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Politics and Government News
Brian Bakst
St. Paul

Owners of burned, looted businesses plead for state help

A building is a pile of rubble.
The building that housed the clothing store, Sports Dome, is a pile of rubble Aug. 12. Sports Dome is one of the businesses in the Midway area that was heavily damaged during the unrest following the police killing of George Floyd in late May.
Christine T. Nguyen | MPR News 2020

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Owners of businesses ransacked during last year’s Twin Cities riots made personal appeals Tuesday to Minnesota lawmakers for help with rebuilding.

The House Capital Investment Committee heard from several store owners from Minneapolis and St. Paul who could benefit from a proposed $300 million borrowing package. The plan advanced to another panel on an 11-8 party-line vote.

The bill would designate $200 million from the bond sale proceeds to Minneapolis redevelopment efforts and $100 million to St. Paul.

“This fund can definitely be a lifeline for our small businesses, particularly those that are owned by our Black and brown community members to make sure that they thrive,” said Rep. Esther Agbaje, DFL-Minneapolis. 

Rob Yang owns Phenom, a footwear and apparel business with locations in both cities that saw $500,000 in damage and looted merchandise.

“I was no more than 15 feet away from the entrance where I would normally greet customers while complete strangers took their turns looting my American dream and 15 years of hard work,” Yang told lawmakers.

In the immediate aftermath, Yang said his pride would not let him take a handout even though he needed assistance and insurance didn’t cover the extent of his damage. He said the same goes for fellow business owners in the Midway area, whom Yang said need “help to rise from the ashes and destruction.”

Abe Demaaj, an Ethopian immigrant whose furniture store in south Minneapolis was targeted during the unrest, said he was begging lawmakers to come to the table to assist businesses like his.

“It was very emotional, and I still feel like the city is burning down,” he said. “Let’s rebuild this town. I don’t want to see boarded businesses any longer. We are open and vulnerable to looters. That’s what this civil unrest created because the peaceful protests got hijacked. We all know that.”

Gov. Tim Walz has also proposed a publicly managed redevelopment fund, although his measure is half the size of the House DFL plan. 

But legislative Republicans say they’re leery of the amount of borrowing and routing the money through cities whose leadership they don’t trust.

“Minneapolis and St. Paul need to address their public safety situation. Business owners need to have the assurance that this type of destruction will not happen again,” said Rep. Jordan Rasmussen, R-Fergus Falls.

On Monday, Senate Majority Leader Paul Gazelka said he is opposed to proposals that would have the cities manage the money.

“We have got to find a way for these small businesses that were destroyed that are asking for help,” Gazelka, R-East Gull Lake, said. “I’m willing to find a way but it will not be through dollars through the city of Minneapolis that’s dysfunctional.”

The type of bonds that would be used come with higher interest rates than public works projects. They would require as much as $135 million in interest payments over their lifespan, according to an estimate from House fiscal staff.

But city representatives said the rebuilding is beyond their capacity to undertake on their own.

Erik Hansen, an economic development official for Minneapolis, said the damage across his city was estimated at more than $350 million and touched 22 million square feet of commercial property.

During the worst of periods of unrest, St. Paul Fire Chief Barton Inks said his department responded to 250 calls, almost 50 of which were confirmed structure fires.

“To put that in perspective for everyone, that’s about six months worth of work in a 12-hour period,” Inks said. 

The House bill requires at least two more committee stops before a possible floor vote.