The Minneapolis Park Board is poised to extend a program that generates funding for trees by selling carbon offset credits to private companies that want to claim they are “offsetting” their greenhouse gas emissions without reducing them.

The offset program partnership with local nonprofit Green Cities Accord provides a much needed revenue stream for the Park Board, and the board is expected to approve it Wednesday. But that vote is likely to come over the objection of a minority of commissioners, who say the system amounts to “greenwashing” — allowing companies to say they are environmentally friendly but actually allowing them to shortcut carbon-reduction goals.

“I would love to explore other avenues that don’t basically give other … people a way to assuage their guilty conscience and a license to pollute,” said Commissioner Becky Alper.

Other commissioners say the Park Board is in a budget crunch and has to be willing to be creative.

“We exist in a capitalist structure that requires that we find ways to do things, including with people that we sometimes don’t necessarily fully agree with their approach to doing business, to try to further things that we feel are important, like restoring our urban forest and expanding it,” said Commissioner Steffanie Musich. “I understand this program is not perfect. There is nothing here that we do that is.”

How it works

Since the program started in 2022, the Park Board has sold more than 3,800 offset credits (each representing one metric ton of carbon dioxide) based on the carbon-sequestering power of 32,350 trees planted between 2019 and 2022. Seven local companies, including Xcel Energy, have purchased these credits for about $35 to $40 a pop. CenterPoint Energy is interested in buying credits in the near future.

Green Cities Accord and third-party registry City Forest Credits each get 10% of the sales revenue. The Park Board keeps 80% or a total so far of about $104,000.

At an average cost of $150 per tree, after two years the carbon offset program could pay for planting 693 additional trees.

But none of the profits has been used to plant a single tree. It may be used to purchase trees in 2025, said Park Board spokeswoman Robin Smothers.

Reducing carbon emissions

As regulatory agencies and stockholders pressure companies to reduce their carbon footprint, some are searching for ways to offset the emissions they are finding hard to eliminate.

Green Cities Accord’s director of programs and operations, Michaela Neu, tells prospective buyers that each credit represents a “removal of carbon from the atmosphere” that have tangible impacts ranging from improved air quality to lower local heating and cooling costs.

“All of these factors indicate to our purchasers that this asset is a valuable component that can be utilized in one’s portfolio as they look to reduce their carbon footprint,” she said.

The program also provides a veneer of legal protection for its enrolled tree: If the Park Board were to neglect the trees, causing them to die at a rate exceeding natural attrition, they could no longer be capitalized for credits.

The hope is that the longer the trees are kept alive, the bigger they get and the more carbon they will sequester, allowing them to generate credits to be sold for as much as the market will bear.

Xcel and CenterPoint have included the purchase of carbon offset credits in their Natural Gas Innovation Act (NGIA) plans — blueprints for reducing carbon emissions that utilities are required to submit to the Public Utilities Commission — as a form of “carbon capture.”

But the Attorney General’s Office, Department of Commerce, Citizens Utility Board and a host of clean energy organizations don’t agree that the credits should count.

Commerce Department analysts emphasized that because CenterPoint is proposing to buy carbon credits that the Park Board planted in past years, they aren’t really funding the planting of any additional trees anywhere in CenterPoint’s service territory.

“It is only meant to help CenterPoint Energy claim ownership of these carbon reductions, but does not produce any additional carbon reductions in the state,” the department concluded. “Additionality is essential for the quality of carbon credits – if their associated greenhouse gas reductions are not additional, then purchasing credits in lieu of reducing a company’s emissions will make climate change worse.”

Lawyer Melissa Partin of the Minnesota Center for Environmental Advocacy said carbon offset credits are fundamentally at odds with the purpose of the NGIA, which is to reduce actual emissions.

“If utilities purchase offset credits from a program like Minneapolis’ tree planting program, they aren’t reducing the amount of gas they distribute to customers,” she said. “They’re just continuing with business as usual.”

Funding the urban canopy

Commissioner Tom Olsen was the only Park Board member on the finance committee to vote against extending the carbon offset program.

“I think we’re at the point now where if we stay neutral on carbon, we’re going to have several degrees of warming, which will be quite catastrophic,” he said. “We have to move past neutrality and move towards reduction, in creating deficits, and I see these carbon credit programs as not moving in that direction enough.”

But the Park Board faces a painful dilemma: How else can it make enough money to grow Minneapolis’ canopy?

In 2021, an eight-year Tree Preservation and Reforestation Levy expired after raising more than $11 million to replace 40,000 public trees lost to emerald ash borer and storms. Now that the Park Board has replaced all of the city’s infested public trees, it can’t issue another levy without another disaster, Musich said.

The Park Board also looked into getting the Metropolitan Airports Commission to contribute because part of the airport operates on parkland, but that the proposal gained no traction, she added. Neither have any private companies offered to simply donate to tree planting out of altruism.

After the tree levy expired, the Park Board received $1 million in federal COVID relief funding, for which Green Cities Accord, then known as Green Minneapolis, helped lobby. The Park Board spent all of it on planting and maintaining trees in the past two years.

“So, 2025 is the first year in about 10 years that we will only have general funds for tree procurement, and we’ll be limited to purchase 2,000 to 3,000 trees instead of the 8,000 to 10,000 we’ve been procuring and planting,” Smothers said.

The Park Board must plant about 4,000 trees a year just to replace trees lost to natural attrition. It must plant even more to meet its goals of expanding the urban canopy, especially in lower-income parts of the city with more heat islands.

“Quite honestly, we spent years talking with experts about ways that we could try to do this and [with] other cities about what they’re doing, and this is really the only thing we could find that would be viable and large enough to have an impact on what we were attempting to do, which is find a new source of funding for trees,” Musich said.

Gov. Tim Walz and DFL leaders of the House and Senate say they’ve struck a deal on minimum pay standards for Uber and Lyft drivers that will prevent the companies from making good on a pledge to leave parts of the state on July 1.

The agreement, announced at a Saturday evening news conference, preempts a recent ordinance from the Minneapolis City Council on pay standards and sets minimum rates statewide at $1.28 per mile and 31 cents per minute.

“No one else has been able to do this in the country,” Walz said in the hastily-scheduled news conference. “Minnesotans will be able to continue to use these services if they see fit.”

Democrats said the companies are on board with the deal, but Uber’s lobbyist did not immediately respond to a request for comment.

Sen. Omar Fateh, DFL-Minneapolis, the lead sponsor of the bill, said after the announcement that it’s been “two long years” of work on the proposal.

Fateh, who had been missing from legislative action on Saturday, said he spent the day in negotiations with staff and DFL leaders to get the bill in the shape he wanted it to pass this session. The Senate, which is controlled by Democrats by a single vote, was in recess for 11 hours during the negotiations and all other work came to a standstill.

Legislators have a Sunday night deadline to pass legislation before they’re required to adjourn.

“Sometimes legislation like this takes a long time to negotiate,” Fateh said. “We spent the day, we got it right.”

The Minneapolis ordinance passed earlier this year would require a rate of $1.41 a mile and 51 cents a minute, or at least $5 minimum per ride. Those rates prompted Uber and Lyft to say they planned to leave the city as soon as the ordinance took effect.

Council members delayed implementation of their new rates from May 1 to July 1, giving legislators in St. Paul more time to negotiate a deal.

A study ordered by the state Department of Labor and Industry estimated that, for drivers in the Twin Cities metro area, it would take 89 cents per mile and 49 cents per minute to approximate the minimum wage, or $1.21 per mile to provide drivers with more benefits.

The range was higher for drivers in greater Minnesota, with the study’s suggested per-mile rate ranging from $1.16 to $1.40 because drivers tend to travel farther between fares.

Not all city council members were happy with the deal, including council vice president Aisha Chughtai, who posted to X Saturday that “preemption is bad. Period.”

“Any and all attempts to undermine local control are bad,” she continued. “It’s a Republican and corporate tactic used around the country. Watching our @GovTimWalz cave to multibillion dollar corporations in insisting on preempting Minneapolis is gross.”

The announcement comes with a little more than 24 hours left to pass bills during the legislative session. Democrats wouldn’t comment on the status of other outstanding legislation, including a sports betting bill and a statewide package of infrastructure projects.

Responding to the announcement, Republican legislative leaders said they continue to be cut out of the negotiations.

“Democrats have continued to negotiate bills behind closed doors without involving nearly half the legislature,” read a statement from House Minority Leader Lisa Demuth, R-Cold Spring, and Senate Minority Leader Mark Johnson, R-East Grand Forks. “Until Republicans are involved in these discussions, there will be no Republican votes for any bills that require bipartisan support.”

Staff writer Josie Albertson-Grove contributed to this report.

A dispute that started during Ramadan between a northeast Minneapolis restaurant owner and the city has led to allegations of police and city harassment, along with a drop in his business.

Michael Mokhalad, owner of Mrs. Dessert & Kumpir, had sought a temporary license to extend his hours during Ramadan this spring. Such licenses became available in 2015 after the city approved an ordinance allowing businesses to apply to stay open late during the Islamic holy month.

Mokhalad said that although he never heard back from the city about his license application, he stayed open after hours. Now he said he’s looking for a new location after receiving four citations from the city — enforcement that began, according to city records, after a fight and shooting near his business in late March.

He said business has fallen even more since Ramadan, a drop he attributes to a “bad reputation” in the community over his issues with the city. One Google review of the business said his restaurant “has become a hotspot for late night crime, which they refuse to do anything about.”

“Sales have dropped; it’s really, really bad,” Mokhalad said. “People are saying my business is bringing the crime and violence.”

After receiving the four citations for staying open after permitted hours, he said he’s looking for a new location for his restaurant. He said he’s lost two employees who cited concerns about the police presence there.

“Police are harassing me and the rest of the customers and the employees,” Mokhalad said.

Minneapolis police officials declined to comment for this story.

Mrs. Dessert & Kumpir opened in late 2023 in the Holland neighborhood, bringing Middle Eastern pastries and street food to the Twin Cities. It was Mokhalad’s first venture into business ownership and his introduction to the northeast Minneapolis community.

Mokhalad said he inquired about a temporary license to extend his hours beyond 10 p.m. during Ramadan, which started on March 10. In the holy month, Mokhalad said, there’s always a rush after sunset when Muslims are allowed to break their fast. Many show up later at night after going first to pray, he said.

A city inspector sent Mokhalad application materials to extend his hours. He said he signed and turned them in. He then began staying open until about 3 a.m. Business picked up, he said.

“I was selling almost 300 pieces of each flavor of the cake,” he said.

The conflict between Mokhalad and the city began after an early morning shooting on March 24 in the same block as his restaurant. After a fight involving a large group of people, two men ages 21 and 17 went to Hennepin Healthcare with noncritical gunshot wounds. No one has been arrested, and it’s unclear where exactly the shooting occurred.

In an email from a public records request filed by the Sahan Journal, Amy Duncan Lingo, business licensing manager for Minneapolis, said she was notified about the shooting the next day. She said Mokhalad’s restaurant lacked a permit or license to operate later.

Because the incident involved a fight and shooting, the city issued Mokhalad a $200 citation, Lingo said. “It was made clear that they were not to be open without approval,” she said.

On March 27, police returned to the restaurant for a follow-up inspection and found it again operating past 10 p.m. The city issued a second citation for $400.

“Mr. Mokhalad told me of their struggles with slow business in the morning, which I understood, but I stated again that his opening late unauthorized … created a dangerous environment for the neighborhood,” Lingo wrote.

She said she would not process his application until an inspector approved Mokhalad’s security plan.

Another incident on April 2 “showed not only that they were still open beyond approved hours but that them being open was creating an unstable and dangerous situation,” Lingo wrote.

An $800 citation was then issued.

When the city forced him to close at 10 p.m., Mokhalad said, his sales dropped by 85%. “Every single night, more than 20 missed calls from people,” he said.

He said police increased their presence outside his business around closing time during Ramadan. He said they sometimes would park outside with lights on and tell customers showing up after 10 p.m. that the business was closed.

One of the citations obtained by the Sahan Journal said Mokhalad was notified that his business must “close, and customers vacate the premises by 10 p.m.” He said he turned off his “open” sign at that time but continued to serve people who had come in before closing. “I have to sell them,” Mokhalad said.

A city spokeswoman said Mokhalad’s application to temporarily extend his hours was filed “after the initial citations.” The restaurant owner said he submitted it before his first citation, though to the wrong precinct office.

He received another citation, he said, for setting up a table and chairs outside. He said he was told he could apply for a permit for outdoor seating.

“I didn’t apply yet because I know what the result is going to be,” Mokhalad said.