Lake & Nicollet Redevelopment (Kmart site)

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Re: Lake & Nicollet Redevelopment (Kmart site)

Postby Wedgeguy » November 11th, 2015, 10:58 am

TroyGBiv wrote:I had Kmart as a client from 1997 to 2001 (Campbell Mithun wad their ad agency then) and they were discussing this location with the city of Minneapolis at that time. I had bought my house here in Whittier in 1998 and actually met with Kmarts VP of Real Estate then to give him some background on the neighborhoods concerns. They have held the position that it is a profitable store for yhe last 20 years, in part due to the complete lack of competition and to not investing any money in that location. They were updating stores to Big Kmarts all over the country at that time but took that location off the list because they felt that they could negotiate a great deal with the city and potentiak developers. The land is owned by an east coast real estate company and kmart is not interested in investing in a rental property... plus the CEO of Sears has been bleecing kmart to prop up Sears stores. Ultimately - kmart will never be a good partner in this future development - it is not in alignment with their current management and "growth or operational strategies.
That has been pretty much what I have heard over the years. We are making money and it is not our issue. Only when the city forces their hand will they really commit to spending the money. So far the city really has not. They can talk a good game, but don't seem too ambitious about the follow thru.

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Re: Lake & Nicollet Redevelopment (Kmart site)

Postby Blaisdell Greenway » November 23rd, 2015, 8:15 am

Elizabeth Glidden is speaking about reopening Nicollet at the Lyndale Neighborhood Association meeting TONIGHT at Painter Park! 6:30-8:00

Neighborhood is also voting on the AMP House aka the Garfield Aquarium redevelopment. Sensible urbanist perspectives are highly welcome in a sea of NIMBYs.

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Re: Lake & Nicollet Redevelopment (Kmart site)

Postby twincitizen » January 6th, 2016, 3:58 pm

Reopen Nicollet Avenue Workshop #4
TONIGHT, Wednesday, January 6 at 6:00 PM

City of Lakes Waldorf School
2344 Nicollet Ave S

https://www.facebook.com/events/1051776108207234/

During this workshop, Cuningham Group will host an interactive exploration of design concepts for the study area. Participants will have the opportunity to see the design react to their comments as the session progresses.

EDIT: Did anyone go? I went to the previous meeting but couldn't make it last night. I will attend the 'summary' meeting at the end of January.

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Re: Lake & Nicollet Redevelopment (Kmart site)

Postby PhilmerPhil » February 15th, 2016, 12:33 pm

With Walgreen's rapidly replacing their stores throughout the city, there are only a few left that have yet to be rebuilt, including the one on Lake and Pillsbury. Semper, the developer that has redone many of the locations around the city and is working on the 27th & Hennepin location, tried to purchase the Supervalu site and build a Walgreen's at Lake and Blaisdell, but that fell through.

Without a doubt, they have to be scouting the immediate area, which has me concerned. Lake St east of LynLake is not a pedestrian overlay district, so they could theoretically do exactly what they're doing with the Roat Osha/FirstTech site--buy up an existing commercial building on Lake, tear it down, and put up a single story building with a drive thru and large parking lot.

I wouldn't be surprised to see plans for the Champion's site or perhaps this building show up in the next few months. I'm hoping that the upcoming discussions at city hall related to drive thrus and PO district expansions will prevent another 27th & Hennepin situation at this part of Lake Street.

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Re: Lake & Nicollet Redevelopment (Kmart site)

Postby PhilmerPhil » April 26th, 2016, 12:53 pm

A proposal to redevelop the Champions site into a single story New Horizons Academy is going to be discussed at the next Lyndale Neighborhood Housing Committee.

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Re: Lake & Nicollet Redevelopment (Kmart site)

Postby mnmike » April 26th, 2016, 1:57 pm

Eh, that doesn't sound like a super permanent use...probably not a big deal.

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Re: Lake & Nicollet Redevelopment (Kmart site)

Postby twincitizen » May 3rd, 2016, 1:56 pm

SW Journal on New Horizon: http://www.southwestjournal.com/news/bi ... blaisdell/

They are reusing and expanding the existing building. Given that dirt may not move on the Kmart site for many years, I really don't think this should be looked at as a negative in any way. I'd feel differently if it were a total scrape and rebuild, as that would probably lock in the low-intensity land use for a more permanent amount of time. As is, I think this is a very positive development for the area.

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Re: Lake & Nicollet Redevelopment (Kmart site)

Postby PhilmerPhil » May 3rd, 2016, 2:14 pm

Agreed. I was nervous at first that it would be a complete rebuild, setting the tone for the the next couple decades, but it's just a reuse and will be a huge improvement over the current state.

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Re: Lake & Nicollet Redevelopment (Kmart site)

Postby zlkahn » June 21st, 2016, 2:12 pm

From the Star Tribune on New Horizons: http://www.startribune.com/child-care-c ... 383836831/

Looks like they are targeting opening in November.

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Re: Lake & Nicollet Redevelopment (Kmart site)

Postby Archiapolis » January 5th, 2017, 10:00 am


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Re: Lake & Nicollet Redevelopment (Kmart site)

Postby talindsay » January 5th, 2017, 10:34 am

Craftsman tools were the only remaining reason for me to go to Sears - they're exceptionally good tools for the price, much better than the garbage you find at the big-box home improvement stores and about on par with the mid-range hand tools sold by specialty auto stores. By selling off Craftsman I think they're signaling that they're done, they're just going to ride out the end as long as they can. Interesting the 15-year clause - giving themselves a nice slowly-deflating air bag as their head hits the steering wheel.

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Re: Lake & Nicollet Redevelopment (Kmart site)

Postby mattaudio » January 5th, 2017, 11:16 am

Craftsman were already sold at Kmart, Ace Hardware, etc. And much Craftsman was garbage for recent years. As far as house brands go, I've had more consistent quality with Husky at Home Depot or Mastercraft at Menards (seriously, Mastercraft is good! Just stay away from all the other Menards house brands).

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Re: Mall of America - Bloomington

Postby MNdible » January 5th, 2017, 12:48 pm

twincitizen wrote:With the Kmart/Sears closings news, here's a fun bet: Which closes first? Sears at MOA or Lake Street Kmart? We have to assume Sears at MOA is a massive loss leader. I mean, is anyone actually shopping there? Sears owns their building. I imagine they'd be out in a heartbeat if a mystery department store stepped in to open at MOA - problem is that just isn't likely. MOA itself isn't going to step in and buy them out like they did Bloomingdales.
Lake Street K-Mart represents an opportunity to extract cash from the city, and from what we've heard about their lease terms, they're effectively getting to use that location for free, so they'll keep that operating down to the bitter bitter end.

EDIT: And in spite of everything, whenever I go in there, it's actually busy.

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Re: Mall of America - Bloomington

Postby mattaudio » January 5th, 2017, 12:53 pm

True, but remember that Sears/Kmart spun off their real estate into a separate holding company or REIT. And recent news reports suggest that Sears/Kmart aren't obligated to continue leasing from Seritage Growth Properties. That's probably better for these sites, since you could have the REIT realize they aren't served by Sears/Kmart, or you could have Sears/Kmart deciding they can no longer afford to continue leasing from the REIT.

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Re: Mall of America - Bloomington

Postby MNdible » January 5th, 2017, 1:02 pm

I'm assuming that's only true of real estate that Sears/Kmart owned, but wasn't the Lake Street site already owned by a third party and leased to Kmart under lease terms that run back to the 1970's?

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Re: Mall of America - Bloomington

Postby MNdible » January 5th, 2017, 1:04 pm

It happens that both the St. Paul Sears store and the Lake Street Kmart are mentioned in this recent MinnPost article, and while it's not made completely explicit, you can see that the circumstances between the two are quite different.

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Re: Lake & Nicollet Redevelopment (Kmart site)

Postby TroyGBiv » January 8th, 2017, 10:06 pm

If the transit plan with street cars moves forward the city can condemn the land for that use and just purchase the land for market value. Kmart lease is with the property owners - it is my understanding that it would be rendered null and void - though there would be legal challenges and some compensation. But transit priorities have the full power of eminent domain.

Plus, It is very likely that Sears Holdings (and Kmart) is on the brink of bankruptcy (read Bloomberg and BusinessWeek today)... The CEO/Chairman is Lambert and he is all about selling the land to recoup his multi -billion dollar invest,net and taking the retailer to an online retail business under the "Shop your own way" name.

I don't think that it is going to easily flip over to the city, but this CEO is a train wreck, and has a back plan to cash out soon.

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Re: Lake & Nicollet Redevelopment (Kmart site)

Postby twincitizen » January 9th, 2017, 9:32 am

TroyGBiv wrote:Kmart lease is with the property owners - it is my understanding that it would be rendered null and void - though there would be legal challenges and some compensation.
If the city moves ahead and purchases the property this year, I highly doubt that just invalidates Kmart's lease. Their below market-rate lease (through 2053!) is the sticking point of this entire process. Kmart talking about wanting to be a part of the redevelopment is likely just posturing to get a higher buyout settlement if/when the city prematurely ends the lease. As you note, there might not be a Kmart corporation around at all by the time the redevelopment happens. There's no doubt in my mind that, despite Kmart saying this store is highly profitable, that is mostly/entirely due to the very affordable lease terms. Reading between the lines, Kmart has no actual interest in re-opening in a future mixed-use development on this site, because they wouldn't be able to afford the rent.

The city should buy the property, as they have already agreed to preliminary terms ($8MM), and continue leasing to Kmart until they inevitably go under. There's probably little need to force Kmart out early or agree to some early buyout giveaway. Despite the affordable long-term lease, if this becomes the last Kmart operating in the state, I predict that the supply chain breaks down to the point where they can't continue. That or Kmart as a whole ceases to exist in <5 years.

Why spend taxpayer dollars on an early buyout agreement that would be a double whammy of negative press? Using the public's dollars to kick out a "successful" business and also harming the locals that shop and/or work at Kmart today would not look great. I'd rather the city purchase the property and act like it's negotiating Kmart's future role in good faith, all the while knowing that they won't be around in 5 years. Even if the city can't shorten Kmart's lease or increase their rent, they can make life hell for Kmart in other ways. Lake Street reconstruction in front of the store (and at 35W) over the next few years is one way.

The timing around this could shape up to be a perfect storm for the city. Had this redevelopment happened 5-10 years ago, the city probably would have wound up requiring a developer to create a big-box spot for Kmart that would soon be vacant when they inevitably closed. Instead it looks like Kmart will hold on just long enough to see the city buy the property and perhaps not have to do much/any financial coaxing to get Kmart to leave their lease. Kmart will not be a part of the future redevelopment here, I'm quite certain of it.

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Re: Lake & Nicollet Redevelopment (Kmart site)

Postby TroyGBiv » January 9th, 2017, 5:08 pm

Twincitizen - I think you really perfectly assessed how this will play out.

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Re: Lake & Nicollet Redevelopment (Kmart site)

Postby aeisenberg » January 9th, 2017, 8:52 pm

twincitizen wrote:
TroyGBiv wrote:Kmart lease is with the property owners - it is my understanding that it would be rendered null and void - though there would be legal challenges and some compensation.
If the city moves ahead and purchases the property this year, I highly doubt that just invalidates Kmart's lease. Their below market-rate lease (through 2053!) is the sticking point of this entire process. Kmart talking about wanting to be a part of the redevelopment is likely just posturing to get a higher buyout settlement if/when the city prematurely ends the lease. As you note, there might not be a Kmart corporation around at all by the time the redevelopment happens. There's no doubt in my mind that, despite Kmart saying this store is highly profitable, that is mostly/entirely due to the very affordable lease terms. Reading between the lines, Kmart has no actual interest in re-opening in a future mixed-use development on this site, because they wouldn't be able to afford the rent.

The city should buy the property, as they have already agreed to preliminary terms ($8MM), and continue leasing to Kmart until they inevitably go under. There's probably little need to force Kmart out early or agree to some early buyout giveaway. Despite the affordable long-term lease, if this becomes the last Kmart operating in the state, I predict that the supply chain breaks down to the point where they can't continue. That or Kmart as a whole ceases to exist in <5 years.

Why spend taxpayer dollars on an early buyout agreement that would be a double whammy of negative press? Using the public's dollars to kick out a "successful" business and also harming the locals that shop and/or work at Kmart today would not look great. I'd rather the city purchase the property and act like it's negotiating Kmart's future role in good faith, all the while knowing that they won't be around in 5 years. Even if the city can't shorten Kmart's lease or increase their rent, they can make life hell for Kmart in other ways. Lake Street reconstruction in front of the store (and at 35W) over the next few years is one way.

The timing around this could shape up to be a perfect storm for the city. Had this redevelopment happened 5-10 years ago, the city probably would have wound up requiring a developer to create a big-box spot for Kmart that would soon be vacant when they inevitably closed. Instead it looks like Kmart will hold on just long enough to see the city buy the property and perhaps not have to do much/any financial coaxing to get Kmart to leave their lease. Kmart will not be a part of the future redevelopment here, I'm quite certain of it.
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