Elmwood Neighborhood

Pawn Shop Updates (Sun Sailor)

Sun Sailor Article - 2007-10-12 - Elmwood residents protest pawn

A deal to establish a Pawn America shop on Excelsior Boulevard received so much neighborhood attention that the St. Louis Park City Council is poised to temporarily ban all new pawn stores.

Pawn America has long sought to locate a store in St. Louis Park but has been stymied by city regulations that set a limit of three and later two pawnshops in the city, said the business's attorney, Todd Phelps. However, the city currently has just one pawn shop, so Pawn America entered into a $1.7 million deal to purchase the Trestman Music store at 5600 Excelsior Blvd.

However, a number of neighbors who heard of the deal said at an Oct. 1 council meeting that they became alarmed at the prospect of a pawn shop in the Elmwood neighborhood. The City Council, after hearing a lengthy debate on the topic, unanimously approved the first reading of a moratorium on new pawnshops in the city. The move, if finalized, would ban new pawnshops for nine months while the council studied possible changes to city policy regarding pawnshops.


The council was scheduled to consider finalizing the moratorium during a special council meeting Oct. 8. The results of that meeting were not available by the time this edition of the Sun-Sailor went to press.

Phelps said that if the moratorium goes into effect, Pawn America will "simply have no other choice" but to sue.

"We're asking you to vote against this illegal moratorium and this illegal ordinance," Phelps said.

He argued that the moratorium ordinance would be illegal because it would be specifically aimed at preventing Pawn America from opening in the city. Phelps accused the city of "retroactively changing the rules" at the 11th hour when Pawn America has waived all contingencies and is obligated by contract to purchase Trestman Music.

"This moratorium is aimed squarely at Pawn America," Phelps said. "To claim otherwise is transparent and disingenuous."

Ronald Zamansky, an attorney representing Trestman Music, submitted a letter saying that the moratorium could threaten the owner's property rights.

"Can a buyer rely on the zoning of St. Louis Park?" Zamansky asked at the meeting

Phelps also noted that the building is zoned with a commercial designation in which pawnshops are allowed.

Councilmember C. Paul Carver bristled at Zamansky's letter and Phelps' comments.

"I don't appreciate being threatened, and I feel that's what happened today," Carver said. "I know what a threat is and this sounds like a threat to me."

Council members said the moratorium would apply citywide and would be intended to study city policy, not just one store.

Councilmember John Basill noted that the city has not yet granted Pawn America a license.

"Is it your common practice to do all those steps before you get a license?" he asked about the Pawn America contract. "I think it's usually the prudent thing to get your license before you do those things."

Pawnshops are not alone in coming under city scrutiny, Councilmember Phil Finkelstein pointed out. The city has discussed limitations relating to the location and hours of liquor stores in the past year as well.

While Finkelstein said he likes Pawn America's stores, he said a moratorium is a good idea because the city is "in a renaissance."


"This issue is bigger than Pawn America," Finkelstein said. "I think this is appropriate. We haven't made up our mind entirely. We're entitled to study this and we need to do it."

A pawnshop is not right for the Elmwood community, said Brad Benson, a 10-year resident and a board member of the Elmwood Neighborhood Association. He pointed to improvements made along Excelsior Boulevard on the east side of Highway 100, but said the city needs to make a commitment to improve his side of the highway.

"Now we're looking at possibly putting in a pawnshop right as you're greeted coming across that beautiful new bridge," he said.

Resident Darryl Eastburg echoed those views, saying that a pawnshop in the area could hurt his property values.

"Why can't I have what's on the other side of Excelsior [Boulevard]?" he said. "The perception of a pawn shop is the perception of a pawn shop."

However St. Louis Park resident and Pawn America employee Dustin Adams countered that some people have a negative perception about lawyers but they provide an important service.

"I think it'd be a shame to say no to a service ... only because of a perception," he said.

Many people pawn possessions in order to get enough money to pay for gas or lunch money for children, said fellow resident and Pawn America employee Linda Levitan.

"Yes, we make a profit," she said. "Everybody knows it, but we're also helping the residents and I'd like to see us continue to help them."

Another resident said he would like to have a Pawn America in the city because he likes to keep his money in St. Louis Park. The company's stores are clean and aimed at being family-friendly, he said. The city needs to look at both sides.

A moratorium will allow the city to do just that, said Mayor Jeff Jacobs.

"You had valid concerns - both parties did that," Jacobs said. "We need to think about this a little bit until we decide where we're going."

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Sun Sailor Article - 2007-10-20 - Pawn America sues SLP

A Hennepin County District judge last week refused to order St. Louis Park to grant Pawn America a license for a shop in that city, but the business is not giving up.

At an Oct. 8 hearing that preceded a City Council meeting to finalize a nine-month moratorium on pawnshops in St. Louis Park, Judge Denise Reilly refused Pawn America's request.

She did not issue a written ruling and provided little commentary regarding her decision, City Attorney Tom Scott said.
"She just felt there wasn't a basis for ordering us to approve the license," Scott said.

Reilly had issued an order Oct. 4 stating that the city needed to issue the license or explain its reasoning during the Oct. 8 hearing.

Two days after the initial hearing in which Reilly sided with the city, Pawn America filed an amended 26-page lawsuit that seeks, among other things, a temporary restraining order preventing the city from enforcing its moratorium.

Reilly scheduled a hearing Oct. 15 to hear arguments. The results of that hearing were not available when this edition went to press.

The St. Louis Park City Council unanimously approved the first of two votes on the moratorium Oct. 1 after hearing from numerous neighbors who had concerns about a pawn shop in their area. Pawn America has sought to purchase the Trestman Music Center at 5600 Excelsior Blvd.

Specifically, neighbors claimed that a pawnshop would detract from their neighborhood's appearance, would bring additional traffic to their Elmwood neighborhood and could potentially lower property values.

A few St. Louis Park residents, two of whom work for Pawn America, spoke in favor of the business at the council meeting, saying that Pawn America stores provide a valuable service, are clean and have steps in place to prevent the pawning of stolen merchandise.

"They're basing it on the perception of a seedy old pawnshop whereas Pawn America is kind of a different animal," said Michael Deering, a spokesman for Pawn America. "[Chief Manager Brad Rixmann] has worked very hard to make that a respectable entity and mainstream type of store."

Pawn America even made a comic book featuring Rixmann as a character stating that the store does not purchase stolen goods and those trying to sell stolen goods at the store will be caught, Deering said. Every transaction that goes through a Pawn America is recorded, including a description of the seller, and made available to police.

This is the first time Pawn America has sued a city following resistance to the business, Deering said. Pawn America has 14 stores in Minnesota and one in Sioux Falls, S.D.

Pawn America's lawsuit states that the city does not have a valid excuse to refuse to issue a pawnbroker license and land-use registration. The property being purchased is located within a commercially zoned area in which pawn stores are permitted.

The lawsuit claims that Ann Boettcher, the administrative supervisor in the city's department of inspections, stated in a July voicemail, "If there was a fear that you wouldn't get the license, you shouldn't have that fear. You are all set to go."

Furthermore, the lawsuit states that she said in an e-mail that "the paperwork is in order and the license will be issued as soon as the store is ready for business."

The lawsuit also took issue with a City Council resolution Oct. 1 that directed city staff to prevent processing applications for a pawn broker license - of which Pawn America's was the sole application - even though the moratorium had not yet been finalized and will not go into effect until near the end of the month.

The lawsuit sites a 1973 case in which the city of Bloomington was ordered to issue a permit because the applicant had met all standards in an ordinance, thus giving the council no discretion in denying the permit.

The lawsuit claims that the moratorium "was developed in direct response to, and is specifically targeted at, Pawn America's plan to operate at the property."

For example, the only business that could be affected by the moratorium is Pawn America, it states, because the business is the only one seeking the only available pawnbroker license in the city. The staff report relating to the moratorium also specifically reference Pawn America but no other businesses, the suit notes.

"A moratorium that is enacted to prevent a single project is, as a matter of law, arbitrary and capricious," the lawsuit asserts. "As a matter of law, neighborhood opposition is an improper basis for any government action that denies or prevents approval to which an applicant would otherwise be entitled."

The document requests a ruling that would prohibit the city from enforcing the moratorium both temporarily and permanently. The lawsuit seeks an award or all Pawn America expenses in bringing the action and any further relief as the court deems proper.

The staff report, though, states that the city needs to study the issue of pawnshops because land use in the city has changed substantially since the last comprehensive zoning ordinance adopted in the early 1990s. Likewise, it states, pawnshops themselves and other businesses being conducted in conjunction with pawnshops have changed.

The staff report stated that the city staff has not yet determined whether the site at 5600 Excelsior Blvd. met all the requirement of the zoning ordinance for a pawnshop use. While the city confirmed to Pawn America that pawnshops are an allowed use in a commercial area, the city also informed Pawn America that a "Registration of Land Use" application would be necessary. The city did not receive this application until Sept. 28 and the Oct. 8 report states, "All the necessary information for review has not yet been submitted by the applicant."

Scott said he plans to file a response to the lawsuit on behalf of the city but did not have it available by press time.

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Sun Sailor Article - 2007-11-06-Judge allows pawnshop moratorium

A St. Louis Park moratorium on pawnshops can go forward after a Hennepin County District Court judge refused last week to block it.

After Judge Denise Reilly denied a Pawn America initial request to require the city of St. Louis Park to grant it a license for a shop Oct. 8, Pawn America filed an amended lawsuit two days later seeking, among other things, a temporary restraining order preventing the city from enforcing its moratorium.

Reilly denied the request for the temporary restraining order Oct. 22 after an Oct. 16 hearing on the matter. Shestated in a 15-page ruling that Pawn America does not have a "vested right" in obtaining a pawnbroker license on a purchased site and does not face irreparable harm from the city's move. If harmed financially, the company has the opportunity to seek financial damages, but Reilly indicated skepticism that the company's lawsuit would succeed.



Pawn America argued that the city of St. Louis Park should be required to grant a pawnbroker license, in part, because the company has spent $100,000 on the property so far in its $1.3 million purchase agreement to acquire the Trestman Music Center at 5600 Excelsior Blvd.

Additionally the company stated that the administrative supervisor in the city's Department of Inspections had stated that a pawnbroker's license would be issued.

However, Reilly pointed to a past decision that stated that a city's preliminary approval nor a determination that the plan would be consistent with land-use rules creates a vested right. A developer must have progressed significantly with physical aspects of a project or made a binding commitment to develop the property in order to have a vested right. Reilly pointed to precedents coming to the same conclusion for companies that had spent more than $100,000 and more than $250,000 on properties.

Temporary restraining orders, Reilly added, should be issued in order to prevent an injury that money alone could not suffice.

However, she went on to state, "It is unclear to this Court that Pawn America has established a likelihood of success on the merits."

She provided a number of reasons for this conclusion. For one, the Minnesota Legislature has granted cities broad discretion to plan the use of land within their boundaries and to adopt interim ordinances. St. Louis Park adopted an interim ordinance Oct. 8 that stalled the processing of any pawnshop applications, of which Pawn America had the only one, until a moratorium went into effect Oct. 26.

Precedent has also allowed cities a wide degree of latitude in making zoning decisions. Reilly wrote that courts generally do not interfere with such decisions as long as they show a substantial relation to a legitimate public interest. Minnesota statute allows moratoriums of up to a year while a city studies an issue, and moratoriums have been judicially upheld. The St. Louis Park moratorium would last nine months.

Pawn America also argued that the city unfairly targeted the company.

However, Reilly states, "A municipality's zoning decision is not arbitrary or capricious when at least one of the rationales for the decision is reasonably related to the promotion of the public health, safety, or general welfare of the community." The city has stated that it has never conducted a zoning study related to pawnshops.

Pawn America bears the burden of showing the city acted in bad faith or in a discriminatory manner, Reilly wrote.

She pointed to a precedent that states that preserving the status quo while studying comprehensive zoning plans constitutes good faith.

The St. Louis Park City Council is arguably initiating a legitimate planning study, she states, unlike a case Pawn America pointed to that concluded that ordinances retroactively applied or enacted to delay or prevent a single project are arbitrary and could not be enforced.

"Pawn America has not adequately demonstrated to the Court a reasonable probability of success at trial," Reilly wrote.

Public policy concerns weigh heavily in allowing cities to regulate land use and development and does not favor the issuance of a temporary restraining order, she added.

Pawn America would have a limited chance of getting an injunction on appeal. Decisions on granting temporary injunctions are left to the discretion of the district court and will not be overturned unless an appeals court finds a clear abuse of that discretion, Reilly notes early on in her decision.

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Pawn shop article links in Sun Sailor

Sun Sailor Article - 2007-10-12 - Elmwood residents protest pawn
Sun Sailor Article - 2007-10-20 - Pawn America sues SLP
Sun Sailor Article - 2007-11-06-Judge allows pawnshop moratorium
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