Somali mall, Walgreens burned in Minneapolis riots set for $40M redevelopment

Plans to redevelop the Karmel Square Mall in south Minneapolis into a $40 million office, retail and apartment building have won preliminary approval from the Minneapolis Planning Commission.

The property had been a Walgreens store at 200 W. Lake St. and behind it — at 2910 Pillsbury Av. — a popular mall frequented by the Somali community. The property is believed to be the first Somali-focused mall in the country.

The Walgreens store and other surrounding structures on Lake Street were burned and sustained sprinkler damage during riots in May following the police killing of George Floyd, so the redevelopment plans are a boon to the city.

Under the plan approved by the Planning Commission Monday, the mall and Walgreens will be redeveloped into an eight-story building called the New Karmel Square.

The three bottom floors will offer 180,000 square feet of offices, a grocery cooperative, coffee shop and other retail stores. The five upper floors will become 113 affordable apartment units, many with three and four bedrooms that can accommodate larger families. The property will also have parking and there are plans to incorporate some type of children's ball court and play area terrace into the finished project.

The goal is to complete construction by the end of 2022, said developer Basim Sabri.

"I am trying to move as fast as I can. I am excited. I love Minneapolis and I love Lake Street. Lake Street is like my second home," said Sabri, who has an apartment and an office on Lake Street and has developed more than 10 properties nearby. He just finished construction of the $20 million Rana Village Apartments just west of Karmel Square.

The city's Zoning and Planning Committee will vote on the project Jan. 5. The full City Council votes Jan. 25.

"It's exciting to see a large structure come before us that [could] really meet the goals of the city's 2040 plan, especially since we are in the middle of the pandemic and we have had hard times in the city," senior city planner Andrew Liska said in a phone interview Tuesday.

He said the Whittier neighborhood project is unusual because it hopes to cater to larger families.

Sabri purchased the Walgreens property about a year and a half ago. In June, Walgreens agreed to move to a different site, opening the way for a larger project. He hopes to begin demolishing the old store structure next week, he said.

Sabri bought and redeveloped the Karmel Square mall building 24 years ago. It was originally zoned for industrial use, but Monday received preliminary approval to be reclassified for commercial and residential use, Liska said.

If built, the New Karmel Square building will be connected by a skyway to an adjacent four-story building that Sabri also owns called Karmel Plaza. It sits on the Midtown Greenway between Pillsbury and Pleasant avenues. Sabri hopes to renovate Karmel Plaza by February and will immediately relocate his mall tenants into that building, so the mall can be demolished and construction can begin.

Some of his mall tenants have been with him for 24 years so he intends to look after them, Sabri said.

Glynn Haag, who owns several units in the Park Square Condominium building across from Karmel Square and an apartment building a block away on Lake Street, said the day after the riots hit in May, water from the fire-sprinkler systems was still gushing out of the burned and looted Walgreens store on Lake and Pillsbury.

"Things were destroyed," so the new Karmel project "is good for the community," said Haag who has known Sabri for 30 years. "What [Basim] does is bring a lot of good things to the neighborhood. Some people don't like it, but he took up a lot of buildings on Lake Street when they were boarded up or [used to be] porn shops and he turned them around. It's what he does. He's not afraid."

Dee DePass • 612-673-7725