Blue Light Special: Minneapolis Buys Kmart at Lake and Nicollet
Minneapolis finally got the green light to tear down the Kmart store that blocks the intersection of Lake Street and Nicollet Avenue—a nuisance for decades.
In a struggle that has spanned practically 40 years, the city of Minneapolis has reached an agreement with the retailer to buy out its lease for $9.1 million. The agreement marks the end of a shopping era: this is Minnesota’s last remaining Kmart.
And many city officials would say, it never should have been built at Lake and Nicollet, blocking a key intersection the city plans for redevelopment.
Expected to be approved on March 13 and officially signed on March 17, the lease termination agreement would finally clear the path towards reopening Nicollet, which has been a major priority for the city for decades.
“Getting the land for the street has been the number one reason that we have been working on this for so long, and have spent and propose to spend all this money,” said David Frank, director of Minneapolis’ Community Planning and Economic Development Department.
The store’s lease was set to expire in 2053, but the agreement would leave the space vacated on or before June 30.
“I have spoken to all the council members, and I do think there will be substantial support for the recommendation that we’re making,” he said. “I’m hopeful that they agree that it’s the right thing to do. And the mayor is very supportive.”
The process of demolishing the site and establishing a new street and development vision would be anticipated to start later this year, but other timeline information is not yet estimated.
“It’s not every day we get to design a brand new street from scratch,” Frank said. “This will be something more than a symbolic reconnection of neighborhoods and commercial areas to other parts of the city.”
This Kmart location, which opened back in 1977, has held up the redevelopment of Nicollet Avenue. In 2017, the city became Kmart’s landlord when it paid $8 million to purchase the land. But Kmart held tight to its lease, which wasn’t set to expire until 2053. The latest round of negotiations for the lease buyout started about two to three months ago, Frank said, shortly after Sears Holdings filed for bankruptcy.
“For many people Kmart is a value priced retailer that is close to where they live or work or are, and they may well be sorry to see it go. That said, I’ve heard from people who do shop there, who value it as a retailer, who will be sorry to see it go, who will be glad to see it go in its physical configuration,” he said. Adding that he expects there will be retail in the new space.
Funds for the buyout are proposed to come from the city’s funds generated from a legislative tax plan aimed at getting a streetcar onto Nicollet. Other funds for demolition will come CPED, and the community engagement will be encapsulated in the city’s normal operating budget.
The holding company, Transform Holdco LLC, announced at the end of August last year that all of the other Kmart stores in Minnesota were to close, leaving the Nicollet Avenue and Lake Street store the only one left. The employees at the store found out today, Frank said. Kmart declined to comment.
“Minneapolis should celebrate just a little,” Frank said. “I mean there’s plenty of work to do, but we accomplished a thing. We’re at a milestone here. And that’s a big deal.”