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Minneapolis maps next steps as big stores exit downtown

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There are numerous empty storefronts in Mpls. skyways.
With department stores dying and the future of Macy's unknown, experts say Minneapolis must find a way to recreate a vibrant shopping district as more people move downtown.
Judy Griesedieck for MPR News

Sandy Nelson's Northern Lights Tea Company sits in a skyway that ties her business to Macy's, the anchor of downtown retail Minneapolis. Reaching Nelson's shop these days, though, requires passing several empty storefronts. 

"Big stores keep leaving," Nelson said, ticking off a list of high-profile retailers that have disappeared from downtown. "Sports Authority, the Office Max is gone, the Neiman Marcus is gone, Saks Fifth Avenue left. They came back but they're not the same as they were."

Nelson and others worry that Macy's, downtown's last remaining giant, may be about to fall. The company is selling off stores and said last month it continues to explore options for flagship locations in Chicago and Manhattan.

If Macy's leaves Minneapolis, it won't be a shock. Big Retail has been dying for years in downtowns here and across the country as suburban and online shopping explode. Experts say Minneapolis must find a way to recreate a vibrant shopping district and lure back the region's shoppers knowing the department store giants won't be returning. 

City and business leaders say they're working on the revival.

Skyway storefronts for lease.
Concern about the future of retail in downtown Minneapolis extends to the skyways, with numerous empty storefronts for lease.
Judy Griesedieck for MPR News

"The city is working with property owners and brokers and downtown residents to figure out what are the steps we can all take to make the downtown Minneapolis retail experience as much as we can make it," said David Frank, the city's planning and economic development director.

Frank said he believes the $50 million revitalization of Nicollet Mall, the city's retail spine, will play a key role in making downtown a compelling enough destination to overcome the hassle of winter weather and the absence of free parking. "It will be a must-see destination in downtown."

Downtown needs more unique stores, one-off retailers that won't be found elsewhere, he added.

City leaders see plenty to work with as they rebuild. Minneapolis job growth is steady, the unemployment rate is just 3 percent and downtown residency is booming. Consumers are moving into the area. 

"You have to be optimistic about residential growth, hotel growth, job growth, public investment in projects like the Nicollet Mall," said Minneapolis Downtown Council President Steve Cramer, who also notes encouraging signs of a retail renaissance already, including the growth of small shops in the city's North Loop neighborhood.

The city's center draws big crowds for conventions, sporting, cultural and entertainment events, he added.

Still, the retail sector can affect a city's self-image and empty storefronts don't help. Large retail properties in downtown Minneapolis have a vacancy rate of 15 percent, nearly triple the regional average, according to the Welsh Companies Colliers International real estate firm.

"That's kind of a city's face to the world," said Michael Berne, an urban retail consultant. "The retail there is to some degree seen as a reflection of the city more broadly."

Nicollet mall construction
With major renovation construction ongoing along Nicollet Mall, the skyways are often a better route, especially in chilly winter weather.
Judy Griesedieck for MPR News

Minneapolis will also have to make sure people feel safe. Business leaders recently sent a letter to mayor Betsy Hodges, demanding the city address what they called "unchecked flagrant aggressive and sometimes criminal behavior." 

While downtown can't be the preeminent shopping destination it once was, it has enough going for it that it could still be a vibrant retail center, Berne said.

Kris Schisel, senior associate with the Welsh Companies Colliers International real estate firm in Minnetonka, agrees. She believes retail will have a solid future downtown with or without Macy's.

"I see downtown thriving. I see it going through a transition," she said. "It's just going to take a while for us to figure it all out."