Mayor issues first-ever veto to support Whittier housing/industrial project

The foundation has already been excavated for Karmel Plaza, 2920 Pillsbury Ave. — but what will rise from the block-long ditch remains up in the air.

Developer Basim Sabri originally planned to build a light-industrial complex. After five years of negotiating, he purchased the land from the city in May for $126,000 — then he asked to build 69 condos above the two-story building for Somali residents who populate the Whittier neighborhood area.

The Minneapolis Planning Commission voted to support the plan, as did the City Council’s Zoning and Planning Committee. However, on Sept. 3, the full City Council defeated the plan 7-6; six days later, Mayor R.T. Rybak exercised his veto power for the first time in a show of support for the project.

At least one neighborhood group supports the Council against the mayor and Sabri.

"We were glad that his plan got shot down," said Marion Biehn, neighborhood development manager for the Whittier Alliance. "The neighborhood has a South Whittier Redevelopment Plan (SWRP) in place which was adopted by the City Council that is the master plan for the area. It specifically calls for a development that is consistent with the light-industrial zoning and living-wage job creation."

According to Biehn, the site does not include housing, though other spots in the area do. She said that the Planning Commission and city staff did not know that the SWRP existed. Neither did Councilmember Gary Schiff (9th Ward), who changed his vote when he discovered it.

Sabri said the SWRP was developed 12 years ago and is not legally binding. He said by denying the plan, the Council is stifling Somali home ownership opportunities, and passing on $55,000 in annual property taxes.

"We will still be building light industrial and retail," Sabri said. "The housing is just the frosting on the cake. I think any city councilperson who looks at this project as closely as the mayor did will vote for it."

Rybak sent a letter to City Council President Paul Ostrow (1st Ward) explaining his veto and asking that the Council further discuss the issue.

Rybak said he supports the project for two reasons. First, he thinks the area between the Midtown Greenway and Lake Street offers a rare opportunity to create affordable housing near public transportation.

He also believes that the city needs more home ownership that is affordable to minorities. He believes that is especially important for Islamic residents, whose religion puts limits on traditional interest-based mortgages.

Should the City Council overturn its initial decision and give Sabri permission to build the condos, Sabri will have to renegotiate the land deal, said mayoral aide Erik Takeshita. That’s because Sabri would build 33,000 square feet of industrial space if condos are included, while the original deal required 64,000 square feet of industrial development.

Sabri had an August meeting at the City Assessor’s Office with Schiff, Lisa Goodman (7th Ward) and Whittier’s Councilmember, Dean Zimmermann (6th Ward), when it seemed that he had enough support on the City Council for the reconfigured project. No new price was named, and negotiations are ongoing.

"I am not going to kill this deal over money," said Sabri, a Palestinian immigrant who came to Minnesota in 1979.

"I agreed to renegotiate the price for the sake of moving forward and am willing to pay more."

Sabri is expected to stand trial in November for three counts of bribery involving former 8th Ward Councilmember Brian Herron, stemming from a different development.

Said Rybak, "It is important that we encourage developers no matter who they are. Sabri is controversial, but one of the things that has been historically wrong with development in Minneapolis is that they too often base it on personalities instead of principles."