Minneapolis business owners shocked after learning insurance won't be enough to cover demolition, clean up costs after riots

by Bryan Brammer · Sep 1st, 2020 2:34 pm

Last Updated Sep 2nd, 2020 at 9:28 pm

Business owners in Minneapolis are beside themselves after learning that insurance money will not be enough to cover the demolition and cleanup costs incurred as a result of riots and looting that destroyed neighborhoods and storefronts throughout the city.

Construction companies are billing owners anywhere between $100,000 to $300,000 to demolish their properties and haul away the debris. While many owners have insurance that helps with such expenses, most insurance companies only cover a maximum of $25,000 in demolition costs.

"We were really upset about that," Jay Kim, owner of the Sports Dome retail complex in St. Paul, told the Star Tribune. "We thought that was high. But we didn't know how much demolition would cost at the time."

Andrea Jenkins, vice president of the Minneapolis City Council, told local reporters that the exorbitant costs associated with demolition is unlawful.

"I think that is price-gouging and they should contact the attorney general," Jenkins said. "That is a symbol of capitalism run amok."

Don Rachel, CEO of Rachel Contracting based in St. Michael, Minnesota, said government regulations requiring construction contractors to treat all debris from torched buildings as hazardous is one of the biggest reasons why costs for removal are so extreme.

"We aren't taking advantage of anybody," Rachel told the Star Tribune. "Some people might have sticker shock, but how do they know? Most of these folks have never had to wreck a building."

Another business owner, Ade Alabi, said the city sent him a bill for $75,000 after contractors knocked down his 32,700-square-foot retail complex, but has struggled to find a company that will finish the job.

One of the three contractors from whom he sought bids told Alabi it would cost well over $350,000 to haul away the debris.

"I don't know what to do," Alabi said. "I think the city should have helped us more, but they haven't."


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