DFL proposes $300M for riot-damaged businesses in Minneapolis, St. Paul

Ibrahim Demmaj listened as Democratic legislators and city leaders stood by the rubble of his Minneapolis furniture store on Monday to debut a roughly $300 million plan to help rebuild communities damaged by arson, vandalism and looting.

"We need your help; we need your support. We don't want to be relocated," Demmaj said of his business near the corner of Chicago Avenue and Lake Street, an area hit hard by the unrest that followed George Floyd's death in Minneapolis police custody.

Minnesota House Speaker Melissa Hortman noted that the steel beams in his building "melted like noodles."

Demmaj's was one of more than 1,500 buildings damaged or destroyed in Minnesota during the protests and riots that shook the nation in the week after Floyd's death. The charred remains of his business served as the backdrop Monday for Democratic lawmakers and St. Paul and Minneapolis officials as they gathered to announce the "Promise Act," legislation they hope will pass during this week's special session at the State Capitol.

But prospects for a quick infusion of state aid remain uncertain during a legislative session that could adjourn as early as Friday.

Republican House Minority Leader Kurt Daudt, R-Crown, said last week that leaders must learn more about communities' needs and financial options for how the state can help, adding, "This might take some creative tools." A House Republican spokesman said Monday that he had no comment on the DFL plan.

The Promise Act would include $125 million in cash from the state's general fund for immediate grants and loans to business owners, said House Majority Leader Ryan Winkler, DFL-Golden Valley. If the Legislature approves it in the next couple of weeks, he said, affected businesses could start seeing the money in two to three weeks.

The plan, originating in the DFL-controlled House, also would set up a $125 million special compensation fund that could take three to six months to start operating, Winkler said. It would be patterned after funds created following the I-35W bridge collapse and Sept. 11 terrorist attacks. The money would also come from the state's general fund.

A slightly different rebuilding plan has emerged in the GOP-led Senate.

Sen. Eric Pratt, R-Prior Lake, has introduced a bipartisan bill that would use $200 million in federal CARES Act money to reimburse the state for COVID-19 recovery expenses. Pratt's bill would then allow that general fund money to be used to help the riot-damaged areas.

Winkler also mentioned using CARES Act dollars to free up general fund money for aid. He said the federal assistance, along with reserves and other resources, would cover the DFL's $300 million rebuilding effort even as the state faces a projected $2.4 billion budget deficit.

Pratt suggested Minnesota follow the model of how the state spends money to respond to natural disasters, which allows the money to be sent immediately. "We should try to get something moving right away. ... We can't have a healthy Minnesota economy without a healthy Minneapolis and St. Paul," he said.

Business owners and city leaders are still trying to assess the extent of the damage, determine how much insurance policies will cover, and gauge the size of philanthropic donations, Pratt said.

"In the meantime, we just need to figure out a way to get some funding to these folks right away, not funding to set up a whole bureaucracy to see how it will work later," Pratt said, taking aim at a piece of the DFL proposal that would create a special panel to review cases of damage and direct the compensation.

A third, longer-term piece of the Democratic plan would seek to help build local businesses and microbusinesses in damaged areas while preventing gentrification and properties being sold off, Winkler said. It would use a new eighth-of-a-cent metro sales tax to support the work of a Metropolitan Area Redevelopment Corp. to come up with a long-term redevelopment plan. The DFL package also included property and sales tax breaks for some sites.

The hardest hit areas of the Twin Cities — the Lake Street corridor in south Minneapolis, W. Broadway in north Minneapolis and University Avenue in St. Paul — house many immigrant- and black-owned businesses that have historically struggled for access financial capital.

Demmaj said his business on Lake Street was underinsured and many others in the community are in the same position. He said business owners were already struggling from income lost during the pandemic; riot damage was additional devastation.

Before the special session began, legislators on both sides of the aisle and Gov. Tim Walz toured communities to survey the damage. One of Walz's stops during his community tours was Elsa's House of Sleep in St. Paul, where windows were damaged. Nneka Constantino, whose husband owns the store, said people showed up to clean the neighborhood after the unrest.

"The community is really stepping up," Constantino said. "And I expect legislators to — in a nonpartisan way — to follow suit aggressively."

Staff writer Briana Bierschbach contributed to this report.

Jessie Van Berkel • 651-925-5044