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Block E’s retail conundrum

Mayo may be inside, but developers still have to fill the street corner spaces
with viable businesses.

Block E is being reborn. Again.

The failed — and dreadfully designed — retail/entertainment complex has new anchors, a new look and a new name: Mayo Clinic Square. The Mayo Clinic Sports Medicine Center is on the third floor; the Minnesota Timberwolves and Lynx are taking a big chunk of space for practice facilities and executive offices. But what many don’t realize is that the ground floor space is meant to contain… wait for it… destination restaurants and retail.

The $50 million renovation by Plymouth-based Provident Real Estate Ventures aims to make people forget about the days of GameWorks, Hard Rock Café and Hooters. But can the long-troubled property attract classy restaurants or even viable ones? Provident has 35,000-plus square feet of first-floor space to fill. Kieran’s Irish Pub remains a tenant at the corner of First Avenue and Sixth Street.

“What we’re trying to do is find unique national operators to come to this market” to fill the three other corners, says Phillip Jaffe, Provident’s principal and CEO. “When the property had an Applebee’s, nobody in Brooklyn Park is going to drive by three other Applebee’s to come downtown.” (Provident is also trying to lease out 70,000 square feet of second-floor office space at the property.)

Downtown retail remains a tough sell. Bloomington-based Cushman & Wakefield/NorthMarq reported downtown Minneapolis retail vacancy at 21.1 percent at the end of 2014, nearly three times higher than the overall metro retail vacancy rate of 7.1 percent.

But one experienced broker is encouraged by the new look. “Block E is cleaned up,” says Andrea Christenson, a retail broker with the Minneapolis office of DTZ. “I think it’s a whole different animal.”

Twin Cities BusinessBoth Jaffe and Christenson point out that New York-based Loews Hotels & Resorts paid $65 million last year for the Graves hotel that’s connected to Mayo Clinic Square, signaling the block’s drawing power.

But it wouldn’t be Block E without some wrinkles. Last fall Kieran’s Irish Pub sued its landlords over losses related to the construction disruption. Both Jaffe and Kieran’s owner Peter Killen declined to comment on the lawsuit.

Jaffe says that the common areas at Mayo Clinic Square will open to the public in May. “We spent a lot of time and effort to redesign it to make it more pedestrian-friendly,” says Jaffe. “We’re spending $50 million to renovate this property. … That changes the neighborhood.”

This article is reprinted in partnership with Twin Cities Business.

Comments (4)

  1. Submitted by Sam Rockwell on 04/06/2015 - 09:37 am.

    Try smaller spaces!

    My guess is that Mayo Clinic Square will try to rent enormous spaces for restaurants and retail — this seems to be the go-to design for downtown establishments. Maybe smaller places would lure attractive businesses. All of my favorite establishments in the city have small floor plans — 112 Eatery, Muddy Waters, Hola Arepa, Black Sheep Pizza in the North Loop, Punch Pizza in NE — and all are very successful. The same applies to retail — think Askov Finlayson or the Foundry just a few blocks away.

    Restaurants and shops with enormous floor plans too often feel suburban. Block E felt suburban. Make Mayo Clinic Square feel like it belongs in a city and maybe it will be more sucessful.

    • Submitted by Harris Goldstein on 04/06/2015 - 04:16 pm.

      Downtown vs. Uptown and North Loop

      It does seem that the more successful retail / restaurant of late is smaller.

      And more, but smaller, establishments generally means more variety. And more individuality. Some will fail, but you don’t have to worry about huge, empty spaces when they do. Smaller spaces attract rising stars (can you spell “Spoon and Stable”?).

      I think the demand side of the market has changed. Where restaurant goers (particularly those from out of town) might once have preferred the predictability of a chain, now they prefer more local character. And easy access to information (Chowhound, etc) makes even a “one-off” restaurant less of a gamble.

      I wonder if there is some way to capitalize on the space for smaller restaurants. For example, would a single large kitchen (segmented for each individual restaurant) be more cost effective? I don’t know, but I bet someone does.

  2. Submitted by John Reinan on 04/06/2015 - 01:14 pm.

    Bring back Moby Dick’s!

    Nuff said.

  3. Submitted by Elsa Mack on 04/06/2015 - 03:14 pm.

    Inner city malls

    Looking at Block E, City Center, Gaviidae, St. Anthony Main and Calhoun Square, I think it’s fairly obvious that shopping-mall-style developments just don’t have a lot of success in the inner city. Time to give up on redeveloping these failures over and over, hoping this time it’ll be different. Office space is probably the best use for them, short of tearing them down and starting over from scratch.

    (Plus: “unique national operators”–what does that even mean? Wouldn’t a “national operator” mean a chain restaurant–the opposite of unique, by definition?)

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