Mayor launches work group to analyze retail vacancies in downtown Minneapolis

A task force made up of City Council members, downtown pundits, and building managers and brokers wants to figure out how to revitalize retail in downtown Minneapolis in the wake of several prominent store closings on Nicollet Mall.

On Wednesday afternoon, Minneapolis Mayor Jacob Frey announced the launch of the city's "Vibrant Downtown Storefronts Workgroup," a coalition of stakeholders tasked with finding new ways to fill vacant space and bring vibrancy to downtown storefronts both on the street and in the skyway.

"Retail in and of itself ... is not dead. In fact it's alive and well, but it's changing," Frey said. "We need now to be willing and able to change with the times that we're seeing before us. People are no longer going physically into a space to purchase very basic goods like underwear and T-shirts. However, they are looking for an amazing experience."

As he stood in the former JB Hudson jewelry store at the Young-Quinlan Building off of Nicollet Mall, Frey discussed how the age of large downtown department stores might be over, but there are other ways retail could be reimagined. For example, the old jewelry store is now serving as a pop-up "holiday village" market for more than 40 artists and businesses headed by women or people of color.

The workgroup will begin meeting in January with plans to make recommendations to the city next spring.

The task force was already in the works prior to the recent announcements of the closing of Marshalls, which has been a retail staple on Nicollet for nearly 30 years, and Nordstrom Rack, which closed its IDS Center store last month.

The group is supposed to take into consideration "retail market dynamics, storefront space inventory and occupancy, barriers to existing retail success, and opportunities for inclusive economic development of storefronts."

At this time, funding hasn't been allocated to any initiatives the group might conceive.

Vacant retail space was a challenge for the downtown core even before the pandemic, when it ranged from 10 to 20%. Several city stakeholders, mostly led by the Minneapolis Downtown Council, worked on solutions for the last few years.

One of the initiatives was the Chameleon Consortium, a program in which vacant retail space is leased at a discount to small businesses (many of which are minority-owned) to create pop-up stores for limited periods.

"I think this space embodies what is possible," said Steve Cramer, president and chief executive of the Minneapolis Downtown Council and Downtown Improvement District, about the holiday pop-up.

Today, the average retail vacancy rate in downtown Minneapolis has grown to nearly 35%, according to Cushman & Wakefield, a commercial real estate services firm.

Nicollet Mall, a pedestrian thoroughfare that used to be the home to several prominent department stores, has lost several big-box retailers over the years, including Macy's, Barnes & Noble and Office Depot.

The workgroup is co-chaired by Cramer and Gabrielle Grier, managing director of the nonprofit Juxtaposition Arts. It also includes City Council Members Lisa Goodman and Michael Rainville, chef David Fhima and leaders at several leading commercial real estate brokerage firms.