about working with the city to complete the project, and believes the planning commission ultimately won’t rezone the project site. 

A city communications manager said the August 3 vote would be moved to September so the planning commissioners could review new material from an in-person neighborhood meeting hosted by Beacon last Wednesday. No public hearing about the issue will be held at the September meeting.

Beacon provided the city with a report on residents’ feedback and a sign-in sheet.

“We’ve had a really strong working relationship leading up to the council’s approval of the development,” said Kevin Walker, Beacon’s vice president of housing development. “I would say that we wish to continue to operate in that fashion with the city of Shakopee. I’ve had a couple of recent conversations with city staff… I am fully confident that we can get back on track with each other and move this development forward.”

Beacon hosted last week’s meeting at Resonate Community Church, which is located next to the project site. The church’s Senior Pastor, Curtis Brown, who has been a pastor in Shakopee for a dozen years, said around 60 people showed up, including a few council members. 

Brown attended city meetings about the project, including the June 8 planning commission meeting. The city’s vote on whether to rezone the project site is “puzzling,” Brown said. 

“I’ve been trying to figure out by putting the pieces together if there’s some larger issue, or if it truly is just about the neighborhood meeting,” Brown said. “I really do hope that everything now has been covered, and the piece I really would hate would be for so much time and money to be spent on litigation if that’s where this went, when we know there are families who are waiting to have a roof over their head.” 

Walker described the neighborhood meeting as productive. 

“To me, there’s no reason for this to enter into the legal terrain,” he said. “The city has, I think, every reason to work with us to move this concept.

“I have confidence that we can get on a good working place again with the city of Shakopee. That’s our interest. That’s what we’d like to do, is to move ahead with the plans as they were proposed and approved.”