An East Lake revitalization in Minneapolis

Commercial real estate activity along the two-mile stretch of E. Lake Street from Hiawatha Avenue to the Mississippi River in Minneapolis is continuing to pick up with the recent coming of a new architecture studio.

292 Design Group, a three-partner firm composed of Tom Betti, Pam Anderson and Mark Wentzell, has joined a modest but growing number of businesses choosing to help bring new life to a commercial strip long known for empty storefronts.

The partners bought and rehabbed a one-story building at 3533 E. Lake St. last year and this winter are settling into their new digs, which feature exposed brick, open work spaces and a floor-to-ceiling front window.

It's quite a change from when the long-vacant storefront was home to Diane's Massage Parlor — one of a string of prostitution fronts in the neighborhood that eventually were forced out of business in the 1990s with the aid of determined city officials and Longfellow neighborhood activists.

As new, younger families moved into the neighborhood over the next decade, they brought a wave of residential investment, and commercial real estate investors eventually followed.

It has taken several years, and there still are plenty of vacancies along E. Lake Street, but now the area seems primed for a full-scale rebirth, Betti said.

"We had been headquartered in New Hope but were looking for a new space in the city," he said. "[Partner] Mark [Wentzell] came over here for a meeting one day and was driving down Lake Street when he saw the for-sale sign and thought, 'That could be a cool place."

He said the partners quickly realized that the area was up-and-coming, featuring a central location, transit access with the No. 21 Metro Transit bus and attractive streetscaping installed as part of Hennepin County's four-year effort to upgrade Lake Street, which was completed in 2008.

"In the few short months we've been here, we've been seeing a lot of activity," Bettis said. "We're excited about it."

He said the entire firm recently had lunch down the street at the newly opened Sonora Grill at 3300 E. Lake St., in what was once the dilapidated former home of Molly Quinn's Irish Pub.

The building was purchased and given a $1 million makeover by Minneapolis-based community developers Redesign. Sonora Grill and the under-construction Longfellow Market grocery at 3801-15 E. Lake are being touted by neighborhood backers as anchors for the commercial strip's new life.

Eddie Landenberger, a senior project manager for Redesign, said Sonora Grill was lured to East Lake as the site for its second restaurant because of an unmet demand for new retail there.

"A lot of younger folks who are moving to the neighborhood have disposable income and are looking for local retail options," he said. "In doing our research, we found that a lot of Longfellow residents are going to [St. Paul's] Highland Park. There's a lot of the ­market ­exiting the area."

Redesign is hoping to attract another retail tenant to a new commercial space adjacent to the restaurant.

Andrew Johnson, newly elected as the Ward 12 City Council member, has been involved in efforts to fill empty storefronts and attract redevelopment along E. Lake Street for several years as president of the Longfellow Community Council.

He said that while there are indeed still eyesores and underutilized properties along the corridor, its time as a redevelopment hot spot is quickly arriving.

"There are additional buildings where we're working with the owners to try to get some action," Johnson said. "Things are turning around. We've even met with [Minneapolis real estate developers] the Ackerberg Group, who are interested in potentially doing several projects along East Lake Street."

Don Jacobson is a St. Paul-based freelance writer and ­former editor of the Minnesota Real Estate Journal. He has covered Twin Cities commercial real estate for about 10 years.