A Pawn in Their Game

With the new license moratorium in place, Kasella is stuck with an $800-a-month fee to hold an empty storefront
Craig Lassig

Larry Kasella reclines behind a metal desk at R.H. Auto Sales on West Seventh Street in St. Paul, smoking Doral cigarettes and shaking his head: The city of St. Paul--Kasella's employer of 34 years--has just fouled up his retirement.

Kasella started out as a janitor and worked the last 14 years as building maintenance supervisor for the St. Paul Public Library before retiring on May 29. A short three weeks later, on June 19, Kasella applied for a license to open a pawnshop on West Seventh, which bisects the brewery district his family has called home since his grandfather immigrated from Czechoslovakia. The 58-year-old Kasella has a city pension, but he's four years away from collecting Social Security, and he likes to stay active. The pawnshop seemed like a great plan to make a little money and stay in touch with folks in the neighborhood. If everything went well, Kasella planned to turn the business over to Larry Jr.

Today Kasella's plans are in limbo, if not completely scuttled. Last month, the city imposed a moratorium on opening new pawnshops, which could last up to half a year, pending a study by its Planning and Economic Development department (PED). Kasella says that move will cost him about $800 a month, just to hold the property he'd intended for the shop while it sits vacant.

"I know everybody out West Seventh," says the garrulous Kasella, who notes that he and his three kids all own homes within a mile of the proposed business. "I just wanted to do something with the public--I love talking to people. I wanted a family-type pawnshop. I got three grandkids. I wanted something they could come into and I wouldn't have to walk around hiding things. We made it very clear we would not deal any guns, we would not deal any X-rated movies or sex-related products. I don't want anything like that in my neighborhood." For now, the classic-car buff is helping out a friend by minding his used car lot.

Kasella argues that the modern-day pawnshop is unlike those that operated in the past. "Years ago I used to go into pawnshops downtown with my dad, and they were kind of scuzzy, you know," he recalls. "Ours is going to be nice, well-lit, clean, bright...it's gonna be a neat place."

Even with the scuz of yesteryear, Kasella has fond memories of the pawnshop as an emporium that sold dreams at a markdown. He remembers admiring his father's ruby ring and hoping that one day he could wear it proudly. Instead, Kasella's older brother was awarded the honor. But when Kasella was 14, his father took him to a pawnshop and bought him his own ruby ring, which he still wears to this day. Last Christmas he bought his wife a diamond ring from a pawnbroker, for a fraction of what it would have cost retail. These days he has his eyes open for a good cordless drill.

He won't be acquiring one at his own pawnshop any time soon. The move to suspend the issuing of new licenses came about after the Eagan-based chain Pawn America submitted an application to open a store on White Bear Avenue in St. Paul City Council President Dan Bostrom's ward on August 11. Bostrom presented a proposal to the council on August 19 calling for a one-year moratorium on pawnshops, currency exchanges, tobacco shops, and secondhand-goods stores.

Bostrom maintains that he was unaware of the applications filed by Pawn America or Kasella when he brought the issue forward, and insists that he was not out to block Pawn America from locating in his ward: "I'm not that kinda guy," he insists. Bostrom says he's known Kasella for 15 years, dating back to when Bostrom was on the St. Paul Board of Education and Kasella was heading up the custodians' union: "I told him that I understand that this could be a problem, but I figure that the issue could be of significant importance, that we have to deal with this. It certainly had nothing to do with him personally." Bostrom says he believed more study was warranted on the heels of recent revisions to the pawnshop ordinance in Minneapolis.

But Brad Rixmann, the chief manager and owner of Pawn America, maintains that his company--which runs 11 outlets around the state--was singled out: "Cities have used moratoriums as an excuse to stop pawn stores and other businesses from opening up in their community," Rixmann says. He notes that his company is very image-conscious and does not buy firearms at any of its local outlets. He also says that the cities of St. Paul and Minneapolis currently require pawnshops to use the Automated Pawn System (APS), which helps track stolen goods.  

According to statistics from St. Paul's License Inspections and Environmental Protection department, St. Paul had 12 pawnshops in 1995 and currently has 10, plus the two pending applications. Minneapolis, by comparison, has only four full-scale pawnshops, plus one jewelry store which has a pawn license limited to jewelry.

St. Paul Mayor Norm Coleman opposed the moratorium as an unnecessarily "drastic measure" which interfered with legal, well-regulated businesses. The St. Paul Area Chamber of Commerce and the St. Paul Business Review Council came out against it for similar reasons. Critics like Rixmann noted that the city had recently addressed the very same issue, with study by PED and a moratorium that was in place for 22 months until it ended in November 1996. Out of that process, the City Council had required that all new pawnshops hold a Special Condition Use Permit, designed to provide a venue for neighborhood review. In Kasella's case, the neighborhood's West 7th/Fort Road Federation sent a letter stating that it did not take an official position on his application.

Nevertheless, a moratorium resolution passed 5-2 on September 2, with council members Jerry Blakey and Chris Coleman voting against it. The mayor noted in a letter on September 16 that since the measure had passed with the necessary five votes to override his veto, he wasn't going to exercise that option. But before the ultimate vote on the official ordinance, council member Jay Benanav changed his mind.

"Larry Kasella did talk to me and I listened," says Benanav. "I guess I finally concluded that he played by the rules as they were in place when he applied for his pawnshop license. We changed the rules on this guy." Benanav says his opinion was also swayed after he visited the Pawn America store at University and Fry in his ward, but he says "80 percent" of the reason for his switch was Kasella's plight. He says he may have been willing to vote for a measure which would not have affected pending applications.

The September 23 ordinance vote passed 4-2, with Coleman and Benanav dissenting. Blakey was out of the room at the time, but says he would have voted against the measure again. City Hall scuttlebutt held that the mayor would likely veto the ordinance: He now had an opening because the council was a vote short in its ability to trump him. Kasella waited while the five-day window for the Mayor to step in ticked away and finally expired.

The scaled-down ordinance, which applies only to pawnshops, calls for a moratorium of up to three months while PED conducts its study, and provides a provision for the council to extend it an additional three months.

Benanav was surprised when the Mayor sent the measure along and allowed it to pass, albeit without his signature. Alluding to a recent gubernatorial campaign photo-op held by Gov. Carlson and Coleman, Benanav says, "I would have suggested that he use that big veto pen he got from the governor and veto this resolution as well. I was hoping that he would see the plight of Larry Kasella and small business in general."

Instead, the mayor sent an October 2 letter noting that while he was "accommodating" the council on the issue, "I want to do everything in my power to minimize the impact of this moratorium." To that end, Coleman directed PED to get cracking and complete its study within 30 days.

Bostrom says that's fine with him: "I have no problem with that. There's no intention to drag any feet with this." But council member Chris Coleman (no relation to the mayor) sees it differently. "It really represents to me a mayor who's trying to play both sides of the fence on this thing," he says. "I think it was disingenuous and really unfair to the Larry Kasellas of the world." The Larry Kasella of St. Paul agrees, adding that he has more basic concerns than the mayor's fence-sitting: "Is the city going to pay my rent on this thing until the city lifts the moratorium?"

Pawn America's Rixmann says his firm is considering its options, which could include legal action. "We feel that we have been wronged, so it would be unwise for us not to explore that alternative. We have really been singled out." Rixmann says Pawn America's outlet at the corner of University and Fry in St. Paul opened June 26 after the company invested $1.1 million in the site. Its newest store opened just a few weeks ago, without incident, in Bloomington.

The case in favor of pawnshops even got a boost from the St. Paul Police Department, in the form of a letter from Chief William Finney to Mayor Coleman on October 2 that began, "I would like to express my support for the licensing of new pawnshops, which have evolved from businesses that were perceived as seamy, 'fly by night' operations dealing with criminals, to clean, bright retail outlets comparable to Best Buy or Circuit City." The letter went on to say that police have recovered $19,500 worth of stolen goods this year thanks to the Automated Pawn System, and recounted a 1996 incident that led to the recovery of a laptop computer stolen from Sen. Paul Wellstone's car.  

As for the Mayor's call for getting the study completed quickly, Rixmann says that in his experience, government efforts to expedite the process never seem to pan out as promised: "In all of our dealings with government," he concludes, "that is really never what occurs." He says he won't be surprised to see the moratorium dragged out to the end of the maximum time period.

Kasella notes that while Pawn America has the resources either to wait out the moratorium or to go after the city in court, he can't afford to do either. He says he doesn't want to get the city "ticked off" at him, because he'd still like to open his shop on West Seventh, but he can't help but feel like he's been caught in political pincers that weren't meant for him.

"This is going to probably put me out of business before I even get into business," he says with a rueful chuckle. "I basically gave my life to the city and now I can't open a business in the city."

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