Sabri's Second Act

After 19 months in federal prison, controversial developer Basim Sabri is once again raising a ruckus

Jonathan Bates is having a rough first day on the job. The newly hired public relations man for Sabri Properties faces a hostile crowd of 50-plus residents in the basement of the Minneapolis First Seventh Day Adventist Church on a weeknight in August.

His task is to defend a 102-unit, five-story apartment complex that's planned for the former Midwest Machinery building in the Whittier neighborhood. With shirtsleeves rolled up and Power Point slides at the ready, Bates gamely tries to keep the crowd focused on the company's track record of investing in poor neighborhoods. "We're hoping to see crime deterred and property values going up," he says.

But when the floor is opened to questions, it's clear that Bates might as well try to sell pulled-pork sandwiches at a PETA convention. The residents raise concerns about traffic, parking, building materials, density, environmental contamination, and the company's history of flouting city rules and regulations. "This kind of behavior from a contractor is disturbing," says Barb Lickness, a longtime activist in the Whittier neighborhood.

To no one's surprise, the residents ultimately vote 39-1 against the proposed site plan—but their decision is merely advisory. Despite this overwhelming rejection, Bates tries to put a positive spin on the evening. "I just want to thank you guys for giving me a very challenging job," he says at the close of the meeting.

The challenge apparently proved too formidable: As of last week, Bates was no longer employed by the company.

If any man could alienate his own PR guy, it's Basim Sabri. The south Minneapolis real estate tycoon has largely kept quiet since being released from federal prison in February, but the housing project slated for the Midwest Machinery building has once again put him in the crosshairs of angry residents.

Sabri has long been a polarizing figure. The Palestinian immigrant originally came here at age 20 to attend the University of Minnesota, but never earned a degree. His first job was working as a bellhop at the old Curtis Hotel. Starting with the purchase of a single apartment building for $15,000 down in 1983, he has built a small business empire over the years, primarily catering to immigrants. He took on Lake Street properties that were plagued by open-air drug markets and prostitution, transforming them into bustling marketplaces with an international flair.

"My philosophy has always been to accommodate immigrants," says Sabri. "I'm an immigrant myself."

The capstone was Karmel Square, named after Sabri's daughter. The 100,000-square-foot Somali mall opened two years ago in the Whittier neighborhood. It houses more than 100 shops—from money wire services to jewelry stores—along with a mosque.

Martin Mohammed, president of the African Chamber of Commerce, which is housed at Karmel Square, says it's one of the few facilities offering business opportunities for the city's burgeoning Somali community. "Immigrants need a starting point," say Mohammed. "That's really very, very important."

But Sabri's rise from bellhop to property magnate has also been marked by turmoil, divisiveness, and a general disregard for laws and regulations. For years he did battle with the Central Neighborhood Improvement Association, packing meetings with his supporters and employees in order to earn approval for his various projects. Sabri eventually succeeded in ousting the executive director and installing one of his workers as president of the group's board of directors.

Sabri Properties has also been repeatedly cited for violating city codes and ordinances. Last month, for instance, the company was ordered by the city's regulatory services department to halt renovations of a building on the 3000 block of Pleasant Avenue. An inspector determined that work was being done without the proper permits and by unlicensed contractors. It was the company's third warning on this particular property.

"He just kind of goes forward with his plans regardless of what the approvals might be," says Sixth Ward City Council member Robert Lilligren, who represents the Whittier neighborhood. "I would characterize it as preferring to seek forgiveness rather than approval."

Sabri insists that such citations are an inevitable part of doing business. "If you are going to be a statue in the mall, you're going to expect some pigeon shit," he says. "This is pigeon shit."

Sabri has also had a series of run-ins with police over the years, most stemming from a long-running dispute with his brother, Mohammed Sabri. In a 1995 lawsuit, Mohammed alleged that Basim and two other brothers tracked him into a convenience store and attacked him with a baseball bat. Then in 1996, Sabri was spotted crashing a moving truck into Mohammed's garage while spewing obscenities.

But Sabri's most notorious moment occurred in July 2001. FBI agents recorded the developer handing over $5,000 to then-City Council member Brian Herron. The money was intended to win Herron's support for a hotel development that Sabri hoped to construct along Lake Street. Unbeknownst to Sabri, the council member, facing his own charges, was cooperating with federal investigators. Herron resigned from office a week later and served a year in prison for extortion.

After nearly four years of legal wrangling, Sabri was convicted of three counts of bribery. In addition to the $5,000 payment, he admitted that he offered Herron $10,000 to threaten the owners of a Taco Bell with condemnation, and a 10 percent cut of any government grants that the City Council member could procure for the project. He was sentenced to 33 months in prison and fined $75,000.

Sabri ultimately served 19 months, splitting his time between federal prisons in Leavenworth, Kansas, and Yankton, South Dakota. His sentence was reduced for good behavior and the completion of alcoholism treatment. "I have not drank since I came out, but I was a lush before," says Sabri.

He made his triumphant return to the Twin Cities via limousine in February, sober and 35 pounds trimmer. "It's not bad," he says of prison. "It makes you a better and stronger person."

The involuntary vacation has done little to alter Sabri's approach to business. The purpose of the Midwest Machinery project is to provide affordable housing for Somali immigrants, particularly those who work at Karmel Square, which is less than a block away.

Rashid Omar, a real estate agent with Medina Realty, says that there's an urgent need for cheap housing to accommodate the large size of most Somali families. "The bottom line is that this is a project that this community needs," says Omar, who is marketing the units for Sabri. "It's all about supply and demand." Even before construction has commenced, 25 families have signed up to rent apartments.

But such arguments have done little to persuade Whittier residents that the project is appropriate for the neighborhood. Jim Roscoe has owned a duplex directly across the street from the Midwest Machinery building for five years. The abandoned site has been the target of development plans for most of that time.

Most recently, the Cornerstone Group proposed converting it into condominiums. An initial plan to construct 53 units was supported by the neighborhood, but when the project expanded to 121 condos, it ran into opposition. That conflict—coupled with environmental concerns and a downturn in the condo market—led to the project's disintegration.

Cornerstone sold the building to Sabri in July. Now Roscoe and others are wishing they'd conceded to the former project. "It was too dense, but I'm kicking myself now for not supporting it," he says.

Roscoe is providing a tour of the neighborhood. It's National Night Out, and Pleasant Avenue is closed off to through traffic. A teenage rock band makes a racket at the corner of 28th Street, while neighbors gather to grill hot dogs and hamburgers nearby. The block is largely free of automobiles, but Roscoe says this is far from ordinary. "Typically on this block, every parking space would be taken," he says.

The primary reason for this congestion is Karmel Square. The popular mall has turned a relatively quiet residential block into a busy thoroughfare. Neighbors fear that the proposed apartment complex will profoundly exacerbate the problem. "I've had tenants move out because there's nowhere to park," says Dave Nelson, a landlord in the area.

Roscoe points out other reasons for residents to be suspicious of Sabri's plans. A former pool hall in a building owned by Sabri is plastered with a notice stating that the business doesn't have the proper license to operate. Another building across the street is affixed with a stop-work order due to permit violations.

But simmering just beneath the surface are racial issues. By focusing on the Somali community, Sabri has made it touchy for the project's opponents, who are largely white, to attack the proposal.

Chris Ledoux, who lives in an apartment complex just down the block from the Midwest Machinery building, questions whether the project will violate federal housing laws by discriminating against non-Somalis. "Is that fair housing practices?" asks Ledoux, who is openly gay. "I understand what it's like to be a minority, but is this fair?"

Others are less diplomatic in their assessment. On 29th Street, a group of residents are grilling burgers and drinking beer. They'll only talk about Sabri and the proposed apartment complex with the promise of anonymity. One woman says she hasn't invited company over in two years because she's embarrassed by the neighborhood. "I've been threatened," she says of the Karmel Square customers. "They've run after me. The women have threatened me."

Another neighbor is even more contemptuous of Sabri's efforts at community development. "This is a complete toilet," he says of the neighborhood. "It's a slum." He then adds: "I have nothing against Somalis."

Sabri isn't shy about playing the race card. "The reality is this: People don't like me and they don't like my clients, period," he says. "I hate to use the word racism, but that's what it's all about."

Since the August meeting, Sabri Properties has slightly scaled back the project. It now calls for just four stories and 89 units. But this accommodation has done nothing to placate area residents. At the Whittier Alliance's most recent community affairs meeting, a resolution of "no confidence" passed unanimously—a merely symbolic repudiation. The proposal is slated to go before the planning commission for approval in October or November.

Despite the continuing resistance, Sabri is confident that the project will move forward. He hopes to have display units ready to show potential tenants by March. "They don't have to love me," Sabri says. "But I have to be treated like everybody else. We have laws in America."

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