Block E owner Alatus has hired an urban retail specialist to help revitalize the struggling downtown Minneapolis development.

Bruce Kaplan, a senior vice president at the Chicago office of CB Richard Ellis, was tapped about six months ago and has since begun extensively researching the area surrounding Block E-which now has a 28 percent vacancy rate and has seen numerous tenants leave over the past several years.

By this summer, Kaplan expects to have a strategic plan that's ready to be executed in order to rejuvenate the development.

Kaplan-who has worked on high-profile projects on Michigan Avenue and across the country-said he doesn't know yet precisely what the plan will include, but a facelift will definitely be among his recommendations.

“It is a remarkably ugly building today,” he said about Block E, which Minneapolis-based Alatus bought from the Union Labor Life Insurance Company (ULLICO) in July. At the time of the acquisition, Alatus Principal Bob Lux said the firm's goal was to create a property that complements the surrounding neighborhood.

According to Kaplan, Block E has a lot going for it-including the location and the heavily trafficked skyway system connecting it to other downtown buildings. “In Chicago, everyone wants to be on the first floor because it's closer to the street,” he said. Here, tenants essentially have two first floors because the skyway brings enough foot traffic to make the second level an equally prime retail spot.

In an ideal scenario, the development would link the area's sports venues-including Target Field, the vibrant central business district, and the lively restaurant and entertainment scene, Kaplan said.

“You can't change where a piece of real estate is located. Fortunately, Block E is in a very good location,” he said. “For that reason and that reason alone, if properly positioned with the right tenants and the right appearance, it can be something that is exciting and is a pure asset to the downtown area.”

What Kaplan wants to avoid is using a “one-size-fits-all” approach-which is precisely what he thinks previous owners did. “The mistake made here is somebody applied a formula to Block E-put movie theaters, a bookstore, and restaurants, and people will come,” he said. The key is to determine what the market already has in place and the voids that exist, he said.

He's using various approaches to try to do just that-talking to stakeholders and residents about the area, studying demographics and psychographics, and fully exploring the strengths and weaknesses of the downtown area and the development itself.

Kaplan believes that Minneapolis is on the cusp of joining the likes of New York, Chicago, and a select few other cities that have “highly energized central business districts.” The big component that's missing from that equation is more residential development. He expects to see lots of it spring up in the coming decade and insists that the demand is there-particularly among young people who want to live close to work.Kaplan said that missing residential piece would turn the area into a 24-hour downtown.

The First Avenue side of Block E is anchored by Kieran's Irish Pub, which moved to the site in March. Other tenants include The Shout House, Kerasotes ShowPlace Theatres, and Applebee's. The $149 million Block E development has struggled since it opened in 2002 with the help of a $39.1 million subsidy from the City of Minneapolis. Many of the project's tenants-including GameWorks, Borders, Bellanotte, Hooters, and Snyders Drug-have left.

In January 2010, the project's original developer, Chicago-based McCaffery Interests, Inc., turned over Block E ownership to ULLICO. McCaffery said at the time that the project would require significant investment and that ULLICO was in a stronger position to provide the necessary funding.