Minneapolis Pays for Creating its Own Retail Monster

Minneapolis SkylineI should have known better on a sunny day in Chicago on the Magnificant Mile. I know how retailers do it: they suck you in with air conditioning, new products, a half-off clearance sign and before you know it, you’ve parted with $300. Even as a retail and merchandising expert, it still happens to me. Except in Minneapolis.

It’s hard to believe that City leaders knew what the outcome would be when Bloomington opened the Mall of America on August 11, 1992. At the time, MOA was supposed to have everything a city center should contain: retail, restaurants, an aquarium, a wedding chapel,  Knott’s Camp Snoopy, night clubs (there was even talk of the Jacksons investing in a nightclub – those Jacksons: Janet, Michael, Tito…) Bloomington was looking for a way to offset the draw that the Met Stadium once was and came upon a whale of an idea: Mall of America. A site to see. Easy access from the airport. And 25 years later, it looks like they placed their bets correctly. On any given day the visitors of Mall of America makes it Minnesota’s third largest city.

Which leaves us with the Minneapolis and its *Block E*Nicollet Mall*What are we going to do with Downtown*Now Macys has closed* dilemma.

When a city is planning for a thriving downtown center there are several key foundations that a downtown can count on to keep the center vibrant:

  • Entertainment venues to draw folks in. Your sports team stadiums, theaters, and concert venues. Minneapolis grade? A. Not just because of the new Vikings and Twins stadiums but Guthrie, Cowles and the State/Ordway/Pantages triple threat.
  • Restaurants and bars – even strip clubs – to extend events and keep dollars downtown. Minneapolis grade? B. if you include Uptown and Northeast.
  • Education Centers – get ’em while their young and they may want to stay. Draw in out-of-staters and access to a fresh stream of low-wage workers. Minneapolis grade? A
  • Business Headquarters and a thriving business community. Minneapolis grade? B. Not bad for most midwest cities. But how it let Richfield get Best Buy is still a head scratcher.
  • Retail – it’s what keeps the city alive on Saturdays and Sundays. With the right drawing cards, it can add a tremendous tax base and jobs to a city center. Minneapolis grade? F. Seriously: F.  Here’s why:

The population of Minneapolis is not large enough to support two flagship stores of any retail brand. When Nordstrom, Armani Exchange, Victorinox, BCBGMaxMara and others look at their retail portfolio they know they can only support one store in the Minneapolis area. In Chicago, that’s going to be the Magnificent Mile. In Minneapolis, that will be in the Mall of America or Edina’s Galleria which are the two upscale malls in the Twin Cities. Stores that have tried to make a go of it in our lifeless downtown have struggled. Ralph Lauren Polo tried until July 2007 and Neiman Marcus closed in Gaviidae.

So Minneapolis is stuck with taking the retail left overs: the Nordstrom Rack, Len Druskin, Marshalls and other off-price retailers that fill space but do not get people to come into the city to shop.

There is a way out. But it will require a new way of looking at a retail-Minneapolis alliance. MOA can never be a mecca for LOCAL retail. The rent is too high. But if Minneapolis had the vision, it could create a retail corridor of local, pop-up and experimental locations as a draw.

  • Create a streamlined way for online retailers to create pop-ups
  • Create a revolving location that allows retailers to prototype and test retail concepts with a live customer base
  • Make marquee local retailers the anchors with permanent locations at cut-rate rents
  • Create a business district brand that markets and creates buzz for those who shop local as THE premiere destination in the city.

There are ways to get this done. But as long as the City of Minneapolis continues to allow landlords to guide the “vision” of the downtown shopping district, we will continue to have struggling locations, closed stores and a stream of people headed to Bloomington to shop.

 

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