Uptown retail scene searching for the right fit

The former Heartbreaker space at 2941 Hennepin Avenue has been vacant for nearly two years, one of several retail vacancies in Uptown. Photo by Andrew Hazzard.

Inside one of Uptown’s most recognizable landmarks, business has slowed.

At John Fluevog Shoes in the Uptown Theatre at Lagoon & Hennepin, walk-in foot traffic has been dropping since a peak in 2015, according to the store’s door-tracker.

“This year in particular it’s gone down so significantly that our company is considering breaking our lease to get us out of here,” said store manager Jamie Liestman, who has been at the store since it opened in 2012.

The other retail space connected to the theater is vacant. Down the block, the facade on the former Heartbreaker store is beginning to deteriorate after nearly two years of being unoccupied. Just south on Hennepin Avenue, the former home of Victoria’s Secret has been empty for over a year, and next-door neighbors Columbia Sportswear and The North Face decided to leave the street last month after their respective leases expired.

Uptown is, as always, changing. New housing is constantly being erected, and a thriving nightlife scene brings hordes of pedestrians out each night. But for some local retailers, the rise in population hasn’t led to success.

“It’s been an increasingly difficult neighborhood to do retail in,” said Megan Culverhouse of John Fluevog Shoes.

What works

In 2017, the city commissioned a study on retail in Minneapolis. The report, conducted by Perkins + Will, found Uptown had $700 million in retail sales and $800 million in retail demand in 2016.

The study found while sales for destination retail, such as full-service restaurants and book shops, outpaced demand in Uptown, the reverse was true for neighborhood retail, businesses such as drug stores, grocery stores, hardware shops, salons and dry cleaners, and community retail, like furniture stores, bank branches, clothing stores, theaters and professional offices.

“There was an unmet potential for more neighborhood and community defined retail,” said Jay Demma, a senior planner at Perkins + Will who authored the study.

The fact that Uptown has many households, and that those households have larger disposable incomes than many areas of the city, is offset by the easy access to other retail hubs. Potential locations for smaller retailers are often crowded out by larger stores or restaurants, Demma said.

Many of the current vacancies in Uptown are in larger spaces, which makes them more noticeable and decreases the pool of potential businesses to fill the void.

“The biggest challenge is there’s not that many businesses that need that much space,” Demma said.

Retail, he said, follows the lead of the neighborhood. How the neighborhood grows in the next few years will determine the type of retail that’s successful.

“I think the market might be pivoting away from that sort of destination-type retail,” said Aaron Meyers, a commercial real estate broker with The Ackerberg Group who works with the Uptown Association.

Stores that could have success in Uptown are those that sell more essential, daily items to the thousands of people who live in the densely populated area, Meyers said.

Meyers is listing the former Heartbreaker space just north of Lake & Hennepin, which has been vacant for nearly two years now. Although he acknowledged leasing the space is taking longer than he’d like, he remains optimistic about retail space in Uptown.

“I’m really bullish on it coming back, but I think it will be a different kind of retail,” Meyers said.

Down Hennepin at Magers & Quinn Booksellers, the situation is less bleak. While large national chains have been in and out of the block, the independent bookstore has had a few nice years in a row, according to manager Annie Metcalf.

But in a business with margins as narrow as retail, Magers & Quinn is trying to strike a balance: assure customers they don’t have to be too concerned about the store, but encourage them to come back on a regular basis.

“It’s important to come out and support your local businesses that matter to you,” Metcalf said

Bringing in business

In 2016, Liestman rallied other retailers in the area to form the Uptown Collective. The group, which has members across a variety of shops, spas, gyms and restaurants, has shared sales efforts and charity events.

“It seemed like there needed to be a collective effort for Uptown’s retailers to bring people here to shop,” Liestman said.

Jamie Liestman, store manager at John Fluevog Shoes at Hennepin & Lagoon, launched the Uptown Collective in 2016 with other retailers to help spur business in the neighborhood. Photo by Andrew Hazzard.
Jamie Liestman, store manager at John Fluevog Shoes at Hennepin & Lagoon, launched the Uptown Collective in 2016 with other retailers to help spur business in the neighborhood. Photo by Andrew Hazzard.

One potential source of customers could come from added daytime traffic in the area. Liestman and Culverhouse feel there’s no good anchor for the neighborhood right now, especially during the day.

Meyers, the Ackerberg broker, noted more people are working in Uptown now, with MoZiac expanding to a second phase and the new WeWork space opening.

If more people are working in the area, more restaurants might open during the day to serve them. Right now, many of the popular dining establishments in Uptown are only open for dinner, when some retailers have already closed for the day.

“I think it’s going in the right direction,” Demma said of daytime population in Uptown. “But maybe not enough to move the needle.”

Parking problems

A common refrain among Uptown retailers is the lack of on-street parking is hurting business. That issue was pushed into the spotlight by the recent reconstruction of Hennepin Avenue between Lake and 36th streets, which eliminated on-street parking from Lake to 31st and removed parking from the west side of the street from 31st to 36th.

Michael Pickart, who recently opened the clothing and home decor shop Combine at Lake & Irving, said he wouldn’t have come back to Uptown without a parking lot. Pickart was a co-owner of Intoto at 31st & Hennepin for 20 years until 2010 and decided to return to Uptown for his new shop.

He said he believes in the neighborhood, but he chose his current space because it is attached to Amore and Aurora Spa with access to a 25-space lot off Irving Avenue.

“I had to have parking, and I knew that from Intoto,” he said.

At Lagoon & Hennepin, Liestman said they frequently hear complaints from customers about the lack of parking.

As a destination shop, Magers & Quinn hears some complaints from customers about the parking situation, Metcalf said, but she tries to give out tips and also points out bus routes that pass by the store.

Parking issues will always be an issue of concern for business and property owners, Demma said, because of the narrow profit margins in the retail business.

“It’s always going to be a political challenge,” he said.

But, he added, pedestrian-friendly spaces can also lure visitors.

Creating an experience

With the ease of online shopping, there must be other attractions for real-world retail locations to be successful, commercial brokers say.

“There’s got to be more to your location than your store,” Demma said.

Longtime Uptown commercial broker Jeff Herman, president of Urban Anthology, echoed those sentiments. He thinks businesses that want to be successful in brick-and-mortar retail need to have more than a great product.

“It can’t be ubiquitous retail. It has to be an experience,” he said.

Herman, who is leasing the Columbia and Victoria’s Secret locations along Hennepin Avenue, said there are businesses that will value those spaces. He already has a salon business coming into Columbia, and he said he’s confident Victoria’s Secret will be filled.

The best matches for Uptown, Herman said, are food and beverage business, beauty services, apparel and home goods stores. Staple goods stores like grocers also fit the bill.

“I think you need a blend of everything,” Herman said.

Is Uptown dead?

After The North Face and Columbia closed in January, a common refrain echoed across the Minneapolis online community: Is Uptown dead?

A survey posted by City Pages found 51 percent of 6,000-plus respondents think yes, while another 21 percent believe Uptown still lives. (Twenty-eight percent were unsure).

While tongue-in-cheek, question of Uptown’s death bothers Liestman and Culverhouse. Still, they acknowledge at least for retail business, a renaissance of sorts is in order.

“I want Uptown to bounce back. I really do. That would be better for everyone,” Liestman said.

Uptown isn’t dying, according to city retail study author Demma, it’s just continuing to evolve.

Believers contend those evolutions will continue to make the area a destination for people to live and recreate.

Herman said he thinks those who say the days of the neighborhood’s vibrancy are over don’t spend much time there.

“Go anywhere on a nice summer day and tell me Uptown is dead.”

Correction: This story has been corrected to reflect that Jeffrey Herman is not leasing out The North Face building on Hennepin Avenue, which is being leased by Cushman & Wakefield. Herman did the original lease for The North Face.