As retail evolves on St. Paul’s Grand Avenue, focus should be on the future — including walkability and housing

If there’s one constant about the retail sector, it’s change. Consolidation, online shopping, price gouging, loss leaders, tax subsidies, consumer tastes, post-pandemic habits, too many stores, parking and a dozen other factors make for cannibalistic madness surrounding the art of selling things to people. It’s no surprise that stores are constantly going in and out of business, especially when competing for inflation-adjusted dollars.

This churn poses problems for cities, where broad-scale policies like zoning or incentives can be out of step with market demands or customer behavior. The latest development is the ongoing closure of much of the chain retail along St. Paul’s Grand Avenue, long the city’s most celebrated commercial shopping street.

With the announcement that the Pottery Barn on Grand and Victoria is soon closing up shop, that leaves zero tenants in the large Victoria Crossing building. Pottery Barn joins a long list of evacuation: J Crew, Pier 1 Imports, Creative Kidstuff, Ann Taylor, Lululemon, Anthropologie, Bibelot and even J.W. Hulme, a high-end, once-local leather maker that went out of business earlier this year.

“I think we’re seeing that the 1990s approach to retail is a broken model at this point. Grand Avenue has been telling us that for 15 years at least,” said Dan Marshall, who owns Mischief Toy Store near Grand and Victoria. “That model was speciality medium-box stores like Pottery Barn, where it’s a formula business.”

Despite doing exhausting business this time of year, Marshall has been frustrated by the ossified nature of the street. For example, the local business association, GABA, spends much of its energy on the annual Grand Old Day parade, which doesn’t necessarily benefit retail businesses. Many shops simply close during the event, which does not equate to steady customer flow. (Bars and restaurants are another story.)

These days, retail is different, Marshall assured me.

“I don’t think most people would recommend that anybody go into retail as a way to build wealth or get rich,” Marshall said. “Those days are maybe kind of done. The barriers to entry have gotten a lot higher as rents have gotten higher. It’s a lot harder to start an independent retail store than it was when we started in the late ’90s.”

Alongside higher rent, the competition from online shopping forces tough decisions on small retailers. Marshall points out that, while businesses like his and the children’s bookshop across the street can buck the trend by “carving out an interesting niche,” many other kinds of shops have seen profit margins disappear. For Marshall, the big thing missing on Grand Avenue is density and walkability.

“Most people would point to parking as the biggest hurdle; I don’t believe that,” said  Marshall. “Most places with a vibrant shopping district are hard to park — that’s the sign of a cool place to be. But on Grand all we ever do is talk about parking; we don’t ever talk about walking, biking or zoning.”

The East Grand Overlay

Any handwringing over the loss of Pottery Barn would be ironic given the longer history of the street. When the plethora of chain stores along Grand Avenue first emerged in the late 1990s and early 2000s, it set off alarm bells for business owners and community members concerned about neighborhood character. The city responded by putting in place targeted zoning rules meant to keep chains out of this part of St. Paul by limiting density.

“It’s hypocritical to be [upset] about Pottery Barn leaving when the East Grand Overlay (EGO) is put into place to prevent Pier 1 and other businesses from being there,” explained Ari Parritz, the newest board member of GABA. The rules limit the size of new buildings along a mile-long portion of the street. A year ago, the city convened a task force aimed at changing the EGO a few years ago, but nothing substantive came from it.

Retail vacancy is a bigger problem than Grand Avenue. For example, there’s a new trend of large retailers like Target or CVS abandoning “urban” locations. (See also: Snelling and University.)

As Fred Melo recently described in the Pioneer Press, many of the largest retail properties are controlled by a troubled out-of-state pension fund for retired teachers in Ohio. Like many national investors, they view Grand Avenue with an unsentimental eye, and many properties have been vacant for years. It gives the street a bleak pall that mirrors concerns downtown and elsewhere.

That might be changing, once the chain stores are gone completely.

“It’s not that the neighborhood gets to decide; the market decides,” explained Ari Parritz when describing the street’s retail potential. As you’d imagine from someone who just built a building on the street, he’s optimistic about retail coming back to Grand Avenue.

“Right now, the market and the residents’ desires are pretty closely aligned around food and beverage, in 2,000- to 4,000-square-foot spaces,” Parritz told me. “These are things you patronize every week instead of once a year. How often are people going to buy stuff at Pottery Barn?”

Larger spots like the Pottery Barn location and some of its neighbors are in the midst of what’s called “demising,” where the building owner breaks up or repurposes space. Parritz predicts that properties like the Pottery Barn footprint, with its attached parking ramp, could be tempting for something like a grocer. Elsewhere, though, he thinks it’s more likely that a new building could be constructed.

As I wrote back in 2021, when Parritz’s development proposal was first put on the table, the idea of adding housing to Grand Avenue is long overdue. There’s been almost zero new apartments on the eastern half of street in 20 years. After a close and controversial vote, Parritz’s Kenton House project is now complete. Two of the three original businesses — the restaurants Saji-Ya and Emmet’s Pub — have reopened and look and feel much the same. Meanwhile, a hundred new people are living on what was once air over a surface parking lot.

To my eyes, the new building blends in just fine with the century-older apartments across the street. Leasing is going well, and it’s at 60% occupancy after just a few months.

“Anybody can open their eyes, and there’s four, five or six other sites that would probably be good candidates to have a new building,” said Parritz, referring to shuttered retail sites. “Some new development that has apartments above and retail on the first floor; Grand doesn’t have much and could have more.”

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The other big problem is that Grand Avenue is still not quite walkable. If you don’t believe me, just try to cross the street; a driver who stops for you is a rare duck. As I wrote in 2021, the most successful part of Grand is also the spot where traffic is most calmed, the corner of Grand and Victoria where leading pedestrian intervals (LPIs) keep speeds well below 20 miles per hour. If it were easier to cross the street in more places, people might not complain about parking as much. After all, plenty of people seem content to walk around a mall.

Dan Marshall, of Mischief Toy Store, even suggests big ideas like angled parking or bike lanes, both of which would narrow the travel lanes. The idea is to slow cars down, improving the quality and safety for people on the sidewalks and encouraging more shopping and connecting along the avenue.

“I think that if Grand has a future as a retail destination, we need more people living there,” said Marshall. “We need to reimagine the entire avenue in a way that promotes walking and promotes exploration and slows down cars. And we gotta do it in a way that avoids years and years of arguments with old ideas and old-fashioned notions of what Grand is. We need to look to the future.”