Minneapolis starts to feel the economic cost of the recent riots

Recently, I wrote about research which showed that the economic damage of rioting lingers for a long time. With the recent riots in the Twin Cities, we can see this grim dynamic playing out in real time.

One of the businesses wrecked was Brit’s Pub on Nicollet Mall. Kam Talebi, owner and CEO of Kaskaid Hospitality, the parent company that owns Brit’s Pub on Nicollet Mall, told News Talk 830 WCCO’s Mark Freie that the pub is devastated:

“It’s pretty extensive, unfortunately,” says Talebi. “And you know, they got into the building, lit it on fire. Thank God it didn’t spread throughout the entire complex, but, it’s just completely ransacked. The entire building.  Got upstairs, downstairs, office, computers, TV’s, liquor. I think they might’ve just pulled up here with their cars and unloaded the business. So it’s just, it’s disheartening, sad. This is such an institution to look at the building and this state of disarray is just surreal.”

Talebi heard about the damage happening Wednesday night, but says law enforcement didn’t respond soon enough to protect their property.  They were able to evacuate their staff in order to keep them safe.  

“We heard that the building up broken into, and then we called 911 and reported it,” says Talebi. “And they said, well, we’ll get to it as soon as we can. A couple hours later, about 11:30, is when the building caught on fire.  Call the police, called fire. We’ll get to it. I mean, there’s not much we can do, unfortunately.  Thank God we got the staff out quickly. It was not safe to be able to come inside the city as a whole. I think that the police were really focused more on, you know, 9th through 7th (streets) where Target is, and left this area sort of unattended.”

Following the George Floyd protests and riots, and the issues that have continued to plague Minneapolis, Talibi says the safety of customers is a major concern. 

“We live in certainly interesting times right now and, you know, I hope that the leadership of the city government at the end of the day understands and hopefully addresses, number one the safety of the residents here in Minneapolis. It’s unfortunate, businesses are truly impacted. We’ve got 80 employees right now that are out of a job. Until there’s a plan to be able to secure the city, and rebuild it’s image, we hear from customers that they don’t feel safe coming downtown.”

All of this is on top of the coronavirus pandemic that has already been a hardship to restaurants not just in Minneapolis, but across the country.  

“So business has been, you know, sort of crashing levels to begin with,” Talebi says. “This area wasn’t hit as hard during the previous riots but it certainly took aim at this time. So look, we’re fighters and as a community, hopefully as the governing bodies of the city, we continue to learn from this and address the issues at hand. I hope within that there’s a priority of safety for residents and the businesses. It’s just tough to be able to operate right now in downtown Minneapolis.

“Minneapolis is a great city, downtown is a great downtown. We’re just going through some dark times. But we need to get proactive and start to address the issue or this will happen again. This will happen again, if we don’t secure downtown and put in the resources needed to be able to create a safe environment for everybody. This thing is going to get away from city council. It’s going to get away from the mayor. We’ve got multiple businesses here and Union Restaurant got trashed yesterday, so I have that to look forward to next.”

WCCO reported that even before last Wednesday’s violence, a number of downtown businesses had been re-thinking their future in the city:

One of those businesses is Dahl Medical Supply, located at 12th and Nicollet. They’ve been downtown for about 12 years, but after last night, they don’t plan to stick around another day.

“You feel so hopeless and helpless. I have to get there. I have to defend,” Lisa Steffes said.

That helpless feeling grew throughout Wednesday night, as Steffes watched surveillance video of looters ransacking her store.

“We had several windows broken. And we had a lot of looting,” Steffes said. “They stole things. They stole all of our computers and technology.”

For her and her family, it was the last straw. On Thursday morning, they parked a moving van in front of the store and began loading up the merchandise the thieves didn’t take.

“This was it for us. It really, really was. We are a family-owned business,” Steffes said. “It’s just not worth it anymore being downtown. And we all grew up working downtown.”

Chad Laux has run Greenway Chiropractic at 811 LaSalle for 17 years. He first lost customers to COVID-19, but Laux says downtown crime has made things worse.

“We’ve lost 6 people in this building already,” Laux said.

His first client Thursday cancelled, with a reason he’s heard far too often lately.

“She’s lived downtown for at least 10 years. She called me up and said, ‘Let me know when you move.’ She’s not coming. She lives about six blocks over. She’s not coming downtown anymore,” Laux said.

Laux says he’s been emailing Minneapolis City Council members for months about his concerns, but only Lisa Goodman has returned his emails. He says he had hoped to be downtown for 25 years, but he’s now looking into ways to get out of his lease.

“Haskell’s has been downtown for 85 years and what’s gone on the last six months is just unrecognizable,” Ted Farrell, the president of Haskell’s, told Fox 9. “You can’t understand that this is Minneapolis.”

At Haskell’s liquor store Wednesday night, employees had to hide in the beer cooler as looters smashed the windows. Farrell says closing up the downtown store for good is the likely outcome following the looting.

“You need a lot more enforcement of laws down here,” said Farrell. “You got to quit throwing out laws that seem to be working and start employing laws that do and clean the city up.”

The Star Tribune reported:

Vanessa Rybicka once enjoyed living on the edge of downtown Minneapolis and walking to her office, stores and restaurants. But in recent months she has seen fewer cops, more harassing pedestrians and fights breaking out daily on Nicollet Mall. She now shops in the suburbs.

Others in her Loring Park building are moving out. Rybicka is ready to follow.

“I’m moving my business out to the suburbs,” said Rybicka, who owns a professional services firm. “I can’t deal with it.”

Increased crime, vandalism, and disorder – even just the perception of it – imposes economic costs. If people feel unsafe, they will go elsewhere and they will take their money and jobs with them.

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