Commercial building vacancies likely to skyrocket in Minneapolis

From the clutter littering the floor of a small Minneapolis grocery store, it seems like just yesterday that it shut its doors for good. Newspapers sit in racks by the door, the fridge is stocked with drinks and a pile of register receipts covers the front counter.

But a closer look at the date on those receipts reveals the truth. It's been two years since the owners packed up and left. Now, the store faces demolition. To neighbor George Roberts, it's been an eternity.

"It's made a world of difference to have this building close," he said.

Roberts and his North Minneapolis neighbors plan to celebrate when the store is demolished. He said it's been nothing but trouble for as long as he can remember, and he's lived in the neighborhood for decades.

"Starting with poor maintenance and going to absentee landlord ownership, problems with the kind of tenants that came here, problems with the sort of business that was going on here, problems with drug dealing, prostitution, littering, gangs hanging out," Roberts said. "It was one thing after another and sort of downward spiraled for the last ten or twelve years."

Roberts owns an art business down the block. He grimaces as he recalls how gunshots down the sidewalk in the middle of the day chased customers away.

But even vacant, the boarded red and white corner store is still a problem. Over the years, the owners made shoddy repairs to the building. Tom Deegan, of the city's Problem Properties Unit, said it's not just an eyesore, it's in danger of collapse. That's why it needs to be torn down.

Deegan said the building's demolition will be made possible by the city's new Commercial Vacant Building Registration program.

"Folks like George here have had to put up with all the activity and then the activity is gone, which is great, but now the building just sits here," Deegan said. "If you're new to our city, you're driving down the street and he's got a viable business he's trying to run, what's the perception?"

Vacant, boarded buildings are estimated to reduce the property value of surrounding buildings by at least 15 percent. Deegan said the new program is the city's message to negligent owners that they must clean up their act.

"Time is ticking. You cannot let these properties sit here like this."

As an incentive, the program will charge more than $6,000 a year for each vacant and condemned commercial building unless the owner or prospective buyer agrees to bring it back up to code. Depending on the condition, it might make more financial sense to demolish it. But that's expensive, too. The city plans to use more than a million dollars in federal stimulus money to help defray some of the cost.

"Time is ticking," said Deegan. "You cannot let these properties sit here like this, so come in, see us, let's work together and try and get this property back online."

The city offers owners a chance to negotiate and appeal throughout the process.

Officials say the ultimate goal of the new program is to clean up problem properties and stabilize communities already suffering from foreclosure and boarded buildings.

It's unclear how many vacant and condemned commercial buildings there are in the city, but the numbers show there could be more of them soon. Commercial property tax delinquencies are up more than 70 percent over the last two years.

Ken Rowe, who crunches numbers for the Hennepin County Taxpayer Services Department, said delinquent taxes are a red flag for bigger problems to come.

"Any property owner who is having trouble paying their wages, paying their salaries to their workers, they are going to have troubles in all areas and one of the indicators that our commercial property is under stress is the number of commercial properties that are unable to pay their delinquent taxes," he said.

Rowe said until an economic recovery takes hold, commercial property owners will likely continue to feel pain and the city could lose more buildings to forfeiture. City officials say they are trying to prepare for more vacancies by streamlining the inspections program. In the past, multiple agencies handled inspections, which often allowed problem buildings to fall through the cracks.

George Roberts, who lives and works near the vacant North Minneapolis grocery store, is hopeful the new system will help. He and his neighbors are planning a big party to support it.

"Many people who have lived here for as long as I have and closer to the building than I do have suffered, but they have stayed," he said. "Those people deserve to have some recognition for their efforts in creating a thriving and livable community."

The demolition is expected as early as this summer.

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