Cost of last year's north Minneapolis tornado estimated at $80M

The tornado that wreaked havoc in north Minneapolis and other metro communities one year ago Tuesday cost taxpayers, private donors, insurance companies and property owners more than $80 million, a Star Tribune analysis has found.

The human toll of the May 22, 2011, disaster was visible from the moment the twister touched down, but the public and private costs to restore the community are now coming into better focus. The $80 million estimate is based on a review of state and federal government reimbursements, charitable donations and insurance payouts.

Insurance companies doled out the bulk of the money -- $64 million -- largely to repair private homes, according to the Minnesota Department of Commerce.

"Given the geographic impact, this is the worst we have seen in a natural disaster in the city in the last generation," said Thomas Deegan, director of housing and fire inspections for the city of Minneapolis.

He noted that 7,000 properties in the city were "in the footprint" of the tornado and 3,700 were damaged. "Insurance helped a lot," Deegan said.

The cost to taxpayers, largely to repair public infrastructure, will exceed $8 million. Of that, $6 million is expected to be reimbursed by FEMA and the state government.

That damage is illustrated by dozens of FEMA reimbursement requests archived at the state's emergency management office in St. Paul. A sampling:

Other costs will not be reimbursed by the state and the federal governments, such as the $380,000 spent by the Minneapolis Park and Recreation Board to plant 3,800 new trees. The Park Board spent about $1.1 million not reimbursed by FEMA, while the city spent about $800,000 extra and is expected to commit more.

Private help

The tornado also brought an outpouring of thousands of volunteers and many private donations, which flooded into the area to pay for home repairs and such essentials as water, food and funds to help people find housing elsewhere in the city. Last week, 100 employees from Target planted trees on the North Side.

The Star Tribune, surveying the major donors and records, calculated that $3.75 million was donated by philanthropic entities, including $1.7 million from the Minneapolis Foundation and $793,000 from the American Red Cross, both of which received large donations from corporations based or doing business in Minnesota.

But there were small donations as well. "Book clubs pooled their gifts, kids hosted lemonade stands and a group of teens recorded a song and put on a hip-hop concert," the Minneapolis Foundation said in a report it issued last week.

More than 60,000 people received assistance, she said.

Chad Schwitters, executive director of Urban Homeworks, the Christian nonprofit that helped coordinate much of the repair efforts on the North Side, said the low-income demographics of the neighborhood made philanthropic funding even more important for homeowners with little or no insurance. Plus, insurance didn't cover tree and stump removal, backfilling holes, or fences that were destroyed by the storm, he said.

"What [Urban Homeworks] has done is unbelievable," says Hillary Thomas, 53, a sales manager for a company that rents beverage machines, who lives at 1240 Vincent Av. N. with his wife, Pamela, and four children. Contractors were working at his house last week, replacing windows, sheet-rocking and painting.

The biggest single tornado expense was the $64 million in payouts from resolved insurance claims, 90 percent of which had been settled as of Jan. 1, 2012, according to the Department of Commerce, which gathered the information from insurance companies.

Noting that there were still 355 open claims, Commerce Commissioner Michael Rothman said, "My hope is that insurance companies process the remaining costs quickly." The breadth of the devastation underscores the need for people to make sure they have insurance on their property, he said. On average, it took 41.7 days to process the claims.

Actual FEMA and state payouts resulting from federal and state obligations could vary from current estimates depending on local projects; Minneapolis is going to demolish one commercial building rather than spend $309,000 in approved funds to renovate it, for example.

Uninsured building improvements are also hard to track. The city said there were $28.7 million in building permits issued, and Deegan estimated that about $6 million of that represents work not paid by insurers.

Some jurisdictions also were unable to calculate how much they spent on the tornado that was not reimbursed by the state and federal governments. And there is no single agency keeping a running total on private donations.

The infrastructure costs are much less than initially outlined. FEMA and the state emergency management agency have approved about $6 million for public infrastructure costs, a far cry from the $16 million initial estimate released after the disaster. A spokesman for Minneapolis, Matt Laible, attributed that partly to minimal "under the surface" damage to infrastructure like sewers and a less-than-expected cost to haul and dispose of fallen trees.

Five thousand loads of trees were brought a short distance to a former lumberyard along the riverfront owned by the Park Board, said Park Board spokesperson Dawn Sommers. Two companies then ground the wood for free in exchange for keeping most of the wood chips.

By comparison, FEMA paid nearly $13 million for infrastructure repairs in the wake of the 2010 tornado that ripped through Wadena, Minn. That figure does not include the state contribution.

For the north Minneapolis tornado, labor and construction costs often accounted for a large chunk of the public reimbursements. But FEMA also paid huge sums to local entities at various rates to use their own equipment, a policy for the agency.

FEMA set aside about $4.5 million of the $6 million in public damage costs, leaving Eide's agency with a tab of about $1.5 million. A lot of that money has yet to be paid out.