By Jake Rossen
By Jesse Marx
By Michelle LeBow
By Alleen Brown
By Maggie LaMaack
By CP Staff
By Jesse Marx
The Northside Residents Redevelopment Council was formed from the ashes of the 1968 riots along Plymouth Avenue. The nonprofit group was designed to spark economic progress in the struggling neighborhoods of Near North and Willard Hay. The organization is credited with building hundreds of houses and helping dozens of struggling homeowners keep their homes out of foreclosure.
But in recent years, as several marquee projects have flopped, NRRC has seen its own economic prospects dim. The Plymouth Plaza Shopping Center, which NRRC took control of in the mid-'90s, has been plagued by vacancies and crime. The organization has repeatedly failed to make good on roughly $1 million in city-financed loans granted to refurbish the distressed strip mall.
Likewise, NRRC's ambitious plan to build condominiums, commercial space, and townhomes on a parcel of land along Plymouth Avenue went belly-up last year. And a four-home development that was part of the Heritage Park project along Olson Highway ended with two of NRRC's properties in foreclosure.
The end result has been spiraling debt and financial insecurity. As of last month, the nonprofit group and its affiliated organizations owed more than $1 million to various creditors, according to city documents.
In August, unable to meet payroll, NRRC temporarily laid off its entire staff. While the employees were reinstated within a week, the action sufficiently alarmed city officials that they stripped NRRC of its funding to provide foreclosure prevention services in north Minneapolis. At a time when foreclosures are decimating North Side neighborhoods, NRRC terminated its three employees in this field.
But a potential financial panacea now looms for NRRC. In July, the University of Minnesota signed an agreement to purchase the Plymouth Plaza Shopping Center for $1.1 million. The parcel of land is to be the centerpiece of the University Northside Partnership, the U of M's ambitious, multimillion-dollar initiative to bolster health care, improve education, and reduce poverty in the area. The real-estate deal is expected to be approved by the university's Board of Regents next month.
"This sale to the university is a lifesaver for NRRC," says Bob Miller, executive director of the city's Neighborhood Revitalization Program, which provides funding to the nonprofit group. "If this deal falls apart, this organization cannot survive."
The Plymouth Plaza Shopping Center has struggled since its inception in the mid-'70s. The black-owned shopping center was supposed to be a symbol of uplift for Near North's African American community, and was initially named the King Shopping Center in honor of the slain civil rights leader.
But by the time NRRC took over the strip mall two decades ago, the grim economic realities of the neighborhood had manifested. The shopping center had twice gone belly-up under successive owners. Nobody wanted the property.
NRRC acquired it for just one dollar. In 1991, the city's fledgling Neighborhood Revitalization Program allocated $1.45 million in loans to rehab the commercial property. NRRC created a for-profit subsidiary, the Plymouth-Penn Corporation, to run the shopping center.
It took five years for the rechristened shopping center to open for business. The grand opening arrived on May 15, 1996, and featured such dignitaries as then-City Council president Jackie Cherryhomes and then-Hennepin County Commissioner Sandra Hillary. Tenants such as Barbara's Salon of Beauty and Wash-n-Ware Laundromat signed up, but there remained a gaping hole in the strip mall's commercial lineup: an anchor grocery.
The Plymouth Penn Corporation immediately fell behind on its loan payments. A July 1997 Minneapolis Community Development Agency memo expresses exasperation with the company's failure to make good on the loan, noting that it had paid NRRC property-management fees of more than $17,000 so far that year, rather than pay down its loan.
"It is clear that there is no good faith effort here to honor their debt to the MCDA," the memo notes. "They are simply waiting to see what our reaction to all of this will be."
The shopping center finally secured its anchor tenant, Snow Foods, in 1998. Hazem Obeid, a Palestinian immigrant, says that he and his business partner were lured to the area by city officials. "They wanted this store to be running and to service the neighborhood," says Obeid, who had previously operated a convenience store in south Minneapolis. "They knew that I run a clean business."
But the presence of Snow Foods did little to improve the shopping center's economic prospects. The city made repeated attempts to keep the project afloat. In 2001, the agency provided a $130,000 grant to repair the mall's roof.
That same year, it amended the loan agreement to accommodate the company's struggles. Under the terms of the new deal, once the Plymouth-Penn Corporation made good on its original $338,000 loan, the second loan of $502,000 would be forgiven. Plymouth-Penn Corporation was given until August 1, 2007, to finish paying down the initial debt. "We have had trouble collecting on those funds since day one," says Miller. "They would never come current on it."
A constant problem for the shopping center has been open-air drug dealing in the parking lot. This criminality is particularly galling because the strip mall is located next to the Minneapolis Police Department's Fourth Precinct headquarters.