Fifteen businesses in and around St. Paul’s Lowertown neighborhood are suing the city of St. Paul and Listening House, a Dayton’s Bluff day shelter, in order to block their plans to expand into the former Red’s Savoy Pizza location on East Seventh Street.
The lawsuit, filed Wednesday in Ramsey County District Court, seeks more than $50,000 in damages on the basis of six claims, including negligence and “anticipatory nuisance.”
The businesses allege that the St. Paul City Council, acting as the Housing and Redevelopment Authority, inappropriately authorized the transfer of $1.4 million in tax proceeds known as tax increment financing, or TIF, without proper public notice in advance of June 22 and July 27 HRA meetings. They want a judge to stop the transfer of funds to the day shelter.
“My clients are hopping mad that this was all done without public notice, with no transparency,” attorney Patrick O’Neill Jr. said in a brief interview. “No one came and told them. There were technical problems with how they did it. The majority of my clients found out about it after it was approved.”
On June 22, city HRA staff presented the city council with a wide-ranging $28 million TIF spending plan and then held an HRA vote 90 minutes later. On July 27, Councilmember Rebecca Noecker recommended using $1.4 million from the $28 million for Listening House, waiving a 45-day public notification process. The council, meeting as the HRA, approved both motions.
“This $1.4 million — awarded without public notice or a hearing — will be used to support an operation that Listening House, the (city Housing and Redevelopment Authority), and the city have actual notice will have an adverse effect on the surrounding businesses, their employees and their customers,” reads the complaint.
Business owners have pointed to a negative experience with Freedom House, a previous temporary satellite location for Listening House, when it was located at 296 West Seventh St. The shelter, which did not screen visitors for drugs or contraband, closed in May following months of complaints from nearby restaurant owners about litter, vagrancy, theft and assault.
O’Neill pointed to statistics compiled by the city showing a 78 percent increase in quality-of-life crimes in the surrounding area in the first five months after Freedom House began operation, and a 36 percent increase in serious crimes in the same period.
The former Freedom House site, previously known as Fire Station 51, is being returned to the St. Paul Fire Department, but city officials have worked with Listening House to locate a new home for day services at the former Red’s Savoy site before winter comes.
In November, the council approved a zoning ordinance that allows drop-in day services for the homeless in most business, mixed-use and industrial districts throughout the city, provided they take up less than 7,000 square feet.
In the near term, the suing businesses want a temporary restraining order against the city prohibiting the establishment of homeless day shelters “without any permitting or review process for shelters of all sizes and in all locations.”
The plaintiffs include the owners of Heppner’s Auto Body, Bulldog Lowertown, Dark Horse Bar, Gopher Bar, Barrel Theory, Schurmeier Lofts, Dacotah Properties, Saramar Enterprises, Kat-Key’s Lock & Safe, Inc., Earl & Wilson Event Center, MB Properties, condominium owner Matthew D. Gross and Lowertown residents and building owners Tom and Sandra Erickson.
A manager for Listening House was not immediately available for comment Wednesday afternoon. Kamal Baker, a spokesman for St. Paul Mayor Melvin Carter’s office, said the city will respond to the lawsuit in coming days. “As we have throughout the course of the pandemic, we’re focused on connecting people experiencing homelessness to services, shelter and pathways to housing, including collaborating with partners in our community who provide vital supports,” he said.