What's next for Nicollet Mall? Downtown Minneapolis depends on its revitalization.

Through the past 30-plus years, Bob Greenberg has seen Nicollet Mall change, from the various names of Dayton's department store to the building of Gaviidae Common to the construction — and eventual demolition — of the high-end Conservatory.

"I have operated on the mall for a long time," Greenberg said. "I have seen a lot of these ideas come and go."

Yet if Greenberg — who took the helm of the Young-Quinlan building on Nicollet Mall with his wife, Sue, in 1985 — were to step out of the year-by-year oscillations, he'd see the mall, in some ways, has hardly changed at all.

For years, city advocates have debated its best use and possible improvements. Now in 2023, Nicollet Mall is again the epicenter of downtown's revitalization, this time with the added pressure of hybrid work having sapped much of the foot traffic and pushing last year's retail vacancy rate to about 39%, the highest since 2013.

"Everyone sort of looks at Nicollet Mall as the unsolvable puzzle. What could be done?" said Dan Collison, senior director of business development and public affairs for Minneapolis developer Sherman Associates. "It would be transformative for the rest of the downtown."

Compared with the same time in 2019 pre-pandemic, foot traffic on Nicollet Mall was down nearly 30% in September, according to Placer.ai, a firm that tracks anonymized cellphone data.

Still, compared with 2022, foot traffic on Nicollet Mall has seen increases every month this year. In September, foot traffic was up more than 7% compared with last year, likely thanks to a surge in event traffic as well as some workers returning to the office, said Steve Cramer, chief executive of the Minneapolis Downtown Council. Cramer said he expected total attendance at conventions, sports games, concerts and other events in downtown this year to exceed what was seen before the pandemic.

"It certainly is feeding street traffic when those events occur, and there have been so many of them that it's been relatively consistent over the course of the year," he said.

This summer, a group of city stakeholders formed by Mayor Jacob Frey released a list of recommendations to help revitalize downtown retail, especially along Nicollet Mall. Suggestions included changing land-use regulations to allow for more flexibility in allowed types of businesses, moving buses off the road and lobbying the state to loosen liquor laws at temporary outdoor events.

Some of the recommendations aren't exactly new, such as a suggestion for the city to offer free or reduced parking during certain events, similar to the "Do the Town" free parking program the city launched to encourage downtown shoppers when the Mall of America first opened.

Greenberg, one of the few local owners left on the mall, said he has seen many ideas shelved, or completed with underwhelming results. To him, the $50 million and more than two-year reconstruction of Nicollet Mall that ended in 2017 fits the latter. He advocated opening the buses-and-pedestrians-only Nicollet Mall to vehicles and more city support for building owners, including property tax reductions, to help them afford leasing out retail space below market value.

Greenberg currently leases deeply discounted space on the street level of the Young-Quinlan building to diverse tenants of the Downtown Council's Chameleon Shoppes program, including boba tea and pancake restaurant Coconut Whisk Café and Black-owned Strive Bookstore.

"Not everybody can do that," he said.

The city and Downtown Council have designated $150,000 to go toward working on some recommendations from the task force, such as an inventory analysis. The mayor's budget proposal includes another $750,000 for next year, with the potential for it to become an annual allotment, for initiatives like an expansion of the Chameleon Shoppes and an artist program to activate vacant storefronts.

But Nicollet Mall — and the rest of downtown — will likely require more financial investment from the city, and possibly business owners.

Other major cities across North America are also battling office and retail vacancy and have earmarked millions of dollars for solutions. For example, Chicago, concentrating on downtown's LaSalle Street corridor, has advanced a handful of office-to-residential conversions that — if all approved, including the potentially hundreds of millions of dollars in tax-increment financing (TIF) — would create more than 1,600 housing units. The city is also offering grants of up to $300,000 for projects that could revitalize the area's ground-floor commercial spaces.

When Southdale Center, the country's first indoor shopping center, opened in 1956, many saw it as a direct threat to downtown Minneapolis' shopping scene. Opening the first skyway connection in 1962 and creating Nicollet Mall in 1967 were the response.

Many long-term Minneapolis residents have fond memories of legacy stores like Dayton's and JB Hudson, as well as big-name brands like Saks Fifth Avenue, lining the mall. Yet retailers in the central business district have been in flux for decades, with more reports of closings than openings in recent years. Hubert White men's clothing store closed in August. Marshall's shuttered in January, and Nordstrom Rack did the same during last year's holiday season.

The northern portion of Nicollet Mall has seen significant change in recent years, even if took a long time for some ideas to become reality. For example, developers had debated the future of the block where the Nicollet Hotel used to stand for the better part of a decade before the 37-story RBC Gateway Tower opened last year with offices, condos and a Four Seasons Hotel. Other additions — like the Nic on Fifth apartments (opened in 2014) and 365 Nicollet (opened in 2018) — have changed the look and feel of that portion of the mall.

But the blocks between 5th Street S. and 10th Street S. have continued to be plagued by empty retail spaces.

"As we come out of these last three years of COVID, plus the impact of civil strife after the murder of George Floyd, this part of our downtown economy isn't working as well as it needs to going forward," Cramer said. "And so we need to do something a little bit different than we've done in the past."

With empty space comes a clean slate. That's as long as decision-makers can avoid the "nostalgic thing" and repeating past failures, said Lee Krueger, former St. Paul Port Authority president who oversaw many redevelopment projects like converting downtown St. Paul's Macy's into the Treasure Island Center for retailers and offices.

Many underused office buildings in Minneapolis are also exploring residential conversions. Sherman Associates is working on one at Northstar Center East, which received about $7 million in TIF money. Collison said a thriving Nicollet Mall would be an important anchor for downtown's future residents.

"The idea of Nicollet becoming more of a place rather than just a transit corridor ... more of a neighborhood, it's a compelling one," Collison said, "but it's a challenging one."