Ramsey County Board member's nonprofit owes nearly $40,000 in back taxes

A housing nonprofit run by a Ramsey County Board member owes nearly $40,000 in property taxes on 14 properties, including a St. Paul duplex that soon may face forfeiture.

Commissioner Blake Huffman, a former Wells Fargo Home Mortgage executive who ran briefly last year for governor, formed Journey Home Minnesota in 2008 to provide housing for financially struggling veterans, their families and single parents. Huffman and the nonprofit own 18 properties in the metro area and one on the North Shore; another property in Shoreview belongs to a limited liability corporation that lists Huffman as its sole registered agent.

Of those 20 properties, 14 owed a total of $39,673 in overdue taxes as of Tuesday, according to tax records. Huffman's LLC also had racked up $3,711 in delinquent taxes on its Shoreview property before paying them in the past week.

Huffman said in an interview that his nonprofit has run into cash-flow issues while in the process of selling off several of its properties.

"It's really kind of boring," Huffman said. "We had up to 45 houses at one point. We thought it was too big, so we're shrinking our portfolio. I've talked to the banks and the county, and our commitment is to get caught up by the end of July, in the next week or so."

He said that the nonprofit is "perfectly fine" financially.

"It's a short-term issue," he said. "We have about four properties left to downsize. Once that happens we're back to where we need to be."

Some taxes have been overdue for years. Journey Home is behind on taxes for a vacant Sherburne Avenue duplex in St. Paul that were due in 2016, 2017 and the first half of 2018.

Minnesota law allows owners three years to pay delinquent taxes before the state seizes the property and has it auctioned off to pay the debt. For Journey Home, the deadline on the Sherburne duplex — July 31 — is fast approaching. The property was in arrears by $9,323 as of Tuesday, and the forfeiture process has begun.

Huffman has a meeting scheduled for Thursday with county tax officials to sign a confession of judgment, according to the county tax office. If the Sherburne duplex qualifies for a confession, the county auditor would set up a payment plan and Journey Home won't lose the property.

Two other properties owned by Journey Home are also delinquent, which means that they're more than a year behind on their taxes.

Journey Home, according to Huffman, builds homes, buys and remodels foreclosed units and receives donated properties, then rents them at below market rates. The intended beneficiaries are struggling vets and families at risk.

Huffman, 53, served on the Shoreview City Council for 16 years before he was elected to the Ramsey County Board in 2012, representing the suburbs in the northern third of the county. He was reelected with no opposition in 2016.

As a commissioner, Huffman has been a strong supporter of economic development and an advocate for the cleanup and redevelopment of the former Twin Cities Army Ammunition Plant site. His County Board salary is $92,000.

The board has raised property taxes in each of the past three years. Huffman voted for a two-year spending plan that approved a 4.3 percent hike in the property tax levy in 2018 and calls for another 4.3 percent increase in 2019.

Huffman has faced late payment problems in the past on his income taxes. Minnesota twice filed income tax liens on him that totaled more than $30,000 — for $22,006 in 2009 and $10,141 in 2013. He paid off the debts in 2015 and 2016, respectively, and the liens were released, according to court records.

Huffman announced he was running as a Republican for governor in April 2017, touting his management of Journey Home Minnesota and his time on the County Board. He said at the time that Journey Home was growing statewide and announced plans to build homes in northern Minnesota.

During his campaign, a DFL-aligned group circulated documents about the two income tax liens. Huffman said he had mistakenly paid state taxes to Iowa, where he was working for Wells Fargo at the time, when he should have paid them to Minnesota, where he maintained his home.

He bowed out of the race for the GOP nomination in September, saying he was ending his bid, in part, because of the nonprofit's rapid growth. "Because of my work as a commissioner and at the nonprofit, I find myself struggling to find time to execute an effective and quality campaign," he said in a statement ending the race.

Journey Home does not pay Huffman or any other employees, according to its tax filing. The document shows that Huffman is the only board member who spends more than an hour a week working for the organization.

Journey Home rents to families that earn no more than 80 percent of the area median income, and it charges no more than 30 percent of their income on rent. Any properties that it rents out below market value may qualify for property tax exemptions under state law.

"We could apply to become property-tax-exempt, but we made a decision that we don't want to do that," Huffman said.

Among the properties on which Journey Home owes taxes is a vacant commercial lot in Burnsville more than $15,000 overdue. The parcel, assessed at $273,500, was donated to the nonprofit and has a property tax tab of more than $7,500 a year. Huffman said they hope to sell it to raise revenue for housing projects.

Huffman said he plans to get Journey Home down to around 20 homes serving about 20 families. The nonprofit expects to sell two properties "in the coming days," which will give it the cash to pay the back taxes, he said.

Even as it sells off some properties, however, Journey Home was still actively buying other properties as recently as November. It is building a house now in Maplewood for a couple with two children with serious illnesses that had been struggling to find an affordable place to rent, Huffman said.

"We're very proud of what we do," he said. "We're not a government-funded organization. We have a lot of volunteers, and we're trying to do our role in solving affordable housing here."

Greg Stanley • 612-673-4882