Late ’80s Southern rock pulses through the sound system at the early ’80s Loon Cafe during a thinly patronized winter lunch hour. Developer Ken Sherman passes an iPhone across a table: “Don’t take my word for it,” he says. “See for yourself.”

The security video is from 11 p.m. Nov. 27, in the vestibule of the Buzz Mart convenience store, opposite the Warehouse District LRT station and a stone’s throw from the Loon. Two young men enter. Seemingly without provocation one coldcocks the other, who drops to the ground and out of view. Despite the victim’s incapacitation, the assailant continues to rain blows and kick the man in the head. Patrons enter, see what’s happening, and leave. Eventually a group of men pull the assailant away. The video ends.

“It was a straight-up murder,” says Sherman, a longtime Warehouse District developer and owner of the Lumber Exchange Building.

After distributing security footage on social media, police received a tip that brought them to the Downtown Library, where they found the man, his hand bandaged, covered in the victim’s blood.

“I pay a million dollars [a year] in taxes down here,” Sherman notes. “It’s not getting us safe streets.”

A Tarnished Jewel

The Minneapolis Warehouse District is arguably downtown’s most dynamic neighborhood, having lived four distinct eras since 1980. Once regarded as downtown’s jewel, resembling New York’s SoHo in its collection of heritage buildings, galleries and sophisticated restaurants, it is now downtown’s sin district, home to a collection of sex businesses, bars and nightclubs. It is also downtown’s transit hub at Fifth Street and Hennepin. Perhaps not coincidentally, that’s the intersection that the Minneapolis Police designate as the epicenter of downtown crime, including several nearby daylight shootings where bystanders were hit by bullets.

“Policing has been an issue in the Warehouse District for as long as I can remember,” says former Minneapolis City Council President Jackie Cherryhomes, who represented the Warehouse District from 1990 to 2002. “But I feel like things have changed. [Part of the cause is] the push-pull of liberal politics, but also a lack of ownership of downtown by the city’s political establishment.”

The common refrain is one of indifference to the needs of residents and businesses. “I have begged the city for help,” says Loon Cafe owner Tim Mahoney.

“People who are not downtown at night don’t get the extent of the problem,” says City Councilmember Lisa Goodman, whose 7th Ward once included the Warehouse District. “There is some denial about the reality unless you have seen or experienced it yourself.”

Still, the Warehouse District is also a thriving white-collar creative hub, home to thousands of jobs and dozens of businesses that drive high occupancy in its historic buildings. But those businesses have begun to voice concern at what they see as an inexorable trend. The sense is of a neighborhood at a tipping point, if not past it.

“You have a group of socially progressive businesses here,” says Fred Haberman, co-founder and CEO of creative agency Haberman, which has officed in the Warehouse District for 20 years. “But we’re concerned. We’ve had incidents with employees. We’ve added two secure doors. We advise people to walk to the parking ramps in groups. We are all wanting more policing of bad behavior. And when employees are accosted, you want more vigilance.”

Haberman and other business owners say the neighborhood hasn’t felt safe for three to five years. Haberman’s concerns were not addressed during the Hodges administration, he says. “You’re going to have brain drain,” he says. “I have [employees] asking should we leave [after our lease is up]. We’re not alone.”

The area’s arts stalwarts are equally unnerved. Artspace owns Hennepin Center for the Arts and manages the Cowles Center for Dance next to the transit hub. “We’re still 100 percent occupied,” says President Kelley Lindquist, “but the artists feel threatened and hassled as they come and go each day.

“I’m sorry to say this, because it is our home,” Lindquist continues, “but I don’t feel any sense of fun or positive activity in the Warehouse District today.”

The question is unavoidable: Who shot the Warehouse District?

Solid Foundations

The Warehouse District goes back to the turn of the 20th century, when the neighborhood blossomed as a commercial hub. “There were a lot of manufacturers and wholesalers,” recalls Lynne Alpert, co-founder of the New French Cafe (1977-2002), the neighborhood’s first modern hospitality business. “It was a center of production of men’s outerwear. There were whole floors devoted to sewing.”

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And it was not fashionable real estate. Alpert recalls a three-story building at Third Street and First Avenue for sale for $40,000 around 1980. “I remember the late 1970s here,” says photographer Larry Marcus, whose studio has been in the Wyman Building since 1984. “It was as close as you could find in the Twin Cities to the 1950s. It wasn’t modern at all. Tons of little businesses in different buildings. The fruit and vegetable wholesalers [later cleared for I-394] looked like the 1930s. It was going back in time.”

Clothing manufacturers dominated because the large floor plates suited their businesses. But in the 1970s, much of that production began to move overseas. “And the businesses that were growing were moving to the suburbs where there was all this new space being built,” Marcus recalls. “Downtown was not popular.”

As the garment trade decamped, “the buildings started to get sectioned,” says Marcus. “The Wyman had businesses that had been here since the 1920s. But the three- to six-person businesses were disappearing.” That exodus enabled him to open a studio.

The Arts Era

“Artists like big, open, cheap space,” Marcus explains. “The warehouse buildings still had the original owners. Buildings were paid for and were unimproved. Rents were very reasonable.

“The neighborhood attracted attention and that attracted other businesses,” he continues. “It blossomed. Downtown was suddenly an interesting place.”

This period, from the late 1970s to the late 1980s, is regarded as the Warehouse District’s bohemian coming-out, but it was transitory. The presence of artists attracted galleries. The galleries attracted patrons, who attracted bars and restaurants like the New French and Cafe Brenda.

“It was a very special time. It was happening,” says restaurateur Brenda Langton (she owns Spoonriver near the Guthrie), who operated Cafe Brenda with husband Tim Kane at First Avenue and Fourth Street from 1986 to 2009. “The area had a magical urban feel. It was authentic and uncontrived.”

“It was a time of incredible creativity,” recalls Lindquist. “There was also a lot of illegal living and squatting, to be honest.”

The idyll was short-lived. “The gallery era was so successful it killed the gallery era,” quips Joanne Kaufman, the recently retired longtime executive director of the Warehouse District Business Association.

“The artists wanted the affluent people around. They were our customers,” says Alpert. “But too many [affluent people] unleashed the forces that changed the neighborhood.”

Larry Marcus witnessed it. “The public’s interest got out of hand. That attracted inspectors. Landlords had to upgrade these dated buildings. Some got sold. Property taxes rose. Rents rose. By the 1990s, the artists started to leave.”

Hoop Dreams

The gallery era may have collapsed under the weight of its own success, but two massive public works projects provided an accelerant.

“Target Center was a gambit to fix Block E, if we are to remember it honestly,” says Alpert. “All [the city fathers] could think about was keeping the riffraff from the Nicollet Mall, when the existential threat was Mall of America. Target Center was the ruination of [the New French]. The city thought the area needed help, but they couldn’t see the forest for the trees.”

“A lot of artists fought Target Center. Many lived and worked on the site,” says Lindquist. “But it was a fait accompli by the time it became public knowledge. I found a city official at the redevelopment agency and explained that these artists were small businesses. The city funded their relocation. They all left the Warehouse District.”

Marcus says the role of I-394 and the ABC ramps should not be discounted. “Target Center fed an era of redevelopment, no doubt,” he says. “It took out a lot of buildings artists used.” That tightened supply, which drove rents higher.

Opinions are mixed on this period, which loosely straddles the 1990s. For those with gauzy memories of the 1980s, the Warehouse District became crass and full of suburbanites in search of late-night happy hours. “Our customers didn’t want to come over on game and event nights,” Alpert says, noting that a restaurant can’t lose 40 to 50 nights a year and thrive.

For others, like Ken Sherman, the changes gave the Warehouse District visibility, which created the economic critical mass that fed the redevelopment of the entire district. “Target Center and the ramps drove the second era,” he says. “The ramps provided parking for offices. The arena gave legitimacy to the neighborhood.”

But the effect was not subtle, and the changes came fast. “The mix of expectations changed,” says Brent Erickson, a longtime commercial real estate broker in downtown and senior managing director for Newmark Knight Frank’s Minneapolis office. “The buildings were renovated and attracted a broader range of tenants, who wanted nightclubs and bars.”

The Nightclub Era

Nothing is more puzzling to Warehouse District veterans than the neighborhood’s third evolution, as the 21st century dawned, into an edgy nightclub district.

At first it seemed an almost logical extension, as the thriving First Avenue and Target Center changed the downtown mix at night. “Athletics changed the dynamic,” says Cherryhomes, “but the nightclubs were an unmet need.” The fuse was probably lit by Prince’s Glam Slam, which operated on Fifth Street from 1989 to 2006.

It’s important to note that throughout the late 20th century, Minneapolis worked to evacuate sex businesses and clubs from the city’s commercial districts near residential neighborhoods. Downtown is now one of the only areas zoned for them, and the nightclubs have specifically gravitated to the Warehouse District, though Cherryhomes says the goal was not to turn it into a version of Chicago’s Rush Street but to protect the neighborhoods.

That well-meaning act drove an array of unanticipated consequences. “At the time I don’t think people foresaw downtown having so many residents,” says Tom Hoch, founder and longtime CEO of the Hennepin Theatre Trust. (The Warehouse District, notably, has fewer than 500 residents.)

Area businesses would have been satisfied with a copy of Rush Street’s “Viagra Triangle,” middle-aged and older men in search of a party atmosphere, but instead they got something grimmer. Nightclubs attracted customers who were affiliated with criminal gangs, whose rivalries played out on the streets outside the clubs.

“We were shocked at how the neighborhood began to change,” says Langton. “It became clear that many of our customers stopped coming downtown. Business started to drop off. The violence was scaring people.” Langton says many of her regulars lived in the city and were not naive suburbanites uncomfortable with the city vibe. They voted with their patronage and she made the decision to open a new restaurant by the Guthrie Theater and later closed Cafe Brenda.

“Look, shit has to change. It doesn’t stay the same,” Larry Marcus says matter-of-factly. “The hospitality industry is preoccupied with new and hot. Sports drove late-night business, and that activity started to attract gangs. The city was denying it. There were many shootings that never made the paper. They seemed to not want to scare people off.”

The years took their toll. As quality restaurants and galleries left, the neighborhood at street level became a string of party bars and clubs. There is barely any daytime commerce.

“It’s unsavory in the daytime now,” says Marcus. “There are too many collectors of troubled people nearby: the library, the LRT, social service agencies, shelters.”

Market Forces

“There have been people trying to shape and move the Warehouse District for as long as I can remember. But only market forces have driven it.” —R.T. Rybak, Minneapolis mayor 2002-2013

The evolution and devolution of the Warehouse District may have killed street life, but it has had a salutary effect on the solid buildings it’s named for. The bulk of business activity in the neighborhood has always taken place on floors two and above.

“There are two worlds that exist here. In the a.m. and afternoon, it’s very much an agency/creative life force, though the streets aren’t that active, I admit,” says Fred Haberman. “At night it is crowded and a club scene. Younger, kind of a wild vibe.”

According to ex-Warehouse District Business Association Executive Director Joanne Kaufman, the commercial side of the neighborhood is thriving. Most buildings are near 100 percent occupied with professional service providers and agencies, web design firms and tech. Marketing agencies Carmichael Lynch and Colle McVoy are the best-known tenants. Developer and property owner Ned Abdul is the biggest landlord.

For a long time the area was known as a place where rent dollars bought more than other parts of downtown, Kaufman says. But rents are higher than ever in the Warehouse District, according to Sherman, who last year sold the Kickernick Building at First Avenue and Fifth Street to United Properties for $19.25 million. (Sherman is also a partner in Seven steakhouse, The Exchange nightclub and other hospitality businesses.)

Though Butler Square was turned into an architectural showpiece in 1974, evolution of the neighborhood into a white-collar creative hub dates to Butler Square’s second renovation under owner Jim Binger and architect David Shea in 1991, according to Brent Erickson. “It created the template and momentum for the renovation of the neighborhood” in the late 1990s.

He explains that in the gallery era, the warehouse buildings themselves were neither untouched nor modern inside. “They were very dated, with false ceilings, carpeting, fluorescent lighting.”

A wave of renovation followed, led by developers Sherman and Abdul. The area lost its artsy mojo but the buildings retained their appeal and occupancies. Throughout the 1990s the area was a hotbed of small startups. But today, several forces have the Warehouse District on its heels as a business hub.

First, the renovation cycle moves more quickly, and many of the 1990s modernizations look tired and lacking historical integrity. “The Warehouse District has plateaued,” says Erickson, who believes its historic structures are on the brink of another wave of renovations.

The purchase of the Kickernick by United and the sale of two other structures in 2015 to San Francisco’s Spear Street Capital—national players who only invest in up-and-coming areas—are a vote of confidence in the neighborhood, he says.

They are also an indication of the deep pockets it will take to help the neighborhood weather its second challenge, the burgeoning North Loop across Washington Avenue. Erickson believes the North Loop has surpassed the Warehouse District in appeal because renovations are newer.

Yet he doesn’t see the Warehouse District trending residential like the North Loop. “There’s still enough demand for office space in the Warehouse District that there’s no need for residential development. It was a manufacturing hub, and I don’t see that tone changing.”

The third force pressuring the Warehouse District is the omnipresent sense of danger. “We moved [350 employees] from Plymouth [in 2013] because we loved the vibe for young software talent. It melds with their urban lifestyle,” says Tom Goodmanson, CEO of software firm Calabrio, based in the Wyman Building. Goodmanson leads a business working group trying to achieve civic consensus on Warehouse District safety.

But, Goodmanson says, edgy is one thing; crime is another. “It’s gotten very brazen.The daytime shooting in front of Jimmy John’s. Murder in ramp B. Rape in ramp C. … We’re a 24/7 software company. It doesn’t help with recruiting.”

“A lot of why the North Loop has ascended at our expense is this is seen as a dangerous part of the city,” says Sherman.

Unsafe or Unsavory?

A universally acknowledged feature of the Warehouse District is that it is home to an extraordinary collection of people with nowhere to go. During the day, some are homeless, disgorged from shelters that are only open at night. Some are mentally ill (and also homeless). Some are youth with nowhere to go. They collect around the library, LRT station and Hennepin bus stops.

“For the most vulnerable people without resources, they see [the Warehouse District] as a safe place,” says Tanisha Gibson, CEO of Urban Solutions, a consulting company that assisted social service agencies staffing downtown corners last summer and fall.

Gibson understands why most people don’t. “At first I wasn’t comfortable. It’s an intimidating place. What disturbed me most was that people have to deal with very disrespectful behaviors every day. Kindness, respect and courtesy don’t exist on those corners.

“People told me it was no place for me,” Gibson continues. “Well, it’s no place for anyone. I would not be comfortable walking past that library with my 10-year-old.”

Gibson says she was saddened by the complexity and intractability of the trouble on the streets. “Young people out there are so disadvantaged,” she says. “They have nowhere to go. Nothing to do. High school dropouts everywhere. More than half the people have mental health challenges. They should not be [living] on the street.”

Artspace’s Lindquist adds that the area’s homeless are more likely to be victims than perpetrators. “We definitely have to have a sense of compassion and greater understanding for them.”

It is a neighborhood of troubled people, but discerning the troubled from trouble is not simple. Former City Council President Barb Johnson notes: “It’s hard to separate people who seem threatening from those who are threatening.”

Downtown also holds a specific appeal to gang-affiliated youth: “Downtown is a neutral site,” says Leroy West, chief administrative officer of Summit Academy, which worked last year to engage itinerant youth on downtown corners in GED and vocational programs. “If they can’t go to certain neighborhoods, they can go downtown,” he explains.

That’s little solace to the passing parade. “People are threatened and abused. It’s a very dangerous area,” says Lindquist. “It can be brought back, but it requires overcoming enormous negative energy.”

In 2015, the Downtown Improvement District hired the Responsible Hospitality Institute to study the situation. “They concluded we are not unique,” says Downtown Council President and CEO Steve Cramer, “but we have certain physical conditions—the proximity of the transit hub to the nightlife district, narrow sidewalks, how we deal with bar close [by closing the streets]—that are atypical and present challenges.”

‘A Bit of a Standoff’

Though the nightclubs have been the source of the highest-profile crimes, the public safety issues in recent years have not been driven by 2 a.m. shootings, but by a sense of a continuous and variable threat that the criminal justice system is unable or unwilling to rein in.

“I have a sense the police aren’t really interested,” says photographer Marcus. “I don’t know the cops. I don’t see them on the street.”

There is a sense of a criminal justice stand-down. “They are not arresting,” says Kaufman, “and the criminals know that, and their behavior has gotten more brazen.”

How so? “I’d watch video of these shootings,” says Cramer. “Police were on the scene, but the perpetrators used firearms anyway. There is a lack of fear of police.”

There is also a knowledge that police are vulnerable, due both to some high-profile excesses and the national political climate. “People come with cellphones and try to provoke the cops and then film it,” says Johnson.

Cramer says the thesis of a stand-down is a misinterpretation. “I don’t think there is a political effort to have that,” he says. “But the climate where they are operating is unforgiving.”

“It shadows the overall national tensions between police enforcing order and individual rights,” says Haberman. “It’s a bit of a standoff.”

The irony is that the MPD moved its First Precinct station into the Warehouse District in 2002. Minneapolis Police Chief Medaria Arradondo ran the downtown precinct from 2013-15 and emphatically rejects the idea of a stand-down. “I want to stress that there are plenty of laws to give our officers capacity to address crime.

“But a lot of it is not criminal conduct,” he continues. “It’s a lack of civility and respect. That isn’t illegal. It’s not a police matter. Of course I understand that the workers and residents down there have to put up with it. But we were being hit with lawsuits that our policing was unconstitutional. Quick fixes [to deter civility offenses] hurt our community relations.

“The [county] jail is at capacity,” he notes. “It’s not like we’re not arresting.”

Courts of Injustice?

In addition to no longer criminalizing incivility, the Hennepin County court system is no longer incarcerating low-level offenders, people who singularly or habitually violate one of 250 laws the Minnesota Supreme Court terms “payable” offenses, namely misdemeanors that can be addressed with a citation or ticket.

“In 2016, our chief judge issued a standing order on payable offenses,” explains Fourth Judicial District Assistant Chief Judge Toddrick Barnette. “It involves not holding people at the jail for payable matters. Police have the authority to arrest, but we aren’t holding them.”

Barnette is quick to note, however, that “drug sales, thefts, weapons charges—they are not payable offenses. Police have authority to take them off the streets.”

The policy has a practical and aspirational side. “The jail has 33,000 admissions a year, at $132 a day in cost to taxpayers. And low-level offenders were mostly released in one to two days,” says Barnette. “We’re no longer keeping the trespasser or the open-bottle offender in jail. We’re keeping chronic offenders, bench warrants. The order was prompted because there was a lot of racial disparity in these low-level offenses. African-Americans represented 12 percent of the population and 53 percent of the police bookings.”

Also of note: 52 percent of the people in Hennepin County jail are suffering from chronic mental illness, says Arradondo.

R.T. Rybak, now president and CEO of the Minneapolis Foundation, is well aware of the effects of racial disparities in the city, but he says he is concerned about replacing one injustice with another. “Overincarceration should not be confused with people’s right to a safe environment.”

Barnette emphasizes his empathy for those repeatedly exposed to aggressive incivility. “Do I want to walk down Hennepin Avenue and have someone say something to my wife? No,” he says. “But that’s not a crime. We’ve got to find other solutions than the jail for these people.”

Political Indifference

If solutions for the Warehouse District lie outside the criminal justice realm, the effort to involve social service agencies last summer did not motivate many people to choose alternatives. Summit Academy’s West reports that of nearly 1,000 contacts Summit made downtown last year, only 16 individuals have come to an info session for a GED or vocational program so far. (Street recruiting is not its typical focus.) West says the organization’s conversion rate is typically close to 25 percent, but that can take a year or more.

Motivation may be lacking. “Minnesota gives you everything,” says Gibson, “food, housing, medical. These kids are not as moved to change their situations.”

“It simply hasn’t been a priority for city leadership,” affirms Tom Hoch, who notes that downtown provides 38 percent of the city’s tax base.

The sense of downtown as a driver of much of the city’s economic prosperity is lost on much of the council, particularly those with only one or two terms under their belt. “Downtown is a regional engine. When I was on the council I didn’t get regional issues,” explains Cherryhomes. “I’m hopeful [that] the longer people hold office, [the more] they will understand.”

Solutions and Risks

Viable solutions for the Warehouse District require what many regard as the biggest Hail Mary of all—filling deserted streetscapes with enough people to overwhelm the impact of the bad actors.

To get there, the Warehouse District needs critical mass. Hoch, who successfully activated parts of Hennepin Avenue that had been derelict for years, has the most specific advice. He would like to see the city dust off the Hennepin Cultural District Plan that was endorsed by the City Council in 2013 but never embraced by the city. “You have to get people downtown earlier in the evening. It has worked in Pittsburgh, San Francisco, Chicago. We have to make sure downtown engages people in activity, reasons to be there. Programming activates the streets, and there is safety in numbers.”

“The greatest opportunity Jacob [Frey] has is to make the Warehouse District and downtown safe for suburban people to enjoy again,” says Ken Sherman.

Others would prefer to see limits on nightclubs. “Ten in two blocks is too many,” says the Loon’s Mahoney. (We count four nightclubs, but add party bars and it’s roughly 10.)

Nightclub owner Sherman disagrees: “The idea that it’s bad to have fun and listen to music is one of the dumbest things I’ve heard in my life. In Chicago there are not these issues on Rush Street. What downtown doesn’t have an entertainment district? Should we close all the theaters? Crime follows people with money; that’s why you have police.”

Rybak is a proponent of nightclubs as well. “We should be thrilled we have nightlife in Minneapolis,” he says. “I remember when it was a ghost town; all the entertainment was on the 494 strip.”

Rybak even defends all-ages shows, which are the subject of vehement criticism by many in the Warehouse District as magnets for gang activity. “Underage shows are how you build a music scene,” he says. “First Avenue’s underage shows don’t generate problems.”

Arradondo says the police department is changing its approach to downtown. He acknowledges that cops on horseback and barricaded streets—the militarized policing typical of Warehouse District bar closing time—were detrimental to community relations. “Policing downtown until a few years ago was strictly as a nightlife district,” the chief continues. “But downtown has become housing, schools, a social service hub. It took a while for us to catch up and change our strategies.”

Still, it’s not clear that the bulk of people who drive downtown’s economy and business community are satisfied with those strategies. The question is whether there is a solution that can serve the needs and prerogatives of such varied constituencies.

“The opportunity and challenge are connected to what it means to be everyone’s living room,” says Rybak. “It’s common ground. Right now, with people so divided, we need common spaces with people who are different than us.”

Adam Platt is TCB’s executive editor.