Multilevel marketing moguls turned housing profiteers come to Iowa

Matt Chapman brings us up to date on a company’s plan to impose exorbitant rent hikes on him and his neighbors. -promoted by Laura Belin

When Havenpark Capital Partners bought up five manufactured housing parks in Iowa, they brought tension, anger and fear along for the ride. On a Friday afternoon before any of us knew they had bought our Waukee community, a notice was posted on all 300 doors in Midwest Country Estates that the rent was going up 69 percent in 60 days. Residents in the other four communities received similar notes.

We immediately reached out to each other through Facebook and set out to knock on the elderly neighbors’ doors to let them know they weren’t alone. We told them we would stand with them and fight this. Our goal was that no one would lose their home, if we could help it.

We had two community meetings with Legal Aid and one organizational meeting. We enjoyed lots of press getting our stories out. It seems that finally shamed Havenpark Capital to come meet with the folks whose homes sat on the land they just purchased. The Havenpark Capital executives fired up their jet and flew in from Utah for some damage control.

After a meeting with Golfveiw in North Liberty, they headed to Des Moines. The event for Midwest Country Estates residents featured brownies, cookies, coffee, and other snacks at the West Des Moines Sheraton, along with a couple of police officers. I imagine the executives who raised our rent by close to 70 percent may have been a bit timid about being in close proximity to the community members they were gouging.

While our meetings were open to anyone who behaved (just like our Facebook page), the meeting at the Sheraton had different ground rules: no press, no lawyers. Only those living in Midwest Country Estates could attend.

ANTONELLI PUTS ON A NICE FACE…THEN DROPS THE MASK

Before the meeting started, I was sitting in the front row and shook hands with Anthony Antonelli, the principal at Havenpark. After introducing myself, I said, “I’ve read a lot about you.”

“Some of it good, I hope,” he replied. It hadn’t been. I shook hands with Havenpark’s managing partner Nathan Ricks and managing director Ramie Rajabi as well.

After a brief preview of the agenda for the meeting, Rajabi handed the microphone over to Antonelli.

At first, he seemed to need a minute to get organized, and then you could see why he has been such a effective pitchman at Nu Skin Enterprises, a multilevel marketing company that has occasionally been accused of making deceptive claims or operating pyramid schemes.

Antonelli said many had sent “thoughtful” comments, and he emitted a charm that appealed to some community members.

He said Havenpark Capital’s actions were wrong, and that they would only increase the rent to $400 in June, then to $500 next April. He said “mea culpa” and told us our rent base would still go up, but we would get a $100 monthly credit through next March. We were told to thank Ricks, as he was subsidizing our rent until April 2020.

Now that seems weird, to thank Ricks for gouging us a little less badly. Rent still will go up by over 30 percent this month. Then it will go up another by another 35 percent next April. There must be a reason they are giving us a credit and not just setting the lease at $400. That’s concerning.

His mask then came off a little, and he said something along the lines of, “There have been a few to run around and state falsehoods and absolute lies, disparaging remarks making stuff up, slander, and even anonymous threats.” He seemed like a man who was used to hearing yes from anyone he interacts with.

Other than the anonymous threats, I think he was referring to me. I did receive a cease and desist order from Havenpark’s attorneys (discussed below). I do like standing up to powerful people, or to quasi-powerful ones like Antonelli, so I enjoyed that part of his presentation. Front row center.

I believe he was just angry that we are winning the public relations war. We are winning because we are on the right side.

NO-SHOWS AT THE FIRST COMMUNITY MEETING

I spoke to one of the Havenpark Capital district mangers who is in charge of parks in Minnesota and elsewhere in the region. This was early on, a few days before our first meeting with Legal Aid.

I invited him to the meeting and he said they could send someone to answer a few questions. He asked me if I had an agenda and I told him “Havenpark Capital has the block from six to seven, then Legal Aid has the floor from seven to eight.” He said something like, “Oh, Legal Aid is going to be there?” That was the last I heard of anyone from Havenpark Capital speaking to us until they gave us an hour at the Sheraton over a month later.

I was explaining to the same district manager how we were helping our neighbors cope with hardships created by rent hike and compliance with the rules and regulations. He cut me off and said something like, “That’s not our part of the business.”

THREATS TO STOP ORGANIZING

While many folks will be fine financially, and some welcome the change in management at Midwest Country Estates, a lot of people are barely getting by now. Talking with neighbors at their doors, you learn just how hard this increase will be for some. We have elderly folks on fixed incomes, single mothers, disabled folks, and some who are slightly above the fiscal cliff. Folks dealing with cancer and other severe health issues live in here, some with caregiver family members.

After our first meeting I went and knocked on doors to give out 211 cards from United Way and advise folks to sign up for Legal Aid. If you call 211, they will help you to look for programs from food assistance to housing. The goal was to help take the sting out of the 69 percent rent increase. I also felt, and still do, that everyone in here who can have an attorney, should have an attorney. Havenpark Capital has demonstrated that profits are more important to them than people.

A couple of people called me, saying they had received a three-day notice. One woman was in tears, thinking she had three days to get out of the park.

My advice was to call Legal Aid immediately. They had all gotten behind in their rent and had worked it out where they could pay it off over time. My understanding was the three-day notices said to pay the entire amount owed. After talking to an attorney, they found out that the arrangement with the old management was still valid.

We had this happen again this month, and that person has had a meeting with an attorney from Legal Aid.

In talking to neighbors, I said what I still think is true: Havenpark Capital will not be happy with just our lot rents. I believe there is much more money to be made in selling homes on contract, and those of us who have paid off our homes are occupying a spot that could be a money-maker. Luckily, the Iowa Code does prohibit an eviction solely for the purpose of putting another home in its place.

I received a cease and desist letter from Havenpark Capital the very day we had a news conference about the massive rent increases at the statehouse. They claimed I was making false and defamatory statements and needed to stop making unwanted solicitations.

My attorney wrote back that I was “distributing information that might help them [the community members] cope with the potentially devastating effect of the proposed rate hike.” It’s a good read, I recommend it.

WHAT TO DO WITH NO LEGAL PROTECTIONS?

The legislature had a chance to help mobile home park residents, and many people tried in good faith to do so. The day before lawmakers adjourned for the year, the Iowa Senate unanimously approved a housing bill with an amendment that would have required 180 days notice (instead of the current 60 days) to increase the rent for tenants of a mobile home park, and would have changed the definition of “good cause” allowing a rental agreement to be canceled. Unfortunately, Iowa House leaders never brought the bill up in the lower chamber.

That left us with no other option than to reach out to local government, faith-based groups, Legal Aid, Veterans Affairs, and union groups, for guidance and resources. Then we held events and sent out media alerts.

Hope Lutheran Church and Westview Church Christian Services gave us a venue multiple times. Labor organizations and Habitat for Humanity are ready to help those who need assistance complying with the strict new lease as far as upkeep goes. And so are many neighbors. One day, I sent an email to United Way and they called me back in ten minutes: “We’re at a table with three lawyers, Matt. What’s going on?” This is what Iowa’s about.

And a shout out to Christian Services. They have a food pantry and healthcare opportunities for anyone, you just need to be there at the specific time. They spend a lot of time on helping those that need it to get by. You would be surprised by the number of folks who need these services in a booming city like Waukee. But that’s a topic for another article, another day.

HAVENPARK CAPITAL’S PREDATORY LEASE

The second and third meeting with Legal Aid was to go over our lease. It has changed again, so we will need to have a fourth meeting on June 26. This lease must be signed by the end of June, but the $100 credit language is not in the second draft. That needs to be in there before we sign, so we may be waiting for a third lease to be finalized.

The first lease contained an interesting clause saying that even though you own your home, you can’t move it if they say so. In other words, if you were to be evicted, Havenpark Capital could claim your home. Under “RESIDENT’S USE OF PREMISES,” the last line on page 4 read, “Resident shall not remove the home from the Homesite without Landlord’s prior written consent, which may be withheld for any reason and/or no reason.”

If you want to move your home, Havenpark Capital can deny you that ability. What do you do then, walk away? Abandon it so they can rent/sell it to somebody else?

The day I picked up my lease at the office and read it, I knew something wasn’t right. Many other one-sided clauses also seemed drafted to exploit the renter.

A while later we received an updated lease to sign, this time delivered to our doors in a manila envelope. I looked at the same clause on page 4 (RESIDENT’S USE OF PREMISES), and it had changed:

Resident shall not remove the home from the Homesite without Landlord’s prior written consent, which may be withheld for any reason permitted under Iowa law.

This reads to me as, if Iowa law says we can take your home, we will.

Now would be is a good time to take a break and watch John Oliver’s segment on manufactured housing, which appeared this spring on his show Last Week Tonight. Go to this mark on YouTube to get the flavor of this clause. Listening to Franke Rolfe speak about the community members he will visit on this clip is reminiscent of Antonelli’s tone at our meeting at the Sheraton. The manufactured housing safari Rolfe takes potential investors to is a demonstration in how these kinds of corporations view the community members in the parks they own.

DIVIDE AND CONQUER

Going back to the meeting at the Sheraton, Antonelli was complaining about angry residents, and I was saying diplomacy is how you get things done, when a young Latino woman spoke up. Antonelli had been using a demeaning tone. He asked if she was the anonymous threat, to which she said no. He then said there would be time for questions later and dismissed her.

Kicking back into smooth mode, Antonelli talked about how great the folks with perfect yards were and how frustrating it must be for them to live next to a not-so-perfect yard. It was obvious pandering and designed to be divisive and inflammatory. After years of conning folks for Nu Skin, his sales skills in pitting neighbors against each other was warm butter smooth.

We have all lived next to each other for years, and some grudges go deep. Some welcome the change and harbor some anger in this regard, and that group seemed to be responding to Antonelli and other speakers who encouraged animosity between neighbors.

DEMONSTRATING HOW OUR HOMES ARE NOT SECURE

Antonelli then went through four or five articles that someone had recently printed for him about manufactured housing parks closing and listed them off.

“Did you know that if you go on Google earth you could do a regression?” he said in his trustworthy, aw shucks voice.

He asked for a volunteer and chose me. Then he asked us if we had ever heard of Huxley.

He showed me a Google satellite map and asked me what year it was. (2010) “Notice trees on this side?” he asked. It was a trailer park like ours, where the east half was parallel neat little boxes and the west half was mostly covered with some older trees.

The next map is from 2011. He showed me how all the homes and trees were gone on the older side of the park. It was barren ground like a surface that had been worked to prepare for construction.

And then a third from 2012, which showed a new subdivision where the old part of the trailer court sat. The new part of the park was saved, while the old half was turned into a suburb.

This felt like a threat. I do not know what else you could call it, showing a manufactured housing park where the older half was wiped off the map. People had lived there and were now gone. I perceived that he was demonstrating some power.

“That’s chilling for the folks on the older side of our park,” I responded.

He said it was chilling for everyone, and just went on about how manufactured housing was dying across the country.

He then said they were going to add a dog park to a couple oohs and a clap or two. It was a weird moment, one of many that had happened and were to come.

“Waukee just built a state-of-the-art dog park,” I heard from behind me.

“Oh, so you don’t need a dog park?” said Antonelli. He must have heard it too and sounded petty.

The microphone then went to Ricks. who explained how the $100 credit would work.

Ricks claimed our homes were threatened, using the term “precarious situation” multiple times. He claimed others wanted to build where our homes sit and displace us. That’s why Havenpark had to pay so much for the park.

Ricks seemed to be in charge of upkeep and infrastructure. He spoke about the dog park and installing street lighting in the next few months. A pavilion and the roads should be done before winter.

The microphone went back to Antonelli to take some questions.

I asked how the $100 credit was applied and was told, you will still get billed $500 (or $525), but you will get a $100-dollar credit until April 2020, when your rent will go up to $500 (or $525). After that it will go up at 3 to 4 percent, but no time or date on the later increases. (I confirmed all this with Ricks after the meeting.)

This needs to be in writing before anyone signs a lease. While I think this offer was made in good faith, Havenpark has shown they are capable of mistakes.

A woman said we should understand that if someone’s yard is messy, maybe they are having problems inside as well. The unspoken implication was a plea to show compassion for a person who may suffer from some illness.

You would have been able to hear a pin drop after she spoke. In hindsight, I regret not amplifying that woman’s sentiment and feel a bit of shame for not pursuing that point.

Antonelli had nothing to add, and the crowd didn’t respond. It is fair to say that Antonelli liked praising those with a perfect yard and no issue with the increase. He did that multiple times.

What this all amounts to is that we won a concession. I don’t know that “won” is the right word, but we got a little relief for a little while. Havenpark Capital conceded to raise our rent to only to $400 or $425 through March 2020. We conceded to pay the $500 to $525, beginning in April 2020. We have time to adjust, so everyone can see if they will be able to make it when April comes.

A strange moment came at the end of the meeting: a smattering of applause. I am sure some simply meant to be polite, but others thanked Antonelli and Ricks and struck up conversations with them.

Oh, to be a fly on the wall at the Havenpark Capital meeting with Golf View residents from North Liberty earlier the same day. From what I’ve read and heard, something tells me there wasn’t any applause or thanks at the end of that meeting.

EPILOGUE

There’s more to this story. I chose the title “Multilevel marketing moguls turned housing profiteers” because Antonelli and Ricks strike me as old time hucksters. This Washington Post story from 1991 featured a young family. It gives you the vibe of what Antonelli, who was classified as a “Blue Diamond” in the Nu Skin ranking system (earning tens of thousands of dollars a month), was up to at the time. From the article by Marjorie Williams:

The Rossers go to the Tysons Corner Marriott every Tuesday night for Antonelli’s Opportunity Meeting. This has meant giving up their Bible study group, which also meets Tuesday nights.

As a Blue Diamond, Antonelli was four levels above the folks profiled in the article. That meant he got a cut every month from all those in the pyramid below him.

John Oliver did a piece for his show that dove into the world of multilevel marketing, which often resembles pyramid schemes. This is how Antonelli and Ricks made money before they were shaking down vulnerable folks in the Midwest, doubling their rent and creating onerous rules and fines.

I still haven’t figured out why they switched from Nu Skin to mobile home park acquisition. Perhaps it was the $47 million paid to settle a lawsuit leveled at Nu Skin? That is just a guess.

Either way, they both profit mightily from industries that seem to skirt the law. They have made millions from squeezing as much money as possible from folks, the vast majority of whom will never realize their entrepreneurial dreams with Nu Skin. Now they have moved on to folks trapped by owning their homes but struggling to cover a huge increase in lot rent. That’s just the beginning, though. I reckon they imagine a time when more homes in their parks are being bought on their contract.

I do not trust this company, but time will tell. Havenpark Capital are aggressive by their own admission and apologized to the tenants for the massive rent hike.

There are many more stories in Midwest Country Estates to share. The impact on the 300-plus households should be documented now and after the 69 percent raise in rent kicks in next April. I‘ll be back with some updates about folks affected by the rent-gouging.

We’re not just boxes lined up on Google satellite view, a portion of us in the older section hidden under some older trees like Huxley. Communities are people. Those images Antonelli showed me where the old mobile homes were removed, a community used to live there. It bears repeating. Communities are people.

That’s hard to understand if you just fly into a couple backwater Midwest cities to do some public relations damage control and a little minor conceding so you can keep the ball rolling. Or maybe it’s hard because you choose to see communities as seen through plane windows. Or on Google earth.

That is a choice these unscrupulous men have no problem making, even if it impacts some of Iowa’s most vulnerable citizens.

Top image: Anthony Antonelli speaking to Midwest Country Estates residents at the West Des Moines Sheraton. Photo by Matt Chapman, used with permission.

  • Speaking of Huxley...

    I have a friend in Huxley who has followed development issues there for years, and is often not happy with Huxley’s priorities and policies. After the Huxley stories I’ve heard, the anecdote in the post above is no surprise.

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