Minneapolis business owners stunned after discovering insurance won’t be enough to cover cost of cleanup after riots

“All of the city officials came and looked, but it is almost 11 weeks now and no answer."

Business owners in Minneapolis are scrounging for answers after discovering that insurance money will not be enough to cover clean-up costs after rioters ransacked neighborhoods and hollowed out storefronts, according to a report published Monday.

Owners are being asked to fork over between $100,000 and $300,000 for construction companies to demolish and eventually haul away buildings that were all-but destroyed after the May riots, the Star Tribune reported. They are shocked, angry and feeling desperate, as most insurance policies only cover $25,000 in demolition costs, the report noted.

“We were really upset about that,” Jay Kim, a property owner in the city, told the Star Tribune. “We thought that was high. But we didn’t know how much demolition would cost at the time.” His insurance policy only covers $25,000 for the cost of flattening what remains of his business so he can rebuild, the report noted.

Rioters and looters began destroying sections of the city shortly after the death of George Floyd, a black man who died in May after a police officer kneeled on his neck for several minutes, video of the incident shows.

“I think that is price-gouging and they should contact the attorney general,” Andrea Jenkins, vice president of the Minneapolis City Council, told reporters, calling the price increases an example of “capitalism run amok.” Contractors are dismissing such claims.

Costs associated with government regulations requiring construction contractors to treat all debris from a torched building as hazardous is one of the biggest reasons why prices for removal are so high, according to Don Rachel, CEO of Rachel Contracting, a large contractor in the state.

“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.”

A contractor first offered to demolish Faisal Demaag’s store, Chicago Furniture Warehouse, for $18,000 before the price increased to $133,000, he told the Star Tribune. Demaag’s insurer will only cover $25,000 while the Lake Street Council has agreed to bridge the gap, kicking in another $25,000, the report noted.

The Lake Street Council is a non-profit serving businesses in Minneapolis that created an online fundraising campaign to help small businesses rebuild after the riots.

“All of the city officials came and looked, but it is almost 11 weeks now and no answer,” he said.

Ade Alabi told the Star Tribune that he is struggling to find a contracting company willing to demolish his 32,700-square-foot retail complex. One of the three contractors from whom he sought bids told Alabi that it will cost $363,000 to take away the debris, the report noted.

“I don’t know what to do,” said Alabi, who told the Star Tribune that he will have only $200,000 left to rebuild after paying off his $3.4 million mortgage. “I think the city should have helped us more, but they haven’t.”

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This article was republished with permission from the Daily Caller News Foundation


Chris White