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During the unrest following the police killing of George Floyd last year, people broke into and raided Hassan Hamid’s cell phone store multiple times.
Today, Power Wireless, a small storefront tucked into a strip mall on the 1700 block of Lake Street in Minneapolis, is rebuilt and open again for business. But it’s been a tough year and a half for Hassan, 35, who has owned the business for the past eight years, and things don’t seem to be getting better.
In June, a flurry of gunfire outside his shop killed a man at the gas station across the street. Hassan also has been struck physically, robbed, and had a customer get carjacked outside his store during the past year.
The rise in crime isn’t Hassan’s only obstacle. Though he secured a $6,000 federal loan at the beginning of the pandemic and an $18,000 grant through Lake Street Council to repair his property damage, Hassan still went $40,000 in credit card debt to physically rebuild his store.
To make matters worse, his insurance company dropped him before the pandemic, telling him that cell phone stores like his are too risky to take on. He’s been unable to find a company willing to provide coverage.
Despite the problems, Hassan keeps going. “If I give up, it’s going to be worse, because I have a family and kids,” he said. “It would be very tough for me to go back and start a new business. So, I have to make sure and do the best I can, and push and go forward.”
Hassan’s many struggles sound familiar to Allison Sharkey. “On an everyday basis, our staff is out there hearing the pain of what people are experiencing,” said Sharkey, who is executive director of Lake Street Council, which advocates for the estimated 2,500 businesses along the 2.5-mile stretch of Lake Street in south Minneapolis.
Business owners in one of the city’s most diverse corridors are still feeling the hurt from the property destruction and a year and a half of pandemic, and are looking for help. About three-quarters of these businesses are owned by people of color. Most are East African, Latino, and Asian immigrants. While federal, state, and local governments, as well as foundations and private donors have stepped in to help, they haven’t provided nearly enough assistance to make up for the $500 million worth of property damage the Twin Cities experienced during the long nights in the early summer of 2020, or the massive drop in sales caused by the COVID-19 pandemic.
Public and private help hasn’t been enough
After the civil unrest, Lake Street Council quickly raised $6 million to help with rebuilding damaged property. Since then, the council has raised a total of $12 million, more than $8 million of which has gone to 400 businesses. Sharkey said her organization is still distributing the remaining money.
Last year, the city of Minneapolis got $32 million from the federal Coronavirus Relief Fund, which it distributed to businesses hurt by the pandemic. And this year, the city got $271 million from the federal American Rescue Plan Act. The city has so far spent $102 million from the first round of ARP money. Roughly $37 million of this went to economic rebuilding, most of which translated to a one-time waiver of business licensing fees.
“That’s fine, but it’s not revolutionary,” Sharkey said.
The city is now determining how to spend the final $169 million. As part of his 2022 budget plan, Mayor Jacob Frey has proposed to use $119 million of the funds to replace lost city revenue for 2022 through 2024.
Finally, the state Legislature earlier this year approved $150 million in “Main Street” grants for businesses hurt by the pandemic. That bill started out solely to help Twin Cities businesses physically damaged by unrest, but grew into a compromise aimed at businesses across the state. Sharkey said half this money will likely go to businesses in the Twin Cities metro.
Former President Donald Trump administration’s denial of a federal emergency request last year in wake of the unrest also didn’t help, Sharkey said.
‘I keep thinking I’m going to hang on’
At the moment, one of the biggest concerns staff at the Lake Street Council hears from business owners is bringing customers back to their shops. For Hassan, business is down 70 percent from pre-pandemic times. That’s largely why he’s currently three months behind on rent.
Ngan Hoang is also three months behind on rent for her business. She owns and runs Cali Nails, a salon that her mother started 27 years ago after the family moved to the U.S. as refugees from Vietnam. Hoang has worked for and helped out with the business ever since it started.
The neighborhood Cali Nails is located in, between Pillsbury and Blaisdell avenues, has become increasingly East African over the years, Hoang said. Most of her customers are Somali women.
Many of these customers still haven’t come back since the pandemic hit. Before then, Hoang’s business pulled in between $125,000 and $150,000 per year. Since then, yearly revenue dropped to between $25,000 and $30,000.
Hoang experienced bad luck during 2019 when her shop got flooded. The damage significantly impacted her revenue that year. Then when March of 2020 came around, she was forced to close her doors during statewide COVID-19 shutdowns. These coincided with both Eid holidays, which are some of the best periods of sales for Cali Nails.
Hoang’s federal Paycheck Protection Program loans were also small because they were based on her 2019 sales. In all, she received around $33,000 of support from government loans, Lake Street Council, and other sources. It didn’t make up for the $70,000 in property damage that her shop experienced during the summer of 2020.
Hoang said she gets anxious whenever she thinks about how much needs to happen to get back to solid grounding for her business.
“Something’s got to give,” she said. “I keep thinking I’m going to hang on, because Lake Street Council has done so much for me to keep my business going. And I know for a fact, I’m not in it for the money, I’m just here because this is my mom’s legacy.”
One thing keeping customers away from Hoang’s business is the physical condition of Lake Street. Before, she drew customers who happened to be in the area shopping and running errands. But now, with buildings like the Walgreens and bank that once stood near her shop gone, people don’t have as much of a reason to drop by.
Hoang knows that efforts to rebuild the area are under way. The Karmel Mall across the street, for example, is currently building a giant addition. But it’s going slowly.
“They need to make it look appealing again, and just not like a whole bunch of missing buildings,” Hoang said.
Sharkey said much of this is a perception issue. The city could help fix it by cleaning up litter in the streets and helping businesses take boards off their windows, she said.
As for crime and safety, the biggest concern Sharkey said she hears is the slow response time from police officers after 911 calls. For her part, Hoang said she hasn’t experienced crime firsthand, but she’s seen an increase since last summer. She said she still sees police cars patrolling the area, though.
That’s not the case for Barlin Kadiye, who has owned Baarla’s Boutique on Lake Street for the past six years. Barlin’s business is located on the same block as Hassan’s, and she witnessed the same shooting that led to the death at the gas station this past summer.
Barlin has shortened her shop hours because of her worries about crime, closing now between 6 p.m. and 6:30 p.m. rather than 9 p.m. or 9:30 p.m. Every evening after she closes, her husband escorts her to her car. Both Barlin and Hassan said they want to see police officers patrolling the area.
“We’re scared on Lake Street because we don’t have police,” Barlin said.
Securing insurance is a challenge
In some cases, organizations are buying damaged buildings with plans to redevelop them, a point of encouragement for Sharkey. Such is the case for the Colosseum building on Lake Street, which Seward Redesign and a group of investors bought last year for $2 million and are in the early stages of rebuilding and opening. The goal is to make the 85,000 square foot building a showcase for local businesses owned by people of color, just as it was before the civil unrest.
But even in these scenarios, new entrepreneurs are running into similar problems to those that existing business owners are experiencing.
One case in point is finding insurance. In purchasing both Coliseum and a nearby building, Redesign went through rejections from 23 insurance carriers before finding one willing to take them on.
Redesign Project Manager Taylor Smrikárova said the most common reason for rejections from insurance companies revolved around the damage to Colosseum and its surrounding buildings. The building experienced multiple fires on both floors during the summer of 2020, but didn’t completely burn down. Redesign sent a group of people to clean up the building and show that it is still structurally intact.
“It’s messy and it’s a damaged building, so we are still cleaning up the inside,” Smrikárova said.
In the end, Redesign could only secure liability insurance, which covers the owners if something happens to people inside the building rather than damage to the building itself. Now, Redesign is working to raise money for reconstruction with the goal of starting late next spring and a target reopening date the following spring, in 2023.
Clarification and correction: This story has been updated with more complete numbers on Lake Street Council’s financial support for local businesses. Also, the council’s executive director provided revised numbers on financial support for Twin Cities businesses from the state Legislature.