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How gun violence kills new business in Minneapolis

When the Minneapolis murder rate climbs, new businesses don't open.

When the Minneapolis murder rate climbs, new businesses don't open. Aaron Lavinsky, Star Tribune

Lifelong northeast Minneapolis resident Andrew Volna remembers the days he crossed the Mississippi River.

The reasons to visit the North Side were many. Summertime, the public pool. Basketball season, gyms. On any given day, good places to eat. 

Decades removed, Volna can't say the last time he ventured into the area that gave him some golden memories of youth.

"Back in the day, West Broadway, that area in particular, had an edgy, cool energy about it. And there were reasons for going to the North Side," Volna says. "But there hasn't been anything that would make me drive over the bridge for years. Not a Home Depot. A place to work out. Not a good restaurant I can think of."

A new report by the Urban Institute tries to explain why.

The nonprofit studied gun violence and business statistics from six cities, Minneapolis included. It sought to answer the question: "Is gun violence stunting business growth?"

In Minnesota's largest city, Washington, D.C., and the four others researched, gun homicides and gunfire in neighborhoods have the most negative effects on the starting of new businesses. Moreover, the report showed that retail and service industries are likely to be disproportionately affected by high gun violence levels.  

Minneapolis' economic growth during the years studied (2010 through 2012) was better than Oakland's, where the number of gun homicides was on the rise, but the City of Lakes fell behind Washington, D.C., where gun homicides decreased. 

According to researchers' findings, a spike in gun violence costs Minneapolis measurable amounts of economy in the year after a relatively high number of murders. 

"In Minneapolis," the study says, "one less gun homicide in a census tract in a given year was statistically significantly associated with the creation of 80 jobs and an additional $9.4 million in sales across all business establishments the next year."

Institute data has 2,600 new Minneapolis businesses opening in 2009. That year, there were only 12 gun murders in the city; almost 5,000 establishments opened in 2010.

The number of gun homicides tripled in 2010, and the city would average around 35 gun murders between 2010 and 2012. New businesses started in 2011 and 2012: 2,300 and 780, respectively.   

City Council member Blong Yang understands the economics of gun violence on his north Minneapolis ward. He points to Cub Foods, north Minneapolis' only full grocery store. It spends $250,000 annually on security.  

"It's a tax on them and hurts them economically, but they're doing it," Yang says. "And they're a big guy. What about the small guys? They'd have to worry about the safety of their customers, the safety of their employees. They couldn't afford it. I mean that's the part that makes it difficult."

There's promise, according to Yang, in the development of the Upper Harbor Terminal, 48 city-owned acres just north of the Lowry Avenue Bridge. But plans of economic investment in the riverfront are in the early stages.    

"At the start of it," he says, "is people have to feel safe. And until you do enough to make it safe, that's the reality."