“Downtown is very difficult for the businesses,” said Calgar Kisa, the co-owner of KISA Boutique, sitting in the heart of Gaviidae Common (one of the many defunct shopping malls) in downtown Minneapolis. His eponymous store was one of the few retail joints open on a weekday afternoon, the week before Christmas, and I couldn’t resist the sale on Turkish scarves. With nobody else in the store, we got to chatting.
“Even seven years ago, everyone was gone; just the department stores stayed around,” Kisa told me, explaining his story. “And now Marshalls and Saks Fifth, they are gone too. I’m the last small boutique now. Before COVID, there were hotels and office people around here.”
Needless to say, it’s been slow in 2022.
According to Kisa, it wasn’t just COVID that’s caused the change downtown. It was already underway, but COVID made the downtown retail problem far worse.
KISA Boutique is not alone. The recent closing of national retailers in downtown Minneapolis has rung alarm bells for downtown Minneapolis boosters. Earlier this month, Mayor Frey announced a “vibrant storefronts” work group, set to convene in January to address the decline of downtown retail.
Meanwhile in downtown St. Paul, a double-homicide erupted in the Central Station tower last week. It’s led to the the closure of the key link between the Green Line light rail and the city’s skyway system. The steps and elevator, once a shining example of the city’s commitment to public space, is likely to remain closed for months. It’s certainly a worrying sign for the interlinked worlds of transit, office workers, and downtown St. Paul’s economic rebound.
The downtown worker exodus
Despite the knee-jerk political reactions whenever you mention “downtown,” the thing that connects these problems is probably not what you think. Most downtown problems are a consequence of one fact: a small fraction of the people are there every day. COVID and technological change has decimated the downtown population that existed only a few years ago. Lacking that critical mass, downtown is missing what urbanist Jane Jacobs simply called “eyes on the street,” without which a whole bunch of social issues cannot be solved.
In my view, the only thing that will return downtown back to its pre-pandemic “normal” is a lot of new housing. Minneapolis should be looking to double its downtown population, and St. Paul should be looking to at least triple its number. Instead of throwing incentives at short-term security fixes, retail or convention boondoggles, or more stadia, planners and leaders should focus on building more downtown housing. That’s the only real fix for the long-term problems of our most important urban neighborhoods.
When you dig into the numbers behind the evacuation of the everyday downtown workforce, it’s a bit staggering. It’s challenging to nail down precise data, because “downtown” means different things to different people. But before COVID, downtown Minneapolis had about 200,000 daily workers and a residential population of around 50,000 people. St. Paul’s numbers were 50,000 workers and 10,000 residents. In both cases, it was the everyday workforce that generated the lion’s share of street life and economic activity.
That’s why COVID changed everything. Despite the sanguine reports from the Minneapolis Downtown Council, the long-time business boosters who basically run downtown Minneapolis, workers are not coming back. Even if they are, it’s certainly not every day, and not in the same numbers. While the Council’s “reanimation” page suggests that “building occupancy” is back near 60%, they neglect to mention that the vast majority of those returning workers are infrequent. Even with a small-scale work-from-home (WFH) policy, that still amounts to a 50% reduction in the downtown population.
Every bit of anecdotal information I’ve gleaned over the last two years suggests that most workplaces have far more lenient approaches. My best guess is that the downtown everyday populations are a third of their former selves, on any given weekday. That’s brutal math for a small business.
And everyday workers are not going to be coming back. Ask people about their job patterns, and anyone with a choice in the matter — especially white-collar workers with the highest disposable incomes — people rarely come to the office. One manager I spoke with about this told me, “even if I wanted to, I couldn’t make my staff come in. I want to keep them.” With no end in sight to the tight labor market, work from home is not going away. Downtowns are going to have to pivot big time.
How to fix downtown
One key problem is that generations of downtown planning have centered on this now-missing population: the white collar commuter. These long-term investments and planning decisions are not easy to change. A large percentage of downtown’s social and physical infrastructure, from parking lots to lunch spots to bus and freeway networks to the entire skyway system, were predicated on the daily movement of commuters into and out of the core city. If those everyday people are never returning, how should downtown reorient itself?
A short list would include:
- No road capacity expansions or parking lots
- Building more infill housing, as many places as possible
- Office-to-residential conversions, especially Class B and C properties
- Reallocation of transit infrastructure and service to all-day routes instead of commuter peak-hour
- Focusing economic development on residential populations
Without tens of thousands of people back downtown – not just for events, but every day – our downtowns are likely to be plagued with crime problems and “vacancy” signs hanging in half of the windows. Other than housing, nothing else that will do the trick.
Downtown Minneapolis boosters should probably count themselves lucky, because they’ve been adding housing for a decade, with the downtown residential population growing by a third in the last ten years. That makes them a lot more resilient to the kinds of long-term disruption provoked by COVID and WFH technology.
By contrast, St. Paul has it worse. Its downtown relies on government employment, where for a variety of reasons HR typically offers the most flexible policies. The acres of government office buildings at the north edge of downtown St. Paul are likely to be everyday ghost towns for a decade to come.
The last Holidazzle and the end of an era
If I’d known how good downtown had it back in 2019, I’d have savored it more: the relative crowds of people, the dozens of skyway Caribous, the lingering department stores. It’s a far cry from downtown Minneapolis and St. Paul today.
When the last Holidazzle parade was held downtown Minneapolis back in 2013, I trekked with a group of friends down to Nicollet Mall to witness the end of an era. The whole fixation on downtown department stores is confusing to a millennial, let alone a whole parade revolving around employees dressed in lightbulb costumes.
It’s not surprising that retail is always changing. Especially downtown, where the automobile (especially) has proved poisons to the entire business model, keeping retail alive has been a challenge for generations. Department stores are alive and well in other countries, where they’re seamlessly integrated with large urban transit stations. Here in the U.S., with a half-century of dismal transit ridership, how could they have ever kept pace with suburban malls and the internet?
“People downtown, their mood is different,” explained Kisa, working the week before Christmas at his European boutique. “It’s depressive. They don’t have a shopping mood; they have a working mood. They’re just busy, and say ‘I need to go home for the kids.’ I feel nobody can survive downtown in the retail business.”
That’s not going to change until we bring a critical mass of people back into the city. The only way that’s happening is with more housing, people living downtown and spending every day at the center of the city. Until then, the outlook for the downtown skyways and shops remains grim and getting grimmer.