This article first appeared in the Minnesota Shopping Center Association’s May 2012 newsletter.
After some very quiet years, new retail development is happening again in the Twin Cities. The local developers who hung on during the last economic downturn have begun to plan and build – though in whole new ways. Redevelopment is the name of the game. Mark Schoening, Senior Vice President of Ryan Companies, stated, “I think there’s clear evidence that the retail development market has improved as we move into 2012, but it continues to be very selective, with respect to both retailers and sites.” In surveying local developers, many echoed Mark’s sentiments. Here’s what we found out:
CSM is making news with their redevelopment of the 51-acre Lockheed site in Eagan, planning Central Park Commons. They are proposing over 500,000 sf of retail, with rumors of a Target supercenter as an anchor. Paragon Outlet Partners is interested in redeveloping in the Eagan Cedar Grove Redevelopment District with a 425,000-sf upscale outlet, including 90 to 100 stores in an open-air mall. Schaefer Richardson is looking at Eagan with a bank conversion to a retail drive-through use. Oppidan has a new 7,000-sf retail building planned at Cliff & Rahncliff Road.
Over in Apple Valley, Cub Foods has decided to downsize their building, and Oppidan is offering two new outlot opportunities. Oppidan is also working with the city of Savage on a new sports complex.
In Shakopee, Ryan has added 18,000 sf for a new JoAnn Fabrics store in their Dean Lakes development.
The Richfield/Edina/North Bloomington area has several new developments in various stages of planning and construction. Cornerstone purchased the Lyndale Garden site in Richfield; their plans are to utilize the existing 47,079-sf building and greenhouse for retail, and add up to 120 units of housing near Richfield Lake, as well as some public spaces. Wellington is redeveloping the former Kmart site on Lyndale & 66th in Richfield and has 73,000 sf of new retail for a new LA Fitness and additional restaurant and shop space currently under construction. United Properties has the Penn & American development under construction with 234 mid-to-luxury apartments and town homes and approximately 50,000 sf of retail and restaurant space. The end cap of the Centennial Lakes retail center was torn down and a new Whole Foods was constructed and opened this April. A new CVS/pharmacy is under construction on york in Edina.
Solomon is excited about their planned development at the corner of Highway 7 & Blake Road in Hopkins. It is an assemblage of properties for two 6,000-sf retail buildings, and has already generated leasing interest.
HJ Development has purchased the former Saturn dealership at I-394 & Louisiana in Golden Valley, and is planning small shops and service-oriented retail along with a medical office building on this five-acre site. They plan to start construction this fall.
Kraus-Anderson has two redevelopments planned, including a new CVS/pharmacy with 13,000 sf constructed at the Midland Center at Medicine Lake & Winnetka in New Hope. They are also building a new 12,000-sf center this spring at Highways 101 & 212 in Chanhassen, along with a Primrose Daycare, with the balance of the 45,000-sf mixed-use project built in 2013.
McGough has a mixed use project in Inver Grove Heights – Argenta Hills. Anchored by a SuperTarget, it will comprise 400,000 sf of retail space and residential.
Whole Foods is planned for the former Jaguar site on Hennepin Avenue in downtown Minneapolis. Ryan Companies is redeveloping the site, which will include residential units above the store. Wellington is adding another 5,000 sf to their Hi-Lake shopping center on Lake Street in Minneapolis. Oaks Station Place is under construction at Hiawatha & 46th in Minneapolis and will include up to 9,000 sf of retail space along with rental housing. It will incorporate the light rail station on their site.
Minneapolis Uptown is also a hot area for redevelopment. Ackerberg has their MoZaic mixed use project under construction with a 7,500-sf Bar Louie restaurant and 3,500 sf of additional retail. Andrew Dahl of Ackerberg says they are also expecting to have additional retail opportunities in Uptown/Lyn Lake and North Loop areas yet this year. The Walkway is planned by Clark Gassen at the corner of Lake Street & Girard (currently home to Cowboy Slims). The Walkway would be a six-story building with street level retail/restaurant space. Mid-America demolished an old garden center at the Uptown Whole Foods-anchored center and built a 4,400-sf strip center with My Burger, yogurt Lab and Sports Clips.
Walmart is the big box retailer under construction this year. They have Twin Cities stores under construction in Burnsville (I-35W & Cliff Road), Lakeville (I-35W & County Road 70), Brooklyn Center (Highway 100 & 10), Princeton (County Road 95 & Highway 169), as well as St. Cloud. Their stores will open in either late 2012 or early 2013. They are also proposing stores in Andover and Cottage Grove.
Menards is also spending their construction dollars. The tear-down and construction of their new store in Golden Valley is completed and open. They demolished the Menards in Richfield with a new store planned for later 2012.
The Brooklyn Center redevelopment with Walmart is at the former Brookdale regional mall, and includes 800,000 sf of redevelopment. Demolition happened last fall, and construction is in full swing, with the center ready for tenants in spring 2013. Bruce Carlson, Project Director for Mid-America, the leasing agent for the project, says, “We are seeing a definite increase in new development activity for 2012 with our clients, along with many of our owners considering expansions. Several projects are underway with the city processes and planning for 2012-13, including Midway Corners at Hamline & University in St. Paul.”
Reliance Development had redeveloped the former Target site in Maple Grove on Highway 30. They are adding 13,000 sf for Valvoline and Discount Tire this year.
Wellington has plans for the Tartan Crossing (former Oakdale Mall) in Oakdale. This 14- acre site has 10 acres slated for retail development construction in early 2013.
United Properties is breaking ground later this summer with a 30-acre grocery-anchored development at the southwest corner of Radio Drive & Baily Road in Woodbury. Across the street from the Bielenberg Sports Complex, United Properties will construct this 140,000-sf shopping center as part of a new master planned community. Retailers will
open summer of 2013.
Keith Ulstad, Senior Vice President of United Properties, is optimistic but cautious about retail development going forward. “In 2011, the Twin Cities retail development community got back on its feet and dusted itself off. 2012 is not yet ‘business as usual;’ but we are back out looking at deals and talking with retailers. We are trying to create projects under a new paradigm of lower rents, more stringent underwriting, and stiff competition for the pool of active tenants,” said Ulstad.
Deb Carlson is a dynamic commercial real estate professional with a successful track record in grocery-anchored development projects. She has an extensive background working with large and small retailers and is well known for her client-oriented approach. As a member of Cushman & Wakefield/NorthMarq’s retail team, Deb represents both landlords and tenants in their real estate dealings. She has handled transactions on behalf of well-known national retailers such as Toys R Us, Ace Hardware and The North Face and Room and Board, as well as prominent regional retailers such as Cooper’s County Market stores and Kowalski’s upscale supermarkets.