Former owners fight to take back condemned Seven Corners site in Minneapolis

The former owners of a block of dilapidated buildings in the Seven Corners area of Minneapolis' Cedar-Riverside neighborhood are asking a judge to void a foreclosure sale held last summer, arguing they did not receive proper notification of the proceedings.

The properties, located at the 1400 block of Washington Avenue S., were most recently home to several apartments and businesses, including Bullwinkle's Saloon & Funbar, the Jewel of India restaurant and vintage store Urban Jungle. The city condemned the buildings in the summer of 2023, citing maintenance issues and unpaid utility fees.

The owner at the time, a family-run enterprise dubbed R&P Industries, lost the site in July to lender First Western Bank & Trust, which purchased the properties at a foreclosure sale using the $4.8 million R&P owed it.

Now R&P and its affiliated entities are suing the bank, alleging it did not follow state requirements for notifying the property owners and their tenants of the foreclosure.

Located off Interstate 35W near the University of Minnesota's West Bank campus, the Seven Corners area has been the target of several unrealized redevelopment efforts. The site includes three surface parking lots and the Love Power mural of Jesus that has loomed over the highway for decades.

The current owners, brothers Raj and Jai Singh, acquired the property "in hopes of rebuilding a thriving business base at the Seven Corners after the COVID pandemic while maintaining its cultural diversity and landmark mural," according to the complaint filed this month. Their father, Surinder Singh, has decades-long ties to the site and serves as manager of the property.

Attorneys for both parties did not respond to requests for comment.

The complaint alleges the bank improperly classified the properties as vacant when they still housed furniture, supplies and records, and the parking lots were still operating. It also argues the bank failed to serve the suit at registered offsite addresses for R&P, the property manager and tenants.

R&P is asking the court for a temporary restraining order to prevent the bank from interfering with the property.

In response, an attorney for the bank argued communication from R&P showed they were aware of the foreclosure sale before it happened. Plus, they wrote, occupancy of the property was illegal since it is condemned.

"Plaintiffs seek to close the barn door, but the cows have already left," the response read. "The property at issue in this litigation has gone through the foreclosure sale, and the redemption period has run. Plaintiffs have never attempted to tender payment or halt the sale of the property."

The lawsuit also claims R&P lost $1.5 million in rental income while mired in a regulatory Catch-22: CenterPoint Energy refused to restore utility services for the condemned buildings, and the city would not lift the condemnation until there were working utilities.

R&P filed a complaint with the Minneapolis Ethical Practices Board that remains under investigation, according to court documents. Emails and letters attached as evidence reference alleged collusion between a city building inspection official and "a well-known Minneapolis condemnation property purchaser."

A city spokeswoman declined to comment on the litigation but said there have been few 311 complaints about the properties themselves since the city condemned them. Fatal shootings associated with Bullwinkle's in 2017 and 2022 previously raised safety concerns among neighbors.

City Council Member Jamal Osman, who represents the area, said city staffers did "everything they could to work with the owner."

"The owner continues to say he has a plan to develop and make sure the whole area is a thriving space, where there's businesses, there's student housing, all those good things he talked about," Osman said. "But that also never happened."

Many boosters have shared visions for a revitalized Seven Corners through the decades. When the Green Line light rail opened in 2014, the West Bank station brought new traffic. In late 2019, developer Mortenson walked away from plans to build a 12-story hotel and 30-story student apartment building on the site.

Last summer, commercial real estate firm Rokos Advisors was advertising the site for purchase and redevelopment. A broker for the company declined to answer questions about the property.

A letter from an attorney representing R&P this past summer said the group was preparing plans to develop an assisted living facility on the site.

"This is a busy place, close to students, close to Cedar-Riverside, close to downtown," Osman said. "What I don't want to see is this place being closed the next couple years. I want to see this place come back."