Fighting the Blight

But neither business is likely to survive the city of St. Paul's current plans for redeveloping this stretch of University Avenue. Earlier this month the St. Paul City Council, acting as the municipality's Housing and Redevelopment Authority, voted unanimously to spend up to $2 million to condemn the properties, seize them through eminent domain, and tear down the existing buildings. (A vacuum cleaner retailer that would also be adversely affected by the project has agreed to sell out to the city for $780,000.) Under the current plan, a development group led by the Welsh Companies would then build a $6.8 million, 21,000-square-foot commercial office building.

The redevelopment scheme is being spurred by the construction of a new $24 million public library and housing development, slated to open next year, on a nearby lot that once housed the Faust Theatre. In 1989 the city of St. Paul spent $1.8 million to purchase and shutter the porn theater. Six years later the building was razed. Since then the lot has served primarily as an outdoor market. The idea is to use the library project as a catalyst to jumpstart economic development in the long-beleaguered Frogtown neighborhood.

But a few businesses, most notably Olson Brothers Liquors and R & R Books, would have to be sacrificed to achieve this revitalization. And the entrepreneurs aren't happy about that prospect, claiming that the city is shortchanging them and curtailing their free speech rights. "My client doesn't want his property taken," says Joel Seltz, the attorney representing Olson. "He wants to be left alone."

According to city records, Olson has an agreement to sell the property for $1.3 million to C.K. Star Liquor Warehouse. The deal, however, is contingent on the new owner getting approval for a liquor license. The prospective company, owned by Chiev Ku, filed an application for the liquor permit in July with the city's Office of License, Inspections, and Environmental Protection, and it is currently pending. But the City Council will have final say on whether a liquor license is ultimately granted. Considering that the council has already unanimously voted to condemn the building, it seems highly unlikely that a permit will be awarded.

What's more, a report prepared by the city's Department of Planning and Economic Development assesses the worth of Olson's property at $481,000--or barely a third of the price that Olson has negotiated on the open market. And to make matters more puzzling, the report erroneously claims that the liquor store is currently "vacant." "I don't know why they keep on insisting that it's vacant when it's not," Seltz says.

The attorney further questions the presence of former City Council member Bob Long as the lead point person on the project for Welsh Companies. "He clearly stands to gain financially from this," charges Seltz. "It just seems unseemly and incestuous to me."

Bob Long, who is vice president for business development at Welsh Companies, scoffs at this notion, noting that the chair of the HRA, Jay Benanav, was his political foe in the mayoral race four years ago. "I'm not getting any political favors, I can tell you that right now," he says. Long further notes that Olson was seeking nearly twice as much as the $780,000 the city paid out to the vacuum retailer. "The city realized they were never going to reach an agreement with this guy at any reasonable price," he maintains.

Seltz acknowledges that there is little legal standing to fight the condemnation. A recent U.S. Supreme Court case, Kelo v. City of New London, gave judicial blessing to the use of eminent domain by municipalities seeking to clean up economically depressed neighborhoods. "I don't know that we could ever win on the propriety of the taking," he allows. "I'm just saying that in this circumstance the city shouldn't be doing it. They shouldn't be taking an economically viable business that's been there since prohibition."