Deal finally struck for businesses damaged by riot, but is it enough?

One year after rioting engulfed the Twin Cities, Minnesota legislators say they've finally struck a deal to provide some relief to business owners whose properties were damaged or destroyed in the chaos.

An agreement on the state budget for jobs and economic development will include $80 million for a new "Mainstreet revitalization program," where businesses can apply for $2 million in loans and up to $750,000 in grants for building or rebuilding projects in areas of need.

The package also includes another $70 million for businesses rebounding from the COVID-19 pandemic. Businesses that were missed in two previous rounds of state aid can submit their names in a lottery for grants ranging between $10,000 and $25,000.

"We've gotten businesses up and running and generating some cash flow, but some are still really hurting," said Sen. Eric Pratt, the chief Republican negotiator on the state's jobs and economy budget bill. "This will really help boost them up and hire people."

The deal struck between the divided Legislature during the special session comes after House Democrats and DFL Gov. Tim Walz pushed all year for the full $150 million package to flow directly to businesses in Minneapolis and St. Paul that were destroyed or damaged in the unrest that followed George Floyd's killing in May 2020. More than 1,500 businesses and properties sustained damage.

Rep. Mohamud Noor, DFL-Minneapolis, said the need in the area exceeds $150 million for these businesses, but he had to compromise with the GOP-led Senate to get any aid out the door.

"We have to compromise and work with what we have, and what we have is something that can help," he said. "It's a place to get started. We're not going to give up. We're going to be coming back for that full amount."

For businesses to unlock up to $750,000 in grant money through the revitalization program, they must leverage $2 in fundraising or insurance money for every $1 they get from the state.

Businesses across the state can apply, not just in the Twin Cities.

Henry Jiménez, executive director of the Latino Economic Development Center, said asking businesses to raise funds is "ridiculous" after they waited more than a year for any state help.

"They need $100 and you're asking them to go get the first $66 bucks?" he said. "They had a year to interact with business owners and ask them exactly what they needed. No one would have told them to give me another loan and another hurdle for me to go through by making me get a match."

Ade Alabi saw his building on E. Lake Street in Minneapolis, which housed several businesses, destroyed in the riots. He's in the red from having to cover the costs of demolition.

Developers tell him it will cost $8 million to $9 million to rebuild, more than three times what he paid for the building.

Even if he taps into the maximum amount of state aid under the deal, it still won't be enough.

"It's good that they are offering something," he said. "But I don't think they know that it's going to cost a lot more than what they are offering."