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Revocation of Russ Erkkila's Rental License
Legal Background

In the early 1990s, the City of Minneapolis enacted a rental-license ordinance which requires all rental-property owners in the city to obtain an annual license from the city before they are allowed to rent housing units to tenants. Some time later, a measure was added pertaining to "conduct on licensed premises", which, in effect, holds landlords responsible for criminal activities occurring on their properties. It also provides for a means of punishment.

This city ordinance (244.2020) provides that, where disorderly conduct occurs on the licensed premises, an officer attached to the Community Crime Prevention/SAFE unit (commonly known as "community police') may sent a letter of warning to the license holder noting the violation and directing him or her to take appropriate action. The ordinance provides that, if three such letters have been sent in a year's period regarding the same building, the Director of Inspections may recommend to the Minneapolis City Council that the rental license for the building "be denied, revoked, suspended, or not renewed." In that event, the owner could not lawfully rent any units. The economic value of the building would become zero.

The ordinance states that the Director of Inspections may postpone or discontinue an action to revoke a rental license "if it appears that the licensee has taken appropriate measures which will prevent further instances of disorderly conduct" - i.e., has evicted the tenant(s) responsible for the disorderly conduct. There is, of course, no obligation upon the city police to provide a particular level of police services to the landlord or any other city resident.

It should be noted that, despite its euphemistic title, CCP/SAFE is a political and public-relations unit within the Minneapolis Police Department whose officers are widely perceived to be accountable to individual City Council members. (In September 2000, Council Member Joe Biernat, chair of the Public Safety committee, is reported to have ordered the SAFE officers to lobby his fellow Council members to vote in favor of closing down the "Hard Times Cafe" in southeast Minneapolis because of alleged drug dealing on or near the premises.) About sixty persons are employed in this unit which has had an annual budget of more than $3 million. Half are police officers, half civilians.

Case Background

Russ Erkkila is a former executive recruiter in the computer industry. He retired in 1995 after a head injury which affected his short-term memory. In 1978, Erkkila and a partner, Earl Peterson, purchased a fiveplex apartment located at 2204 Emerson Avenue North in Minneapolis for $78,000. Peterson managed the building between 1978 and 1992. In 1992, Erkkila and Peterson sold the building to Kathy Welch of Minneapolis for $65,000. They financed most of the purchase on a Contract for Deed.

In February 1997, Erkkila received the property back from Welch, who simply walked away. Erkkila found the property in terrible condition. The building was cockroach-infested. Many maintenance repairs needed to be made. The state had filed a tax lien against the property. There were $5,000 to $6,000 in unpaid water bills. Erkkila filled a large dumpster with debris from the building. An appraiser now valued the building at $35,000. Erkkila spent approximately $100,000 in renovating this building over the next two years.

First Warning Letter from SAFE

On or about December 15, 1997, the Minneapolis police did a drug raid on Erkkila's building, breaking down the doors. They found a small amount of marijuana (approximately one -quarter ounce) and drug paraphrenalia in apartment #2, but no "saleable drugs". The police did find drugs in apartment #4.

Erkkila promptly evicted the tenant in apartment #4. She was gone within a week. Erkkila also delivered a letter of eviction to the tenant in apartment #2. However, this tenant argued with Erkkila that he ought not to be evicted because he did not sell drugs and no significant drugs were found on him. Erkkila checked out his story by calling the 4th precinct police station. The head of the CRT unit (community response team) confirmed that the police had not bought drugs in apartment #2 and did not find any significant drugs. Erkkila believed that this confirmed the tenant's story, so he rescinded the eviction notice.

Three or four days after this incident, Erkkila visited the CCP/SAFE offices in downtown Minneapolis and talked with the officer assigned to his area, Hillary Freeman. Freeman showed Erkkila a warning letter that SAFE had written to him about this incident. She also recommended that Erkkila evict the residents of both apartments #2 and #4.

SAFE sent the letter of warning to Erkkila by registered mail. Erkkila did not pick it up at the Post Office because he already knew its contents and had taken appropriate action.

Second Warning Letter (actually, two of them)

(1) Erkkila evicted a tenant from apartment #3. This tenant vacated the apartment on March 19, 1998. However, her teenage son gave an extra set of keys to the apartment to some gang members. After Erkkila's maintenance man had locked the vacant apartment and left the building on March 20th, the gang members moved in and began to party. The partying continued through the weekend. On Monday morning, the maintenance man heard noises and spotted intruders in the vacant apartment. He promptly dialed 911. When the police came through the front door, the gang members went out the back. However, the police did find one gang member in bed, along with some drugs and two stolen guns.

On or about April 10, 1998, Erkkila received a warning letter from SAFE about this incident. He was annoyed. After all, his building had been burglarized and his own employee was the one who had alerted the police to the problem. Over the phone, SAFE officer Hillary Freeman told Erkkila that "it didn't matter" that he, Erkkila, had reported the crime. In a state of agitation, Erkkila went to the SAFE office on April 17th and had a heated argument with Freeman and her partner, Scott Olson. Eventually they agreed that Erkkila should not have received the warning letter and it was rescinded.

(2) Unbeknowst to Erkkila or the SAFE officers at the time of this meeting, the Minneapolis police had done a drug raid on apartment #2 the day before - on April 16, 1998. This time, they found drugs. It should be reported that Erkkila had personally visited the 4th precinct station in March or April 1998 to tell the police of his suspicions that drug dealing was occurring in the buidling. He also gave the police a copy of his keys. This information from Erkkila may have precipitated the drug raid on April 16, 1998.

Erkkila was out of town for about a week in late April. During this time, SAFE sent him the second "second warning letter" related to the April 16th incident. Erkkila's teenage son, Jeff, put this letter in Erkkila's "receipt basket" (for unpaid bills) rather than in the incoming letters basket. Erkkila therefore did not know about this letter until July - after he received his third warning letter. The second warning letter included a request from SAFE that Erkkila develop a "management plan" - something that Erkkila and Freeman had discussed at the April 17th meeting.

Third Warning Letter

In the latter part of July 1998, Minneapolis police officers arrested two men who were talking on the street about fifty feet away from Erkkila's building. One of the men was a known drug dealer. The other was a tenant in Erkkila's apartment building. The police found drugs on the drug dealer but not on the tenant. When Erkkila learned about this, he promptly filed for an Unlawful Detainer against the tenant to vacate the apartment. The case was heard in Housing Court on August 12, 1998. After reviewing the case, an assistant county attorney strongly recommended that Erkkila not evict the tenant. The judge agreed, even after Erkkila explained the situation with the warning letters. So Erkkila signed an agreement allowing the tenant to stay with a restricted lease.

To the best of Erkkila's knowledge, the charges were dropped against both men. The police changed their story. At first, they said that the men had been arrested on the curb of the street near Erkkila's building. Then they said it was on the front steps of his building. (Keep in mind that the ordinance requires that the disorderly conduct take place on the licensee's premises before a warning letter can be sent.) Erkkila's own conversation with the alleged perpetrator revealed that the conversation took place well away from his property. The two men had not been talking about drugs at all.

The Aftermath

Erkkila received, with his third warning letter, a statement that SAFE would recommend that his rental license be revoked. When Erkkila explained what he had done to rid the building of crime, Hillary Freeman replied that it was "too little, too late." Apparently, the main complaint against Erkkila was that he had not responded to the first two warning letters, even though he had addressed the problems raised in one of these letters by prompt and effective action. Also, officer Freeman complained that Erkkila had not submitted a written "management plan". Erkkila had, however, at Freeman's urging, hired Housing Plus in April 1998 to do his tenant screening.

Erkkila appealed the license-revocation recommendation to a committee consisting of landlords which he described as a "kangaroo court". A member of that committee comment that the fact that Erkkila's son had misplaced the second warning letter showed that Erkkila was a "poor manager". The decision next went to a subcommittee of the Minneapolis City Council chaired by Joe Biernat. Erkkila and his attorney, Gary Wood, requested a copy of the findings and notes from the landlords' committee meeting to prepare for this one. They never received anything. The letter from the City Council committee stated that Erkkila would not be allowed to introduce any new information or issues at the meeting.

The City Council subcommittee meeting was held on October 21, 1998. The most memorable event was that, even though Erkkila was not allowed to introduce new material, Hillary Freeman pulled out a letter which she said was written by anonymous "neighbors" alleging that three incidents had occurred in Erkkila's building involving gun shots. Erkkila alleges that this was a complete fabrication. He knows of one gunshot incident that occurred elsewhere in the neighborhood; none in his building. Freeman also said that a number of suspicious-looking cars had visited Erkkila's building. Erkkila later checked this accusation out with his tenants, who denied its accuracy.

The members of this subcommittee appeared to Erkkila to be "inattentive" when he testified but quite attentive when Freeman testified. Chairman Joe Biernat was frank about his preferences. "We consider Hillary Freeman to be a goddess," he stated at this meeting. He also said: "We've never gone against a SAFE unit recommendation." These statements seemed to Erkkila to indicate that the subcommittee would recommend that the full City Council revoke Erkkila's rental license when it met to consider the matter on Friday, October 30, 1998 - which indeed it did.

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