Businesses at George Floyd Square sue Minneapolis, Mayor Frey for $30 million, demand condemnation

Citing years of deterioration and crime since George Floyd’s murder, several business owners at the intersection of 38th Street and Chicago Avenue in Minneapolis demand in a new lawsuit that the city and Mayor Jacob Frey begin eminent domain proceedings to take over their properties.

Last week, the owners of Cup Foods filed a civil lawsuit in Hennepin County District Court seeking $30 million in damages, arguing city actions ruined the businesses and constitute an unlawful taking of their property without just compensation.

The lawsuit argues that business in the area lost revenue, real estate value, reputation and tenant and rental income for both business properties and apartments due to how the city handled the unrest after Floyd was murdered by Minneapolis police. That includes the use of concrete barricades to isolate the area that became known as George Floyd Square. It points to a rampant escalation of violence in the neighborhood because of these decisions and alleges the city created a “No Go Zone” for police near the businesses.

The legal action, known as a writ of mandamus, comes two months after Hennepin County Judge Edward T. Wahl dismissed a civil lawsuit filed by the business owners in 2023 that sought $1.5 million in damages from the city and Frey. Wahl dismissed with prejudice claims of negligence and nuisance against the city and claims the city charter had been violated, meaning they cannot be refiled.

But the claim that the city had effectively taken over the property “without formally invoking its eminent domain power” was dismissed without prejudice, meaning that it could be subject to further inquiry.

Wahl said if the businesses near 38th Street and Chicago Avenue wanted to make that claim, they first needed to file the writ of mandamus, a term for ordering the government to properly fulfill their official duties or correct an abuse of discretion.

The new filing essentially asks the city to begin eminent domain proceedings, said Michael Healey, the lawyer representing Cup Foods Inc.; Menthol Tobacco LLC; Southside Electronics, Inc.; NMA Investments, LLC; and 3759 Chicago Ave, LLC.

Healey said seven additional businesses will soon file similar suits against Minneapolis and Frey.

“There are two possible outcomes, one is the city will allow my clients — a couple had to sell or leave town — but the folks that still own businesses there could conceivably keep the property if a settlement is reached with the city on the diminished value,” Healey said. “The other possible outcome is the city grants the writ and initiates an official taking of these properties in which case they will definitely have to be paid something. That would have to be litigated.”

The possibility that the city could grant the writ is what led Healey to ask for $30 million.

“I had to tell my clients that if they grant this, you will get a notice of condemnation and the properties will go over to the government,” Healey said. “We’ve put a big price tag and what is just compensation could be litigated.

“They’re just looking to be compensated in some way for the diminished value.”

In a statement, a spokesperson for the city of Minneapolis said that while it can’t comment on pending litigation, the city “understands the challenges that residents and businesses have confronted in the wake of George Floyd’s murder.“

What exactly should be done at George Floyd Square has been debated at the highest levels of city government in the 4½ years since Floyd was murdered by former Minneapolis police officer Derek Chauvin outside Cup Foods, which is now known as Unity Foods.

After two years of community workshops and a nine-month engagement process this year, the city recently released a “vision report” on how it proposes to reconstruct the area in and around 38th Street and Chicago Avenue and transform it with rebuilt streets, new green spaces, a raised traffic circle in the intersection, pedestrian street lighting, wider sidewalks, upgraded pedestrian ramps and narrower travel lanes big enough to accommodate bus rapid transit service.

If that plan is approved, construction could begin next year. But some members of the Minneapolis City Council have voiced reservations about the project noting that residents and people with strong attachment to the site aren’t close to a unified vision for the memorial area.

Healey said his clients have been left to watch their businesses erode while the city plots what to do next.

“Some people are of the opinion that if a great monument is built there, the value of these properties might go up,” he said. “But what has happened there since George Floyd was killed in 2020 is it’s still dangerous.”

Staff writers Deena Winter and Elliot Hughes contributed to this report.