Minneapolis leaders praise the Midtown Global Market as an urban renewal success story. But it's a success that continues to cost the city money.
While it draws more than 1 million visitors a year, the market's missed every revenue target since it opened in 2006. Lagging sales and poor cash flow mean it won't be able to make any payments on its city loan for the next 10 years, executives say. A new report recommends the city write off more than $1.5 million in loan debt and interest.
The city council is expected to vote at the end of this week on forgiving the loan as well as a $150,000 subsidy to keep free parking at the market. For some, it will not be an easy vote. Love for the project is giving way to questions of how much more the city should spend to keep the project afloat.
The council's budget committee rejected a $185,000 subsidy for the market earlier this month pushed by Mayor R.T. Rybak, the project's longtime champion. Rybak said the market deserved special help. Council Member Gary Schiff, who represents the Phillips neighborhood where the market is located, opposed the payment.
Schiff said he supported the market but wanted it to compete with other enterprises for city money by going through the normal procedures. "I just don't want to break our budget policies right now of doing an earmark through budget process for one particular entity -- even if it is in my back yard," Schiff said.
Despite the losses, supporters say the Midtown Global Market is an important Minneapolis asset. The city helped created the market out of the old Sears department store building near Lake Street and Chicago Avenue. In 2005, the city stepped in with a $2 million bridge loan. In 2007, Hennepin County provided nearly $500,000 to fund the current parking validation system.
The market, together with the renovated building's 200-plus apartments, have sparked new housing construction in the area and improvements to the nearby Midtown Greenway, said neighbor Jason Lyons-Tarr.
"It's really a vital part of our neighborhood. It's kind of like the heart of our neighborhood," said Lyons-Tarr, who on a recent day brought his young daughter to the market.
"We were here before, when the building was vacant," he added. The renovation has "made the quality of life for Phillips, which is one of the largest neighborhoods in the city, so much better."
Mike Temali, CEO of the Neighborhood Development Center, which has managed the market since it opened, said it is slowly reducing its expenses and increasing revenues. Temali said over the last few years, new food vendors have helped attract more attention and visitors to the market. "What we'll do now is redouble our efforts to fill the last 10 percent of the space with good merchants and keep driving more traffic in there," Temali said.
City officials say the market has cut its operating gap from $770,000 in 2008 down to $260,000 in 2013 and that it may be possible to defer the loan repayment instead of forgiving the debt. That would allow the city to be reimbursed if the market became profitable some day
Temali said free parking is important because the market has increasingly become a destination for people shopping for groceries -- and most grocery stores have free parking.
"In order to get folks to view this as a regular grocery shopping destination, which is what we're trying to do, the validated 90 minutes of free customer parking is pretty crucial we think," he said.
It's clear that many of the people who come to the Midtown Global Market for lunch work for the Allina Health headquarters adjacent to the market or at one of the nearby hospitals and clinics. They wear ID badges, white lab coats or hospital scrubs.
But there are also people like Joy Caires. She comes to the market every once in a while for a bowl of bimimbap, rice with kimchee and poached egg and tofu and vegetables.
The Korean specialty is served at the Left Handed Cook, one of the many food vendors at the market that serve dishes that likely can't be found at a food court in a local mall.
The market is also a great place to bring children. It has a play area for restless toddlers to work off a little energy.
Caires also likes the fact that the market hosts classes and other community events, including cultural celebrations like Kwanzaa and Chinese New Year and other large group gatherings.
"It seems like it's kind of an epicenter for a lot of community gatherings, especially of the more progressive sort," she said.
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