Businesses at George Floyd Square sue Minneapolis, Mayor Frey for $30 million, demand condemnation

Citing years of deterioration and crime since George Floyd’s murder, several business owners at the intersection of 38th Street and Chicago Avenue in Minneapolis demand in a new lawsuit that the city and Mayor Jacob Frey begin eminent domain proceedings to take over their properties.

Last week, the owners of Cup Foods filed a civil lawsuit in Hennepin County District Court seeking $30 million in damages, arguing city actions ruined the businesses and constitute an unlawful taking of their property without just compensation.

The lawsuit argues that business in the area lost revenue, real estate value, reputation and tenant and rental income for both business properties and apartments due to how the city handled the unrest after Floyd was murdered by Minneapolis police. That includes the use of concrete barricades to isolate the area that became known as George Floyd Square. It points to a rampant escalation of violence in the neighborhood because of these decisions and alleges the city created a “No Go Zone” for police near the businesses.

The legal action, known as a writ of mandamus, comes two months after Hennepin County Judge Edward T. Wahl dismissed a civil lawsuit filed by the business owners in 2023 that sought $1.5 million in damages from the city and Frey. Wahl dismissed with prejudice claims of negligence and nuisance against the city and claims the city charter had been violated, meaning they cannot be refiled.

But the claim that the city had effectively taken over the property “without formally invoking its eminent domain power” was dismissed without prejudice, meaning that it could be subject to further inquiry.

Wahl said if the businesses near 38th Street and Chicago Avenue wanted to make that claim, they first needed to file the writ of mandamus, a term for ordering the government to properly fulfill their official duties or correct an abuse of discretion.

The new filing essentially asks the city to begin imminent domain proceedings, said Michael Healey, the lawyer representing Cup Foods Inc.; Menthol Tobacco LLC; Southside Electronics, Inc.; NMA Investments, LLC; and 3759 Chicago Ave, LLC. Healey said seven additional businesses will soon file similar suits against Minneapolis and Frey.

“There are two possible outcomes, one is the city will allow my clients — a couple had to sell or leave town — but the folks that still own businesses there could conceivably keep the property if a settlement is reached with the city on the diminished value,” Healey said. “The other possible outcome is the city grants the writ and initiates an official taking of these properties in which case they will definitely have to be paid something. That would have to be litigated.”