City Center in downtown Minneapolis signs four new tenants, including two restaurants

Bad Axe Throwing bar will soon open at City Center in downtown Minneapolis, one of four new tenants at the Nicollet Mall building.

Branches of two banks are now open on the skyway level, and Tom's Watch Bar in 2022 will take over the large 6th-and-Hennepin space that was last occupied by Prime 6.

"These leases at City Center are definitely good news and a positive indicator for the positive trajectory of downtown," said Minneapolis Downtown Council CEO Steve Cramer.

The 15 months since many companies sent their workers home as part of the plan to stem the spread of the coronavirus have been brutal on downtown businesses and landlords. The bustling skyways turned into a veritable ghost town as 210,000 office workers stopped commuting to downtown offices.

News that Target Corp. is giving up 1 million square feet of its downtown office space in City Center added a level of fear that business would not ramp up quickly.

But Cramer said downtown is seeing a "continued uptick of office workers coming back." The council's latest survey shows that close to 30% of workers are back in corporate offices at least part of the time, double what it was earlier this year.

"With the return of the farmers market [to Nicollet Mall] and other activities, the feel of vibrancy is also returning," he said.

Banks and restaurants require foot traffic, Cramer said, so the new City Center tenants are a sign of recovery. But more people will need to come back downtown for businesses to thrive.

"I am cautiously optimistic," said Jim Durda, City Center's general manager. "It won't happen overnight, but these are the strong signs that we are headed in the right direction."

City Center's retail occupancy rate is now 62% but is expected to jump to 67% by September and 72% in January 2022, he said. Occupancy rates for City Center's upstairs office tenants remained steady at 93%, even though roughly 70% of all office workers were not working in the offices.

The City Center location for Bad Axe will be the chain's second in Minneapolis, and will feature 24 targets and a full bar. It will occupy former warehouse space of Target's near Fhima's Minneapolis restaurant, facing the building's atrium.

For Tom's Watch Bar — which has two restaurants in Denver, one at the airport and one at Coors Field — the City Center location will be its first in Minnesota. It is known for its stadium-sized screens and having 100 smaller TVs for 360-degree viewing.

The bar's space is a prime downtown corner, which has been unoccupied since the short-lived Prime 6 abruptly closed in December 2018. Predecessors at the spot include Rosa Mexicano, TGI Fridays, Italianni's, Chi-Chi's and Ol' Mexico.

Gaining the four new retail tenants took longer than expected, Durda said.

But increasing crowds at Target Field and Target Center plus events on the rise at the Minneapolis Convention Center are reviving the demand for services.

Last month, the IDS Center, which sits kitty corner from the City Center on Nicollet Mall, announced that NOA restaurant will open soon, taking the place of the popular Mission Restaurant that closed in March 2020.

Last week, the farmers market returned. The Minneapolis Aquatennial has planned a week of events in July, including crowning its queens at an event inside City Center.

The activity signifies "really encouraging green shoots for new life downtown," said Jim Vos, principal of real estate services firm Cresa Minneapolis.

"I was never in despair, but this whole COVID [shutdown] went on longer than any of us thought. I just couldn't see the light at the end of the tunnel," he said.

But the leasing market is now on the upturn.

Chase's new bank branch opened in November in City Center's skyway corner at Nicollet Mall and 7th Street South. It took up part of the closed Brooks Brothers store.

"Despite the challenges of the past year, we never wavered on our commitment to downtown Minneapolis," said Emily Johnson, the branch manager. "We opened last November and have been open every day since, welcoming all customers."

The branch is the eighth the New York-based Chase opened since entering the Twin Cities marketplace a few years ago.

Fargo-based Bell Bank opened its newest 8,000-square-foot branch last month where the shuttered Brooks Brothers and Allen Edmonds stores used to be. The branch is Bell's 11th location in Minnesota.

Bank employees will soon begin hosting customer appreciation and "meet and greet" events on the branch's City Center terrace, which faces Nicollet Mall. Bank officials told Durda they never would have leased the space had the terrace and building exterior not been recently renovated.

"We spent $3 million to take down all the precast concrete and put up a new facade. And and that generated new leasing activity for us and so we are excited about that," Durda said.

Includes reporting by staff writer Rick Nelson.