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State lawmakers will pay Minneapolis to walk away from Roof Depot site — and urban farm supporters are declaring victory

Supporters of an urban farm in the East Phillips neighborhood still have a long way to go, but the appropriation of $6.5 million could break an ugly, years-long impasse with city officials.

East Phillips Neighborhood Institute board members Cassandra Holmes, left, and Dean Dovolis address reporters during a press conference on May 11.
East Phillips Neighborhood Institute board members Cassandra Holmes, left, and Dean Dovolis address reporters during a press conference on May 11.
MinnPost photo by Kyle Stokes

Just a few weeks ago, the idea of starting an 8-acre indoor farm in the vacant Roof Depot warehouse in south Minneapolis seemed like a longshot activist dream.

But in recent weeks, urban farm supporters gave up polarizing public protests in favor of shrewd, behind-the-scenes maneuvers at the Minnesota State Capitol — and now, for the first time in years, it looks like they actually have a real chance of making their dream a reality.

State lawmakers confirmed Saturday that two obscure line items tucked into much broader spending bills in the Minnesota Legislature amount to a $6.5 million down payment to convince the current owner, the City of Minneapolis, to abandon their plans for the Roof Depot property and make way for urban farm supporters to purchase the site. 

House DFL leaders expect the bills to clear both chambers before midnight Monday.

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“I am pleased to see the state and the city partnering together to find solutions for the people and families who live and work in my district,” said Rep. Hodan Hassan, a DFLer whose south Minneapolis district includes the site.

Urban farm supporters have a long way to go. According to terms of their agreement with the city, they have a little over three months to raise $3.7 million to purchase the site. If they succeed, the state Legislature would need to deliver more funding next year to repay city officials for the full $16.7 million they’ve already sunk into the property.

It’s not even clear whether the 230,000-square foot building, which has sat vacant for years, is in any shape to house their indoor farm.

Still, the state appropriations have broken an impasse between city officials and urban farm supporters that has dragged on for years — and has turned ugly at times. Residents of East Phillips have accused city officials of denying environmental justice and economic opportunity to a low-income, majority-BIPOC neighborhood. Angry Roof Depot protests at City Hall also sparked backlash, with some City Council members alleging urban farm supporters had threatened their safety.

The turnaround has been breathtaking. In February, the city came within days of demolishing the warehouse before urban farm supporters won a last-second reprieve from a Hennepin County judge. Now, city leaders have agreed to move on from the property altogether — and urban farm supporters say it’s possible they could break ground as soon as next May.

“This is very dramatic what’s occurred here,” said Dean Dovolis, board president of the East Phillips Neighborhood Institute, which has championed the urban farm idea for a decade.

The backstory

Urban farm supporters have long hoped their idea  — for a development which would also include residential, retail and job training space — would inject new vitality into the area. Dovolis said supporters had funding lined up in 2015 but that city officials’ strong-arm tactics prevented them from buying the Roof Depot site. (City officials have denied this.)

Instead, the City of Minneapolis purchased the property in 2016 in hopes of replacing an aging water works facility. They planned to expand an existing public works campus in East Phillips onto the neighboring Roof Depot property.

Outraged, neighbors persisted in their objections to the city’s plans, even after the sale went through. Supporters saw the urban farm as an antidote to decades of pollution from freeways and industry in East Phillips. They also feared that demolition of the Roof Depot warehouse — which sits on a former federal Superfund site — could spread toxic contaminants around the neighborhood. (City experts said the demolition would be safe.)

But when members of subsequent City Councils had second thoughts — they voted on at least two occasions in later years to delay or cancel the project — they ran into the same obstacle each time: The city had paid for the land out of a restricted water fund. If the public works project were canceled, state law requires the city to replenish that fund for all project costs, including design work, environmental studies and the land purchase itself.

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As delays mounted, those project costs have ballooned over the years to $16.7 million — a total that the East Phillips Neighborhood Institute couldn’t pay, and that the city couldn’t easily write off.

The breakthrough

Enter: state lawmakers. In legislative deals getting finalized this week, the state’s $2.6 billion bonding bill will include $4.5 million to cover pre-construction costs for a new “water distribution facility” in Minneapolis — a public works project that would replace the city’s plans for the Roof Depot site.

The money addresses a key concern for Minneapolis Mayor Jacob Frey, who had vetoed previous efforts to halt the city’s plans for the Roof Depot site because urban farm supporters offered no plan for repaying the $16.7 million obligation to the water fund.

“The City’s goal since the start of this process has been to build a facility that allows us to continue to provide clean water to the people of Minneapolis,” Frey said in a statement. “This agreement would move us closer to that goal, address community wishes, and avoid double charging Minneapolis property taxpayers.

Another $2 million in the Legislature’s tax bill would cover “holding costs” for the Roof Depot campus — a payment that Dovolis described as “earnest money” for the city to set the land aside for urban farm supporters to purchase.

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As part of the deal brokered in the Legislature, city officials have agreed to sell the land to the East Phillips Neighborhood Institute for $3.7 million — if the group can raise the funds by Sept. 8. Dovolis said two investors have already stepped forward to lead the fundraising effort: Abdirahman Kahin — the owner of AfroDeli who was recently honored at the White House — and real estate entrepreneur Diraneh Robleh.

If urban farm supporters can raise this sum, the Minneapolis delegation of state lawmakers have promised to come through with the remaining $5.7 million necessary to fully replenish the water fund.

In negotiations, Dovolis said the legislative delegation was united: “They held very tight in saying, ‘Don’t take care of East Phillips, we won’t take care of you (City of Minneapolis).’”

The vision

Even before this agreement was announced, buoyed by meetings with city officials and state lawmakers, urban farm supporters were starting to talk about the project as though it was actually going to happen.

At a press conference earlier this month, an architect promised a fresh set of design plans soon for the retail and residential development that would surround the urban farm. The founder of an aquaponics company discussed plans for the farm itself, which would raise a combination of fish and plants in a system that doesn’t need soil — a crucial detail, because the soil underneath the Roof Depot building remains contaminated with arsenic.

Supporters even proposed language for an agreement with the city that would untangle the last several years of conflict, with ideas for resolving questions about the building’s condition — supporters want to see the latest inspection reports and a third-party real estate appraisal — and for wrapping up an ongoing lawsuit.  City officials haven’t weighed in on the proposal, which would need City Council and mayoral approval.

An urban farm “would address public health needs and build community resilience through food, jobs, training, economic opportunities in solar energy, affordable housing and so much more,” said Cassandra Holmes, an East Phillips Neighborhood Institute board member and resident of Little Earth, the Native-preference public housing complex mere blocks from the Roof Depot site.

Early in the legislative session, the urban farm supporters had asked lawmakers to come through with a grant of at least $20 million to a nonprofit organization that would’ve facilitated this property purchase. In March, Minnesota House Republicans questioned the wisdom of granting that much money to a neighborhood organization that, tax filings show, had never handled any comparable sum before.

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“This proposal was nowhere near feasible,” Farmington Republican Pat Garofalo said on the House floor in March, “nowhere near justified, nowhere near allowed for public expenditure of funds from a tracking standpoint or a nonprofit standpoint. There is no business plan,” at that time, for the grant that was proposed.

Dovolis said the neighborhood nonprofit’s board is qualified to handle the amounts of money that will be necessary to complete this deal — and that their ability to organize a winning advocacy campaign and outflank City Hall stands as its own response to critics.

“This is super familiar territory,” said Dovolis, an architect by profession. “It’s not daunting at all. It’s hard work, but it’s not a mystery.”