Minneapolis, St. Paul face new obstacle after riots: Sky-high demolition costs

Insurance policies often cap demolition reimbursement at $25,000 to $50,000, which doesn't come close to the actual cost of doing the job

Months after Minneapolis and St. Paul sustained millions of dollars in property damage during protests and riots demanding justice for George Floyd, the Twin Cities have been dealt another financial blow: the skyrocketing cost of demolition.

Continue Reading Below

Days after George Floyd, a 46-year-old Black man, died after a white Minneapolis police officer pressed his knee onto his neck for at least eight minutes, rioters tore through Minneapolis and St. Paul, causing millions of dollars in damage to more than 1,500 locations.

Vandals smashed doors and windows; ransacked goods from pharmacies, groceries and liquor stores; covered hundreds of boarded-up businesses with graffiti; and set fire to nearly 150 buildings.

KENOSHA MAN HAS MESSAGE FOR RIOTERS WHO BURNED DOWN HIS FAMILY STORE

But insurance policies often cap demolition reimbursement at $25,000 to $50,000, according to the Minneapolis Star Tribune -- which, for dozens of businesses, doesn't come close to the actual costs of doing the job.

Some local businesses reported getting bids for $200,000 to $300,000; in some cases, the demolition cost is almost the same as the actual value of the property.

Contractors told the Tribune that prices for riot-related work are far higher than usual, but maintained it's because of government regulations that require them to treat all debris from a burned-out building as hazardous.

“We aren’t taking advantage of anybody,” said Don Rachel, CEO of Rachel Contracting, one of the largest demolition contractors in the state. “Some people might have sticker shock, but how do they know? Most of these folks have never had to wreck a building.”

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Some have called for the local government to help with a public-bid project. St. Paul officials helped coordinate cleanup of the Sports Dome site for about $140,000, after some companies offered to do the same work for as much as $285,000.

“I think that is price-gouging and they should contact the attorney general,” said Andrea Jenkins, vice president of the Minneapolis City Council. “That is a symbol of capitalism run amok.”

The expensive price tag of demolition has caused rebuilding projects to stall out, leaving sections of Minneapolis and St. Paul still ravaged by the looting.

Legislators have proposed creating a $300 million rebuilding fund to cover uninsured losses from the riots; however, the bill has stalled out in the state's Republican-controlled Senate, which opposes requiring the state to pay for the damage.

CLICK HERE TO READ MORE ON FOX BUSINESS