Disabling Development

Roy Hansen says the Disabled American Veterans will have to gut services if the City of St. Paul condemns the Unidale Mall
Richard Fleischman

If all goes according to plan, St. Paul's Unidale Mall, the barely two-decade-old commercial strip at the intersection of University Avenue and Dale Street will soon be flattened by bulldozers and wrecking balls.

In its place will rise a Pan Asian Urban Village. The $32 million project, led by the Hmong Development Corporation, will eventually include retail and office space, a new headquarters for the Asian Pacific Community Center, and 50 units of senior housing. Almost $6 million in public money will be tapped to help pay for the development. The eight-acre site is envisioned as a showcase for St. Paul's booming Asian population and a cornerstone for the revitalization of University Avenue.

But when the dust clears, the Unidale Mall may not be the only structure left in ruins. The Minnesota branch of the nonprofit Disabled American Veterans (DAV) stands to lose more than half of its annual income if its thrift store is shuttered. The proposed development also threatens the existence of a public high school, Area Learning Center, that received more than half a million dollars in taxpayer support in 1997 for expansion and renovations at its Unidale location. Six other businesses, ranging from a Wendy's to Earth's Beauty Supply, would be left without homes.

The DAV is now spearheading a last-minute campaign to derail the Pan Asian project. Working with other businesses and neighborhood activists, it has formed the Unidale Mall Tenants Group. In recent weeks the organization has been lobbying city council members and the mayor's office to scuttle the development. More than 4,000 people have signed petitions opposing the mall's demolition and a protest is slated for this Saturday. The tenants group has even hired an architecture firm and drafted an alternative development plan to expand and renovate the existing shopping center. If all else fails, the nonprofit may sue the city. "The community is 100 percent on our side and the facts are 100 percent on our side," says David Harstad, an attorney working with the group.

More than half of the DAV's annual budget is generated by its thrift store. Last year the shop had sales of more than $2 million, with profits of $238,000. It employs some 45 people, paying them more than $1 million in wages annually. The DAV used to operate a second thrift shop in north Minneapolis, but the organization shut it down in 1999 after it was robbed three times. Since then the Unidale operation has been the DAV's primary source of income.

The money generated by the thrift store is used to provide services to veterans suffering from physical or psychological impairments. Last year the DAV transported more than 27,000 people to medical appointments, for example. Another of its programs pays the television bills for residents of five state nursing homes serving veterans. The group also provides emergency financial aid to former soldiers who can't pay their bills.

The DAV believed that its thrift store was locked in at its present location for many years to come. In August the organization signed a five-year extension on its lease and agreed to rent an additional 2,500 square feet from Kraus-Anderson Realty, which owns the property. Then in October the DAV added another five years to the contract, securing its space into 2011. The rent is just $6 per square foot, with a $1 jump after 2006. "For us, if everything works out, it's a hell of a deal," says Roy Hansen, adjutant for the DAV. If the city moves forward with condemnation, however, the contract would be worthless.

The DAV was aware of the Pan Asian Village plans, Hansen acknowledges, but he says that it was assured by Kraus-Anderson that the project would not come to fruition. Only in the past month has the DAV realized that the threat to its store is legitimate. Since then, Hansen says, the DAV has concluded that it would cost at least $200,000 to relocate the operation and two or three years to rebuild its customer base. In the meantime, services would have to be slashed to make up for the drop in revenue.

The DAV is not the only Unidale tenant that is threatened by the Pan Asian development. The Area Learning Center is a public high school that caters to some 500 students who haven't fared well in traditional settings. Some of the students have had drug problems; others are teen parents.

"The St. Paul Area Learning Center is in a prime location to serve the needs of students who have been unable to really meet their needs in a regular school environment," says Doug Revsbeck, the school's site administrator. "We're on bus lines, we're centrally located....Without our service our fear is that hundreds of students who need to continue their education outside a traditional model will be without that help."

In 1997 the St. Paul Public School District spent $557,000 in taxpayer money to expand the school by almost 6,000 square feet. Revsbeck says that officials estimate it would cost another $2 million to relocate the program. In addition, he says, the school has been searching for a new home for the past year but without any luck. "We've looked all over the city," he says.

So far, the Pan Asian development has received the blessing of elected officials. The St. Paul City Council, acting as the Housing and Redevelopment Authority, has twice voted unanimously to green-light the project. Next week the city council is slated to take another step toward making the Pan Asian Village a reality. It will decide whether to create a tax-increment financing district in the area, which would allow the city to help pay for the construction. Ultimately the city plans to seize the property and raze the mall.

Contacted for this story, the area's council member, Jerry Blakey, a supporter of the Pan Asian project, was unaware of the financial crunch facing the Area Learning Center. Blakey wonders why the school and the DAV have waited so long to raise these issues. "They want to blame the city or the Hmong Development group because they haven't done their homework," asserts Blakey. "That's what it seems to me."

He also suggests that any time the city approves redevelopment plans for struggling areas, some businesses will have to be relocated. "It's not like you're out in a cornfield where you can just go in and put up a development."

Seventh Ward city council member Kathy Lantry was also unaware of the difficulties facing the Area Learning Center, but she says it's part of the risk organizations run when renting property. "The fact is, when you lease a property your life is more in the hands of someone else," says Lantry.

Under state law the City of St. Paul would be required to pay all moving costs incurred by Unidale tenants as a result of the condemnation. The businesses would also be entitled to as much as $10,000 in "reestablishment expenses," which could include advertising and renovations at a new location. Marie Franchett, of the St. Paul Department of Planning and Economic Development, says that the city will begin helping affected businesses find new homes once the Pan Asian deal is finalized. "We haven't been able to do any of that because there's been no final approval of the project," she says.

These assurances have failed to mollify the tenants. They are reluctant to even look for new locations because of the uncertainty of the project. Ray Holloway, president of Rapit Printing, says that because most of the businesses are locked into long-term leases, their hands are tied. "I don't think you'll find anybody in that mall who's even looked, because they don't have the ability to pay two rents," says Holloway, whose lease runs through 2006. "This will destroy just about every business in that strip mall, including mine."

Rapit Printing is no stranger to city-mandated wrecking balls. Its Richfield location was demolished in order to make way for the new Best Buy corporate headquarters. In Burnsville the 54-acre "Heart of the City" project, which will include a performing-arts center and high-density housing development, is to be built on land that used to house another Rapit Printing location. Holloway sold that store to developers rather than wait for it to be seized through eminent domain.

Holloway's experiences have left him cynical about the chances of stopping the Pan Asian project. "They're going to do this no matter what," he declares.

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