About 330 St. Paul businesses sustained $73 million in property damage and $8.8 million in lost inventory and other assets during the civil unrest following the murder of George Floyd. St. Paul City Council members, meeting as the Housing and Redevelopment Authority (HRA) Board, heard the grim news Aug. 12.
Minneapolis is still tallying its losses, but estimate places the number of damaged or destroyed businesses at more than 700.
Floyd’s death at the hands of Minneapolis Police sparked nights of property damage, vandalism and theft. Some businesses were burned to the ground, while others were looted or sustained other property damage.
St. Paul Economic Development Director Martin Schieckel outlined the losses to businesses, which had already been hit hard by the COVID-19 pandemic. St. Paul Department of Planning and Economic Development and Department of Safety and Inspections staff began immediate outreach to affected businesses. Businesses have been helped in finding financial and technical resources and getting permits for repairs or demolition.
Thirty-seven businesses were totally destroyed, according to Schieckel. About half of those are national chain businesses and aren’t seeking city help.
Most of the losses were sustained along University Ave., although businesses in many other neighborhoods were also hit hard.
Midway Center had businesses looted and set ablaze. It will be demolished.
Ward Four Council Member Mitra Jalali, whose ward was among those hit hardest by damages, said the city “desperately” needs help from other levels of government.
But state and federal assistance hasn’t been forthcoming. President Donald Trump in July rejected a disaster declaration request for Gov. Tim Walz. Walz has said he’ll try again.
During a June special legislative session state lawmakers failed to pass a measure offering $300 million in assistance. The PROMISE Act passed the House, but stalled in the Senate.
How estimates were made
Schieckel gave the HRA Board an outline as to how damages were calculated. The damage estimates are based on a formula estimating the repair costs necessary to bring a property back up to the previous standard, repairing and replacing damaged portions as needed. For each business the percentage of the business real estate that was damaged by the civil unrest was scrutinized. In cases of fires, the St. Paul Fire Department made the estimate as part of its standardized operating procedure.
In cases where the percentage damage to real estate was substantive or generally over about 10 percent, city staff classified the buildings as either “major” damage, or “destroyed.” This included 37 properties and businesses. Three data points were used to come up with a repair estimate. City staff looked at total above-ground square footage of the establishment as recorded in the Ramsey County Assessor’s office data, and Fire Department reports on building damage. City staff also interviewed area construction firms to figure out an appropriate per-square-footage estimate for rebuilding in the current market, which was $425 per square foot.
When estimating damages, city staff also used other factors. In cases where the damage to real estate was minimal, a blanket rule of $10,000 was assigned as impact for businesses affected. This was used as an amount to cover time and materials for boarding up the windows, repairing the windows and window frames after boarding, cleaning up graffiti, repairing other low-level vandalism, and other additional costs incurred as a part of the unrest.
“Some businesses in this category surely exceeded the $10,000 threshold for real estate damage, while others were below it, but as a baseline, it seemed about right,” a city staff report stated.
Resources for help
Council members are concerned about resources only going so far. Earlier this year the city worked with community and foundation partners to set up the $3.3 million St. Paul Bridge Fund. That provided assistance for families and small businesses that were struggling as a result of the pandemic.
St. Paul already is facing cuts to its budgets, with decreased revenues due to the pandemic. Schieckel said the city is helping businesses find other resources.
Ramsey County is offering small business grants of up to $10,000, through a program that closed Aug. 21. The We Love St. Paul/We Love Midway grant program and Midway United are also offering support. The federal Small Business Administration is offering loans.
Other private, state and federal program were available, but have closed applications.
The city is also offering technical assistance in the form of legal services, business mentorship, and assistance with design and planning, volunteers, relocation and insurance assistance.
“We at the city of St. Paul, we might not have all the resources, we might not have the perfect resources, but we are here to help,” said Ward Three Council Member and HRA Board Chair Chris Tolbert.