By Jake Rossen
By Jesse Marx
By Michelle LeBow
By Alleen Brown
By Maggie LaMaack
By CP Staff
By Jesse Marx
But just as company owners were set to apply for a permit last October, they learned of the proposed moratorium. (Although the council didn't actually approve the moratorium until December, it took effect when it was first introduced by Biernat in September 1998.) Terminal manager Ken Farrar says that Holnam decided it would be prudent to let the moratorium run its course rather than challenge it by applying for a waiver. The company had already spent 16 months doing the engineering work and analyzing financial projections for the silo, and didn't want to risk raising the council's ire.
Holnam says the decision to delay its waiver application has come at a high cost: "Our analysts figure that the moratorium is costing us $250,000 to $300,000 per month," says Farrar--eight months annually, during the shipping season. "About $2 million, that's what it's cost us so far," he says; that's revenue the company would have realized had it been allowed to erect a new silo. And now the moratorium has been extended, and rezoning is in the works. "I've got a lot of pent-up aggravation with dealing with this," Farrar adds. At the BRW presentation to the Planning Commission, a staffer suggested that the Holnam site would make a nice park.
Farrar says his company has been asked to move locations for redevelopment projects in Salt Lake City, St. Louis, and Detroit, but there's one key difference about the situation in Minneapolis. "In all those instances, we've been treated a lot more fairly than we have by these folks. All we ask is that they treat us with some respect," says Farrar, who voices the concern of fellow business operators by adding that little if any effort has been made by the city to work out a compromise plan that might allow some industry to remain on the river. "We're willing to work with them, but we're not willing to be zoned out of existence."
Over on the east side of the river at Marshall Concrete, which employs 85 people and has been doing business in the same spot for 45 years, general manager John Fischer says that the moratorium--and the specter of rezoning--is putting the crunch on business. After decades of use, some of the walls near the kilns are beginning to deteriorate. But the company doesn't want to just fix the problem, believing that it is financially preferable to undertake more extensive maintenance, which would involve bolstering the walls and reconfiguring the kilns. Problem is, that would require a permit. "That's not something we can do with a moratorium on. We're just having to live with this problem right now," Fischer says. "As a person who's trying to run a business and provide jobs, it doesn't feel real good."
Down the river at CAMUS Minnesota, a sand and aggregate firm, the talk of overhauling the river has a strangely familiar ring. Until the late 1980s, the company was located below the falls, south of the Stone Arch Bridge. But then the city wanted to redevelop the lower river, supplanting industry with parkways, so CAMUS (Shiely Sand and Gravel at the time) and another company, Cemstone, were relocated to the upper corridor.
"The City of Minneapolis condemned us out of that site," explains Jonathan Wilmshurst, president of CAMUS Minnesota, "and relocated us at considerable taxpayer expense." The logic at the time, he recalls, was that moving the companies might help to invigorate the commercial viability of the upper river. So much for long-term planning. Total acquisition and relocation costs to the park board topped $7.5 million.
The city's moratorium and pending overhaul of the zoning code, Wilmshurst figures, are nothing more than strong-arm tactics to effectively control the real estate market on the upper river: "I'm frankly at a loss to try to figure out what they're trying to do except gradually tighten the noose until all the businesses leave. Essentially, it's a quiet taking."
Eminent-domain lawyer Leland J. Frankman, who has been in the business for 33 years, agrees. "It's what the lawyers call a 'cloud of condemnation,'" he explains. "When there's a moratorium, it freezes any purchasers from buying the property--why would they want to buy into a moratorium? It prevents the owners from improving the property. So at the time that it's taken by the government, when it's eventually acquired, the property is in kind of a depressed state."
All that's left to argue about then is how much the property is worth. In light of recent court decisions in eminent-domain cases, Frankman doesn't offer much optimism to the corridor's business owners hoping to fight city hall.
"The bottom line," Frankman concludes, "is that...I'm convinced that in Minnesota the chances of overturning a determination by the government that what they're doing is for a public purpose are slim to none." In other words, when it comes to private property that Minneapolis shakers and movers want, the outcome is almost written in stone: thanks, and good-bye.
As for Jeff Schoen, Biernat has little comfort to offer. "Jeff is a great guy who has worked 20 hours a day for a number of years at his business," the council member says. "Unfortunately and ironically, at this point in time he's caught up in a great deal of riverfront momentum."