VIDEO: Richfield Council Member Wroge Puts The Cornerstone Group's President in the Hot Seat

The beautiful development, once a property worth $9.3 million, is now being appraised at less than $4 million—the result of poor economic times, according to Colleen Carey, owner of the property and president the development firm The Cornerstone Group.

Pair the enormous decrease in the property’s value with retail tenants lost as a result of the Lyndale Avenue bridge reconstruction and you’ll see that The Cornerstone Group has found itself in a financial pickle—and members of the Richfield City Council, especially Council Member Fred Wroge, wanted answers Tuesday night.

“I find it hard to believe that … Richfield [property values] went down 22 percent in commercial properties and your’s went down over 60 percent,” Wroge said. “And I don’t think it’s fair that you’re taking money out of the project.”

Carey told the council that she and her company had anticipated difficulty in making its full mortgage payments years ago and had gone to its lender for help. Unfortunately, Carey said, since the payments were being made the lender declined to modify the loan. Fast-forward a couple years and, as anticipated, The Cornerstone Group was unable to make its payments.

Carey said the economy was to blame in the decreased value of the property and the loss of traffic flow when the Lyndale Avenue bridge was out caused five tenants to leave. While four of the five tenants were replaced, The Cornerstone Group was unable to get the once higher rent rates.

Wroge insisted that he didn’t believe the Lyndale Avenue Bridge Project caused the loss in tenants.

“Broadway Pizza still exists, the gas station still exists, the hoover place still exists, Super America still exists,” Wroge stated. “But you blame the bridge on the problem, instead of the parking, the issues of when you decided to build, the city allowing you to build it the way your did. You’re blaming everybody else except for the structure itself. Everybody else stayed in business through that and through the 76^th Street bridge.”

On June 24, 2011 CW Capital, the mortgage lender on the property, held a sheriff sale after a deal The Cornerstone Group had made with an outside investor fell through just two days before. The investor has resubmitted its offer and Carey has resubmitted it to the lender. However, since the sheriff sale has taken place the account is now in a “different department” and has a new staff person managing it. As a result, she probably won’t know if they accept the offer until the end of next week.

Carey attempted to put an optimistic spin on the story, assuring the council that its TIF (tax increment financing) loan on the property would be paid. Further, she stated that she was still capable of continuing to develop because she wouldn’t take financial loss if Kensington Park went back to the lender.

This information didn’t seem to sit well with Wroge. Current plans for Lyndale Garden Center include , but Wroge believed that was because the funds weren’t there to do a complete rebuild.

“I think its because you don’t have enough money do it right,” Wroge said.

Carey insisted the plans to refurbish the building made the most sense after the structure was found to be sound by a contractor.

While other council members expressed confidence in Carey’s and The Cornerstone Group’s ability to take on the Lyndale Garden Center project, Carey told the council that she needed to make sure they were all in before she made a large payment.

“If you’re not behind me then we shouldn’t be doing it and you’ve got a problem to solve on the garden center,” she said. “I’m saying I got theses purchase agreements, I’ve got this envisioned … I’m willing to work with you to make this happen if you want to work with me. But I also have to know pretty soon.”

In the end, council members all agreed that they would move forward with The Cornerstone Group on the project.

Click "play" on the videos above to see Wroge's comments about the Lyndale Avenue bridge "excuse" and Carey's request for the council's word on its partnership in the Lyndale Garden Center project.