Lowertown business owners sue St. Paul over homeless shelter expansion

The city of St. Paul and Listening House, a Dayton’s Bluff day shelter, are being sued by fifteen companies in and around St. Paul’s Lowertown district in an effort to thwart their intentions to expand into the old Red’s Savoy Pizza facility on East Seventh Street.

The case, filed on Wednesday in Ramsey County District Court, makes six allegations, including carelessness and “anticipatory annoyance,” and demands more than $50,000 in damages.

The companies claim that the St. Paul City Council improperly approved the transfer of $1.4 million in tax profits known as tax increment financing (TIF) without giving the requisite public notice prior to the HRA meetings on June 22 and July 27. They want the court to halt the money’s transmission to the day shelter.

In a short interview, attorney Patrick O’Neill Jr. said, “My clients are hopping upset that this was all done without public notice, with no transparency.” “No one showed up to inform them. The way they did it had technical issues. Most of my clients learned about it after it had been authorized.

On June 22, municipal HRA officials gave the city council a detailed $28 million TIF expenditure plan, and 90 minutes later, they convened an HRA vote. On July 27, Councilmember Rebecca Noecker proposed skipping the 45-day public notice period and utilizing $1.4 million of the $28 million for Listening House. Both measures were passed by the council when it convened as the HRA.

The complaint states that “Listening House, the (city Housing and Redevelopment Authority), and the city have actual notice that this $1.4 million — awarded without public notice or a hearing — will be used to support an operation that will have a negative impact on the surrounding businesses, their employees, and their customers.”

Owners of nearby businesses have had a bad experience with Freedom House, which served as Listening House’s temporary satellite site while it was situated at 296 West Seventh St. The shelter closed in May as a result of months of complaints from adjacent restaurant owners about littering, vagrancy, theft, and violence. The shelter did not check guests for drugs or contraband.

O’Neill cited data produced by the city that showed a 78 percent rise in local quality-of-life offenses in the first five months after Freedom House opened, as well as a 36 percent rise in major crimes in the same time frame.

While municipal authorities have collaborated with Listening House to find a new location for day services at the old Red’s Savoy site before winter arrives, the former Freedom House location, formerly known as Fire Station 51, is being returned to the St. Paul Fire Department.

A zoning rule that permits drop-in day services for the homeless in the majority of commercial, mixed-use, and industrial zones around the city was adopted by the council in November, as long as they occupy less than 7,000 square feet.

The companies that are suing the city are seeking a short-term injunction that forbids the construction of homeless day shelters “without any approval or review procedure for shelters of all sizes and in all locations.”

Owners of Heppner’s Auto Body, Bulldog Lowertown, Dark Horse Bar, Gopher Bar, Barrel Theory, Schurmeier Lofts, Dacotah Properties, Saramar Enterprises, Kat-Lock Key’s & Safe, Inc., Earl & Wilson Event Center, MB Properties, condo owner Matthew D. Gross, and residents of Lowertown and building owners Tom and Sandra Erickson are among the plaintiffs.

On Wednesday afternoon, a manager at Listening House was not immediately available for comment. In the next days, the city of St. Paul will reply to the complaint, according to Kamal Baker, a spokesperson for Mayor Melvin Carter’s office. According to him, “like we have done throughout the epidemic, we’re focusing on connecting persons suffering homelessness to resources, shelter, and paths to housing, including working with partners in our community who offer crucial assistance.”

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