Neighbors fret as St. Paul gas station linked to Wisconsin religious group works to reopen

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By David Hanners

Updated: 01/10/2012 11:56:43 PM CST
The Mobil station at Grand and Smith avenues in St. Paul has sat derelict for months, victim of a bankruptcy involving a Wisconsin group that some former members call a religious cult.

But as the city of St. Paul reviews a business license application for the property's new owner, neighborhood groups are concerned the new owner is actually the old one with a different name.

The doubts are voiced because Minneapolis lawyer Naomi Isaacson was president of Yehud-Monosson USA Inc., the bankrupt company that owned the gas station, and also was listed as purchaser on behalf of the new owner, Nir Yitzhak LLC, when the property changed hands Sept. 1.

Nir Yitzhak was incorporated last year in New York by Hastings lawyer Rebekah Nett, who represents Yehud-Monosson and is connected to the Dr. R.C. Samanta Roy Institute of Science and Technology Inc., or SIST, the Wisconsin-based religious group where Isaacson serves as chief executive officer.
Neighborhood groups express worry about the connection between past and present owners.

"Over the last several weeks, we've realized it basically appears to be the same organization that owns it, and I think there's a lot of concerns about the viability of that business and whether they'd be able to follow through with what they've promised," said Tom Brock, founder of the Little Bohemia Neighborhood Association.

"I don't think anybody wants to see it returned to a crappy gas station," he said.

Isaacson and Nett did not return phone messages or emails asking for comment. Last week, U.S. Bankruptcy Judge Nancy Dreher issued a warrant for Isaacson's arrest for ignoring court orders to turn over records to the trustee handling Yehud-Monosson's bankruptcy. She is not in custody.

Yehud-Monosson is a wholly owned subsidiary of SIST, and Isaacson and Nett are followers of SIST's founder, Avraham Cohen. He considers himself an Orthodox Jew, albeit one who believes Jesus is God, and his teachings are harshly critical of Christianity and the Catholic Church.

In the bankruptcy case, Nett and Isaacson have filed pleadings laden with anti-Catholic slurs. They accuse Dreher, the bankruptcy trustee and others of being part of a Catholic conspiracy to take Yehud-Monosson's property and give it to Catholics.

At a hearing last week, Dreher fined each $5,000 for their rhetoric.

The gas station is to be managed by Marcus Ritland, a follower of Cohen who managed the Mobil station for Yehud-Monosson. He said in an interview that Isaacson is not involved.

"She's got nothing to do with me operating a gas station" he said. "I don't want her name involved with me and the gas station."

He declined to discuss the new owner.

St. Paul City Attorney Sara Grewing said that the city has granted Ritland a license to operate a convenience store, and that her office this week is reviewing the application for a gas station.

The new business will be known as Capitol Gateway, and it has agreed to several restrictions requested by neighborhood groups, including the West 7th/Fort Road Federation.

Last November, the federation passed a resolution saying it opposed the new license "on the grounds that we lack confidence in the proposed owners based on past practices on the site."

"It's not that people are against the gas station," said Betty Moran, a community organizer with the federation. "They're in favor of it. They wanted to make sure it was going to be a well-run business."

The history of the gas station at 236 Grand is disclosed in U.S. Bankruptcy Court records, Ramsey County property files, documents filed with the city of St. Paul and business filings in New York and Minnesota.

In December 2004, William Egan, who operated Egan Oil Corp., a gas distributorship in Anoka, sold the property to Midwest Oil of Minnesota. Midwest Oil was a holding company formed in 2003 and was a subsidiary of SIST.

SIST, based in Shawano, Wis., is a nonprofit and has said in tax filings its purpose is "education." But former members say it is a religious cult led by Cohen. Like SIST's other businesses in Minnesota and Wisconsin, the Mobil station was staffed by Cohen followers who worked for free.

Brock said people in the neighborhood believed Midwest Oil let the business decline.

"When we moved here 10 or 11 years ago, it was a full-service gas station," he said. "It had a repair shop, a towing service affiliated with AAA. That stuff all started going away."

Midwest Oil filed for bankruptcy in Delaware in 2009. But after several dismissals and transfers, the company's Minnesota properties - now down to two gas stations, a fourplex apartment and a coin collection - merged into a new company named Yehud-Monosson, which itself filed for bankruptcy.

Yehud-Monosson filed a Chapter 11 bankruptcy, seeking to keep its assets and hold creditors at bay while it reorganized its finances. But after a Justice Department trustee concluded the company filed its case in bad faith to foil creditors, a judge converted the case to Chapter 7, which deals with liquidation.

The change allowed court-appointed trustee Nauni Manty to sell Yehud-Monosson's assets to pay the company's nine unsecured creditors, who were owed more than $259,000.

On July 23, Manty issued a notice of sale saying Egan had offered to buy back the property for $5,000. At the time, Ramsey County valued the property at $781,400, much less than the almost $2.1 million Yehud-Monosson owed Egan as holder of the second mortgage.

Manty wrote that allowing Egan to take back his property was a good idea because "the costs of liquidation would quickly offset any value to the estate."

Although Nett filed objections to Manty's notices of sale of the other properties, she did not object to the sale of 236 Grand to Egan. The trustee's sale was finalized Aug. 25.

Six days later, on Aug. 31, Nett incorporated two entities as limited liability companies with the New York State Department of State.

One was Nir Yitzhak, taking its name from a kibbutz in Israel, and the other was Nahal Taninim, named after a river in Israel. (Yehud-Monosson is named after a dual municipality in that country.)

Both companies list the same post office box in Baltimore as their address. Cohen has a home in Pikesville, a suburb of Baltimore.

On Sept. 1, Egan, who did not return calls for comment, signed a contract for deed selling the property to Nir Yitzhak. Isaacson signed the contract as "purchaser" for Nir Yitzhak.

The purchase price: $1,944,887. Nir Yitzhak paid $100,000 down in cash and agreed to assume the first mortgage of $844,887, which was held by a Texas company.

That left $1 million, and Nir Yitzhak agreed to pay Egan $10,000 a month, with 4 percent interest, until Sept. 1, 2014, when the balance is due in full.

On the day of the sale, Nir Yitzhak, one of the New York companies, leased the property to Nahal Taninim, the other New York company, for $1, according to a "Memorandum of Lease" signed by Isaacson.

A week later, Isaacson, listing herself as Nir Yitzhak's "chief manager," wrote St. Paul's Department of Safety and Inspections and authorized Nahal Taninim to seek the licenses needed to open a gas station and convenience store that sold tobacco and alcohol.

According to a document Nir Yitzhak provided to the city in November, on Sept. 27 the company's unnamed managers elected Yocheved Goldman and Kaleiv Olmert as "co-chief manager." Goldman was also named the company's secretary.

The document does not identify Goldman or Olmert, and Ritman would not say who they are. Attempts by the Pioneer Press to locate them have been unavailing.

At present, 236 Grand has gas pumps, a small retail area, three service bays and a car wash. A banner attached to the big Mobil sign near the corner says, "Capitol Gateway Coming Soon."

The new owners planned a major renovation that could've cost $2 million, estimated Jack Ovick, the Minneapolis architect Marcus Ritland approached to design the new facility.

"They weren't messing around," Ovick said. "Marcus and whoever Marcus was working with all thought this was a good location." The plans were later dropped, he said.

Ritland later withdrew the application to sell 3.2 beer. The city granted the license to sell retail food and tobacco Sept. 22.

Moran of the West 7th/Fort Road Federation said that among other concerns, her group wanted the station to have regular hours because they'd been unpredictable in the past. Ritland signed a letter in November agreeing the business would be open every day from 6 a.m. to 10 p.m.

He also agreed to work with police "to ensure that the security of the premises is maintained in a safe manner."

Moran and Brock of the Little Bohemia Neighborhood Association both lauded Ritland's efforts to work with their groups.

"He's very professional, very well-mannered, very respectful of our interests," Brock said. "He's very easy to work with."

But Brock said questions remain.

"When we met with them last fall, we expressed our concerns about the ownership group, more along the lines that they went into bankruptcy and how could we be reassured that wouldn't happen again," he said. "The question we had for them is, 'What's different?' and they portrayed it that the new owner would provide the wherewithal to get this done."

Still, he says he's willing to give the new owner the benefit of the doubt.

"I think the neighborhood would rather see a working gas station at that location than an empty gas station," Brock said.

portions of Nett’s memorandum in support of her motion to vacate: