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Downtown Minneapolis loses another business

Last summer, Haskell’s Wine Bar on Nicollet Mall closed. Last week, City Works, a sports bar and restaurant on Hennepin Avenue, closed. And now, downtown Minneapolis has lost another business, with Ike’s Food & Cocktails on 6th Street closing after 18 years to relocate to Bloomington.

Minimum wages are part of the problem

The Star Tribune quotes Ike’s proprietor Gene Winstead:

“We’ve been there 18 years. We’ve been part of the Minneapolis scene. But we were a small restaurant with a high overhead,” he said. “It’s tough.”

According to Winstead, the negotiations were meant to “address restaurant and market conditions” impacting Ike’s bottom line, including “labor costs, operational costs, maintenance costs and taxes.”

“There are so many issues, not any one of them a restaurant killer on its own, but taken altogether it adds up,” Winstead said. 

This echoes something I wrote recently. Restaurant owners face a host of pressures and all on thin margins. While something like a business property tax or minimum wage hike, like Minneapolis has enacted, might not seem too steep on its own, it has to be seen in that context. It could well be the straw that breaks the camel’s back.

Crime is another part of the problem

According to the Star Tribune, Winstead “also cited a perception of downtown Minneapolis as unsafe for evening diners. ‘There is a little truth to it, but it’s mostly perception,’ he said.”

Indeed, the data show that this isn’t all perception, violent crime really is up in downtown Minneapolis. Fox 9 reported this week that

In Minneapolis, homicides rose in 2019 to 48, up from 33 the previous year, according to the Minneapolis Police Department’s online data

But overall violent crime presents a more complicated picture. 

In Minneapolis, there were 4,319 violent crimes in 2019. That’s a 12 percent increase from 2018, but 2019’s figure was lower than three out of the four previous years. 

When Minnesota Senate Republicans said this week that increased crime has made outstate Minnesotans fearful of coming to the Twin Cities – which Gene Winstead suggests is true – House Speaker Melissa Hortman responded by saying

“It’s unfortunate that the playbook from Donald Trump and the Washington, D.C. Republicans is demonize and divide…I’m really disappointed to see Minnesota Republicans going down that same path.”

It isn’t clear how an attitude so detached from reality is going to halt the hollowing out of downtown Minneapolis.

John Phelan is an economist at the Center of the American Experiment.

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