Downtown Minneapolis Office Market

[tedlanda2571]

Has there been any analysis published on the impact of office implosion on City of Mpls budget and by extension residential property tax burden?

[Tom H.]

"For the remedy read HENRY GEORGE"

[Silophant]

LaSalle Plaza has sold for a fire-sale price, which will apparently allow Hempel to make all sorts of improvements, some of which are good, some of which are terminally car-brained. I'm hoping they're motivated and able to fill in the retail spaces (and that the pickleball courts and whatever are slated for the interior vacant spaces, not the 9th and Hennepin street corner).

And now they've bought the parking ramp across the street (though not the hotel on top). Sounds like they're planning to make streetscape improvements on the block of LaSalle that they now control both sides of, but with these guys that probably means they'll try to add more car lanes.

[Bakken2016]

Rainbow Health is moving into the 701 Tower in downtown Minneapolis!


Sent from my iPhone using Tapatalk

[uptownbro]

Any word on the amount of space

[Bakken2016]

Any word on the amount of space

I can't find anything specifically on them, but suite 1400 directly below 1500 has 4,000 - 16,838 sq ft according to Officespace.

[uptownbro]

The company Zuru has bought 27k of office space from United properties within gaviidae commons. The space was there HQ before moving to the gateway. This includes the furniture. I don’t see a Minneapolis location on Zurus company site so this could possibly be a new office. They do a lot of work with target

[mplsjaromir]

Zuru the toy company?

[uptownbro]

Yes I believe so per the Star Tribune

[Silophant]

Sounds like they think there'll eventually be Target people downtown again to interact with.

[uptownbro]

Target claims that 35% of its downtown workforce comes into the office at min once a week

[twincitizen]

"At least one day a week" does not seem like a useful measurement, in terms of supporting restaurants and transit service. I'd be more interested to know what the percentage is for "at least two days" and "three days or more". It sounds like I wouldn't like Target's answer.

[uptownbro]

"7000" visits per week to the HQ campus from workers, contractors and facility workers is what they are claiming in the media. They are not sharing those other details at this time. I would guess that means of the 35% that are back they are in 1-2 days a week.

Per the biz journal the county is also not required to work in office.

[COLSLAW5]

I feel like the government jobs are hard because a lot of time they already are not paying as well compared to the private sector. Them offering full remote has to be a pretty big perk for getting employees and seems like it would be hard to go any other way

[twincitizen]

You're not wrong about the pay disparity between the private and public sectors (and the County seems to pay even less than the City for similar-type jobs, especially towards the lower end of the pay scale), but public employees also have guaranteed pensions and $0 (or very low) monthly healthcare premiums. Most private sector employees don't have pensions and pay significantly more out of pocket for healthcare. I say all of that to push back on the notion that a significant percentage of public sector workers are going to up and quit over going to the office 3 days a week. I just don't see that happening. There would be impacts on morale, some people would quit, others who complain to such a degree that it's disruptive to their teams might get fired, but the organization will be just fine in the long run. I don't think most public sector employees would even entertain the thought of going to the private sector. I, personally, am not about to walk away from a pension or my $0 healthcare premiums, even if I make $10-15k less than what I'd like to.

[VacantLuxuries]

I truly don't understand the motivation for otherwise non-affected people to try and browbeat organizations (public or private) into returning to downtown commuting.

It doesn't make the city any better by forcing city or Target employees to have to drive downtown, pay for parking, and order lunch five times a week out of convenience. The skyway sandwich shops would beg to differ, but they're still taking up retail space despite operating from 11am to 3pm, M-F. The institutional investors in downtown commercial real estate would beg to differ, but I really don't mind if some of their assets trade hands.

Bring commuting back to 2019 levels, five days a week. Street level retail will still be empty, skyway businesses will still close at 3pm and refuse to open on weekends. Suburbanites will still be frightened by mild displays of urban poverty and refuse to use public transit until it looks like a Disneyland ride.

I don't get the hyper focus on this issue by anyone other than real estate investors and restaurants that are unable or unwilling to adjust their business model away from only staying open four hours a day.

[uptownbro]

It helps the economic viability of the city. Even from a property tax and hotel tax stand point alone it is massive. Having 200k vs 20k individuals coming into downtown to spend money and time are an asset to the city. Even if only 5% of those 200k stay downtown for a happy hour, dinner ect thats 10,000 people spending money in the city.
That doesn't discount making downtown more then office workers, the very real issues with the skyway(and its hours) or some peoples view of the "city" who will never visit anyways. I would say part of downtown east and the north loops current success has been having a mix of residents and office workers
You truly think there is no added value to the city from target having thousand of employees downtown?

[VacantLuxuries]

There's value from a tax perspective, value to the parties I highlighted with a direct financial stake in the status quo returning, political value to people aligned with the Downtown Council, I don't doubt that you can find a lens through which a push for RTO has added value for the city.

But I think treating the people who previously worked downtown like interchangeable widgets, saying that they need to come downtown and spend money for the good of the city or find another job, is weird rhetoric and vaguely anti-worker. If I worked for Target and was hearing arguments like this, I'd be incredulous. I'd be upset that people were trying to change the arrangement I had with my employer so that retail businesses, businesses that have now had a full three years to adapt to the new normal and have chosen not to, would have me back as a captive customer. Especially if I was saving money and time by not having a commute anymore.

I think you're right that Downtown East and North Loop having a better mix of office and residential is fueling their success. Commercial real estate owners aren't going to come to that conclusion if they're allowed to manufacture consent to pressure everyone back to the 2019 status quo. They'd be perfectly happy for the same, unsustainably heavy focus on office returned, because they will profit less from residential conversions. It would be healthier for the CBC and Minneapolis in the long run if their demands for the 2019 status quo to return are rebuffed, and they're forced to adapt or go bust.

As for the skyway retail, if the people downtown are on the street levels for festivals, or trodding through the skyways on the weekends for sporting events or conventions, they'll have the choice to adapt to the newer markets that are passing through their corridors during non-lunch rush hours, or they can go out of business. They'll go out kicking, screaming, and blaming everyone but themselves as they do so, but they're the ones choosing to cater to a customer base that isn't there anymore. Nobody is forcing them to do that, and nobody is entitled to anyone's patronage.

[Nick]

https://www.cs.ucdavis.edu/~koehl/Teach ... _stops.pdf

[xandrex]

You're not wrong about the pay disparity between the private and public sectors (and the County seems to pay even less than the City for similar-type jobs, especially towards the lower end of the pay scale), but public employees also have guaranteed pensions and $0 (or very low) monthly healthcare premiums. Most private sector employees don't have pensions and pay significantly more out of pocket for healthcare. I say all of that to push back on the notion that a significant percentage of public sector workers are going to up and quit over going to the office 3 days a week. I just don't see that happening. There would be impacts on morale, some people would quit, others who complain to such a degree that it's disruptive to their teams might get fired, but the organization will be just fine in the long run. I don't think most public sector employees would even entertain the thought of going to the private sector. I, personally, am not about to walk away from a pension or my $0 healthcare premiums, even if I make $10-15k less than what I'd like to.

Yeah, I agree with this sentiment. In many ways, public sector workers are more captive to the whims of leadership than many private sector folks. Many enjoy working specifically for government (of my colleagues who have left, none have gone private) and public sector work comes with golden handcuffs: you have a pension available that pays out pretty handsomely if you stick around for a long time, low health insurance cost for high-coverage plans, generous time off, and decent pay (for what it's worth, I've found the county has some of the highest pay in the state for my particular field, but I can't speak for all jobs).

That's all to say, if the city or county wanted to call back workers, they absolutely could. It also seems like those two entities would see revitalization of the downtown core as something of a responsibility - their tax revenues rely on it!

It doesn't seem like the city or county have much interest in that though. The county has adopted a flexible work policy and more than a few folks have moved to their cabin up north or to warmer states. It would be hard to put that genie back in the bottle at this point.