Somali business entrepreneurs say Karmel Mall is the best bet for success, but city officials are wary of mall's management practices
When Zak Ismail decided to start his own business making traditional African seating in Minneapolis last spring, he didn't shop around for spaces.
Ismail, who immigrated to the U.S. from Somalia in 1998, looked at one location only and signed a lease with no hesitation. He's not sure what the size of his shop is and he might have been able to find a cheaper space somewhere else, but he's not bothered.
“Sometimes you have no choice,” he said. “You have to go where the customers are.”
Ismail's customers are at Karmel Mall, a thriving Somali marketplace consisting of 160 businesses on the 2900 block of Pillsbury Avenue. The gated complex is the heart of the city's growing Somali community and the place many immigrants feel they have to be to start a successful business.
City Councilmember Robert Lilligren (6th Ward) and members of the Minneapolis Police Department have been working with Karmel's tenants association to make sure Somali business owners - who often know little about U.S. business and leasing practices - don't become vulnerable to mistreatment from their landlord, something about which some Somalis have complained. Most business owners in Karmel, though, said they have no gripes about their working situations and are happy to be in a mall that reminds them of home.
Catering to the community
A well-dressed Somali man stopped into Abyan Gutale's travel agency in Karmel on a recent Friday afternoon to ask about his upcoming business flight to New York. Gutale answered his questions in swift Somali and finished the conversation with an English “wonderful.”
Gutale's business, located in a small office she shares with a drivers training company, is plenty busy. She spends her time finding and booking flights for Somalis, many of whom want to visit relatives at home or elsewhere. She said her business would not survive without the Somali community and for a while, it didn't.
She first tried to open her business a couple years ago outside the mall at a nearby location on Lake Street, but she had to close after three months.
“Nobody knows you,” said Gutale, a well-educated woman who has been in the U.S. since 1992 and speaks fluent English.
She came to Karmel to build a customer base and hopes to eventually expand her agency outside the mall so she can serve a larger, more diverse clientele. She said the drivers education business is looking to do the same.
Gutale splits a monthly rent of $1,100 for the space her business occupies. She said rent is generally a bit more expensive in Karmel than elsewhere, but the foot traffic makes the cost worth it.
Abdi Farah, a 21-year-old who sells cell phones and phone accessories from a tiny nook down the hall from Gutale, said he has no trouble paying $450 a month in rent and supporting his mother and four brothers. He has no intention of moving his store outside Karmel.
Farah was able to take out a bank loan to start his business, but many Somalis are unable to secure such loans because of the complex process and requirements. It is also against their religion to take out loans requiring payment of interest.
Shukri Adam, a former Karmel business owner who helped found the tenants association, said many Somalis rely on relatives or community members to give them enough money to launch a business. Adam received money for the clothing business she used to own in Karmel through the Minneapolis Consortium of Community Developers, but said the process is too tedious for most immigrants.
“Most people don't speak English as well as I do,” Adam said. “The process is difficult enough for people who speak English.”
Sabri Properties, the management company for Karmel, does offer reduced rent to help new and struggling businesses. Adam said starting is hard, but some Somalis are beginning to open businesses outside Karmel. She opened a healthcare agency on Nicollet within the last year to cater to a larger pool of customers.
She said many Somalis, though, see Karmel as the prime location for business in Minneapolis and little will draw them away.
“Even if you have a cheaper store that's twice the size on Lake Street, it doesn't matter,” she said. “That's not where the community is.”
Seeking fair treatment
Because many Somali business owners won't go anywhere but Karmel, some police staff and one city councilmember are concerned that the complex's management company might take advantage of tenants' lack of business and property knowledge, charging too much for rent and treating immigrants unfairly.
Minneapolis Police Department Lt. Marie Przynski said she received complaints several months ago from Karmel tenants who thought they were being charged too much for rent and mistreated by management.
After hearing the complaints, one that involved the unnecessary unplugging of a tenant's electric devices, Przynski went to the mall to pass out DVDs that explained in the Somali language how to get a business license and other business basics. During a recent trip to the building, she was met with an angry and suspicious manager, Azmieh Obeid. One business owner, in the presence of Obeid, tore up business cards Przynski handed out.
Przynski viewed Obeid's presence as an attempt to thwart honest conversation among tenants and said she is confident some business owners are being treated unfairly and possibly unknowingly.
“I truly believe the Sabris are intimidating the Somali community and taking advantage of their lack of knowledge about business operations,” Przynski said.
Przynski isn't the only person who is concerned. Councilmember Lilligren said he has received several complaints from tenants who said they were mistreated.
He said he and police staff have been meeting regularly with the tenants association to address concerns, but there is little else he can do to improve the relationship between the landlord and renters.
A recent meeting, during which parking was the main topic, was productive until Obeid arrived and “obstructed” conversation, Lilligren said.
“The landlord has been good at making the city the bad guy,” he said.
For the purpose of protecting businesses, Lilligren declined to make names of upset tenants available. Przynski did not disclose tenant names either.
General Manager Rochelle Barrett, who is overseeing Sabri Properties while her husband, Basim Sabri, finishes a three-year prison term for bribing a Minneapolis city councilmember, said the company has been open to working with the city and police. She and Obeid, Sabri's sister, acknowledged that they didn't have a good relationship with Przynski, but noted they have worked well with other officers.
Barrett said her husband's company does not take advantage of immigrants, but does a lot to help them start their first U.S. businesses and be successful. She said allegation of mistreatment is nothing more than rumor.
“If these people are so oppressed, why are they staying?” she said.
Barrett said rent at Karmel ranges from less than $2 per square foot to more than $4 per square foot depending on the business type and location in the mall. Utilities are an additional cost. Most tenants, such as Mohamed Abdullah who said he pays $1,800 for 400 square feet, foot the bill with no questions asked. Barret said Abdullah's space is closer to 500 square feet.
She said Sabri Properties provides some accommodations not offered elsewhere. A 3,000-square-foot mosque is available for all tenants - most who pray five times a day - at no cost, she said.
“But at the same time, we're running a business, and we have to bill accordingly to pay our expenses,” Barrett said.
Many tenants at Karmel sign month-to-month leases. Hussein Samatar, director of the African Development Center (ADC) in Minneapolis, said his organization provides seed money for budding immigrant businesses, but the month-to-month leases have caused problems because ADC cannot be guaranteed of a business's longevity. If a tenant signs a short-term lease before going to the ADC, which has happened multiple times, there is little the organization can do to help.
“Leases are definitely not written in a way that favors tenants,” Samatar said.
Most of the tenants in Karmel Square said they get along fine with Sabri Properties. Abdullahi Hassan, a member of the business association and a business owner in Karmel, said the relationship is “stormy at times,” but it helps that Sabri Properties is Somali oriented.
A familiar place
Ismail learned to make traditional African seats from his uncle and used to do it as a hobby. After several years of substitute teaching in Minneapolis, he decided to make fashioning seats and the occasional curtain his career.
He works every day of the week, often more than 10 hours a day, cutting foam and stitching colorful, exotic fabric by himself. He pays $1,400 a month plus utilities for his shop, which he guesses might be around 700 square feet. His earnings support himself and help out family members still living in Somalia.
The work is tough, but when Ismail looks out his window, he smiles and is reminded of home.
“I'm not sure what else might be out there,” he said. “But here probably 90 percent of my customers are immigrants. This is the only place they know.”