The demolition of the former Kmart building blocking Nicollet Avenue — a dream held for decades by some Minneapolis leaders and residents — will be on hold for a bit longer. 

In August, the city extended a temporary lease for the U.S. Postal Service, which has been using the building as a temporary post office since last summer, until March 2023, though the deal also provides the option of two three-month extensions. The original lease was to end at the end of 2022. 

In 2017, following years of work by Minneapolis residents and leaders, Kmart’s parent company, Transform Operating Stores LLC (formerly Sears Holding Corp.) agreed to terminate its lease and vacate the building. That was the last big puzzle the city needed to solve before clearing a path to a demolition of the building, which the city originally planned to do in December 2020. 

Then, during unrest following the death of George Floyd, the Lake Street and Minnehaha Post Offices burned down, and the city and USPS agreed to use the Kmart building as a temporary post office.

The site lease was signed July 31, 2020, and allowed for USPS to use the building for up to 24 months. That meant demolition of the Kmart site wouldn’t happen until 2022 or early 2023, the city said at the time. 

The city’s recent extension of the terms of the lease go until March 2023, though USPS could be there even longer. According to the city, if Community Planning & Economic Development Director Andrea Brennan so chooses, the lease can be extended to June 30, 2023, and again to Sept. 30, 2023.

“At the earliest, demolition would start December 2023,” Minneapolis Marketing and Communications Manager John Louis wrote in an email.

Getting rid of the former Kmart, which has blocked Nicollet Avenue between West 29th Street and Lake Street since 1977, has been a deeply held passion for some Minneapolis residents and officials for just about as long as it’s been around — even if the location was a highly profitable one for Kmart and much-used commercial hub for those in the surrounding neighborhoods. 

The land deal and lease termination deal cost the city $9.1 million in 2017. That money came from a special tax district established to raise money for a proposed 3.7-mile streetcar on Nicollet and Central avenues. The tax district gives the City Council the power to levy property taxes from five parcels along the proposed streetcar route. 

At the moment, the city is working out how to plan for post-demolition transit and development projects. Back when the city agreed to the original lease, City Council documents said that the USPS lease would not “negatively impact” city plans for Nicollet Avenue and redeveloping the site. 

The city has yet to solicit bids for the demolition of the site, so there is no exact price set for the demolition yet. A fiscal note in city documents from last year estimated the cost at $600,000.

Public hearings, meetings or other mechanisms for public feedback regarding anything to do with the Kmart site are planned to begin in 2022, according to said Minneapolis spokesperson Kelly Stacken.