Downtown St. Paul leader hopes new grocer will come in after Lunds & Byerlys closure

[MUSIC PLAYING] NINA MOINI: It's our top story this afternoon. Downtown St. Paul's only grocery store is closing this month, Lunds and Byerlys. It's sparked conversations about the health and state of the capital city. This week marks five years since the start of the COVID-19 lockdown, which took a major toll on downtowns across the country. As St. Paul makes its way out of that low point, we want to talk to someone with a pulse on the area. Joe Spencer is the President of the St. Paul Downtown Alliance. Joe, thanks for taking some time to talk with me this afternoon.

JOE SPENCER: Yeah, thanks so much for having me on.

NINA MOINI: So full disclosure, this Lunds that is in downtown is very close to the MPR newsroom, for those of us who work out of St. Paul. So we are all thinking, oh man, there goes, my walk to the grocery store. Where am I going to get something to eat? But the truth is, everybody uses downtown St. Paul, right? So you've been leading the St. Paul Downtown Alliance for nearly seven years now. Can you walk me through just kind of a summary of what the downtown area has experienced throughout that time?

JOE SPENCER: Yeah. It's really interesting. I think a lot of people, they hear about stores like the Lunds closing, and you look at some of the distress that you see in the core of downtown and those commercial office buildings, but it's there's a lot more variation to the story. When we look at visitors, our visitors were really kind of the folks that led the return of downtown.

And so the area around Rice Park, around that event district, where you have a lot of the-- you've got Ecolab and Travelers and the Wells Fargo building, and of course, the Ordway and the Xcel center and all those things, those folks have been back for a couple of years. And in fact, in March, we celebrate our busiest month in terms of visitor traffic, starting with the boys high school hockey tournament that we just had over this past weekend. And Saints baseball will get started here at the end of the month. So we're expecting 800,000 to 1 million visitors in this month.

But when it comes to worker return, we are still maybe 65% of where we were pre-pandemic. And especially when we look at that lens, which, by the way, I just have to say, it's such a loss. It's just a devastating loss to lose our only grocery store. But our private sector folks are back. Our average is, like I said, maybe 65%. But it's not uniform. In fact, we look at the state workers really still very much remote.

And I'm looking at a map right now where the Lunds is, and the Anderson building, its closest large office building, those folks really aren't back to work. And even the folks, your colleagues at MPR, I know they're back a little bit, but a fraction of where they were before the pandemic.

NINA MOINI: Absolutely. I think visitors and workers are one thing. And the big St. Patrick's Day celebration is even coming up. And we know that people will come and visit and do what they need to do. But it's different getting people to want to live in downtown St. Paul, correct? So what do you say to folks who say, well, why would I come and live down here and help these vacancy rates when there's not even a grocery store anymore?

JOE SPENCER: Yeah, you know what? It is a challenge to get these projects built. But once they're built, people actually do want to live here. We have more people living in downtown now than we did before the pandemic. And we have a really high occupancy rate once those apartment projects do open.

So we're looking forward to a couple projects coming online this year. The Landmark Towers conversion of office to residential will be done here within days. And then the old Ecolab university building is going to reopen as Stella, another 180 market rate apartments there too. So the challenge isn't actually getting people to want to live downtown. The challenge is getting some complex real estate redevelopment projects really moving and accelerating so that we can populate in the way that we really want to.

NINA MOINI: Are you hoping to take, again, some of the more vacant, maybe downtown office spaces and turn them into residential spaces? What are some of the efforts that you're hearing about there?

JOE SPENCER: Yep, that's exactly right. So we put together this downtown investment strategy to guide this work. And just a couple weeks ago, we launched a new organization, the Downtown Development Corporation, to help out with these exact projects. One of the things that we do have going for us is in the core of downtown, where we have the most distressed commercial office buildings, those actually are really strong conversion candidates, meaning the architecture of those buildings lend themselves to an efficient conversion to residential apartments or condos or those kinds of things. So we actually have, again, some good alignment there and I think some really good opportunities in front of us.

NINA MOINI: So the neighborhood chats are bubbling, I'm told, from colleagues who live in the area, that people are wondering, since the infrastructure is going to be kept the way it is-- that was important to Lunds Byerlys. They wanted to keep it so that another grocery store could come in. Is that something that you already have your pulse on, what's being done at the city level with everybody to try to make sure that that type of a tenant comes in there? Or do you think no guarantees?

JOE SPENCER: I think what Lunds did and what the property owner did, really, really fantastic in terms of setting us up with the best chances of landing another grocer. I think leaving all that equipment behind, I've heard, has upwards of $12 million in value to the space. So that's a really nice head start. And I do think we've got good fundamentals.

And we're still growing, as I said, from a residential perspective. Our trend lines are good too when it comes to worker return. We're gaining about 8 to 10% every year. So I think we have good chances. And I have heard from residents-- I don't know how much this is a factor. But perhaps they're looking for less of a luxury brand, like Lunds, and maybe something more like a Trader Joe's or something known to be a little less expensive. I don't know how much that actually comes into it. I know I was really always thrilled to go into Lunds and loved having them there. So again, I don't want to sugarcoat my sense of loss there.

But I do think we've got a good shot at bringing in another grocer. Especially, you also know that there's a lot of construction going on around that lens, as Robert Street is going under reconstruction. I think that also is just a factor when you've got detours and a lot of the street reconstruction that-- by the way, we welcome, we need these investments, and we need these kinds of upgrades to the infrastructure. But there's no doubt it makes it hard to run a grocery business when the when the street out front is tore up.

NINA MOINI: Sure. There are lots of moving parts. And Lunds and Byerlys said they've been the sole grocer in downtown for 11 years. And management had said via some statements that they're pleased with levels of crime going down overall in the area of downtown St. Paul, but that they have had trouble holding on to staff members because of incidents they'd had, like shoplifting, vandalism. They had a pretty bad arson incident for a while that they had to be closed over. What's your sense for crime in downtown St. Paul? And what would you tell residents about what they can expect living here or coming to visit?

JOE SPENCER: Crime is always going to be a priority for us at the-- we've just launched some new things that I think are making a difference. But I think the timing just wasn't quite right to hang on to Lunds. But what we've done recently, we've tripled the size of our Safe and Clean program. So our DID just got expanded in January. So we're serving all of downtown now, including the area around MPR and around Lunds.

We also have a contract with Metro Transit, where we're putting our ambassadors, our safety ambassadors, on every light rail platform, 7:00 AM to 11:00 PM, seven days a week. We think those investments are going to really make a big difference and make a big improvement. I think people are going to notice those folks out and about. We know that they improve public safety outcomes, especially with the kind of quality of life issues that come up from time to time in a downtown. So I'm really hopeful and optimistic that we're going to see some real progress there as we roll out these programs here in 2025.

NINA MOINI: And just before I let you go, Joe, what do you think should go in that space? And what's the Downtown Alliance doing to rally for that?

JOE SPENCER: We're just getting underway. But we really want to see a grocer in that space. It's purpose built for it. It's got all the equipment there. That really is absolutely kind of the first choice. And like I said, we're just getting that underway, hadn't really-- we were working closely with the folks at Lunds and hoping we could work something out with them. And now they've made their decision. And so we're presently kind of pivoting to that next set of strategies to recruit another grocer into that space.

NINA MOINI: All right, Joe, thanks so much for your time this afternoon.

JOE SPENCER: Yeah, thanks a lot for having me on.

NINA MOINI: That was Joe Spencer, the President of the St. Paul Downtown Alliance.