Is Calhoun Square retail dying?

The Uptown mall has lost almost half its retailers, but its founder says the market is always changing

"There aren't enough businesses left in Calhoun Square to provide enough business to survive," said Ann Geister, store manager and 17-year employee of Michael's Hallmark Gold Crown store in Calhoun Square.

Geister explained that the store, which has been on the first floor of the 3001 Hennepin Ave. mall since its creation, would close by Aug. 1.

Many retailers and services have left the 19-year-old Uptown mall recently, said Geister, adding, "Retail traffic has dropped over the last year and nowhere is it more dramatic than at Calhoun Square."

Some recent Calhoun Square deserters include Greffin Jewelers, now located at 3204 W. Lake St., the Great Metropolitan Backrub, now located at 1426 W. Lake St. and Heartbreakers, now located at 2941 Hennepin Ave. S. Services such as the post office have also departed.

Business owners who have left, and some who remain, describe a symbiotic relationship between retail and service businesses that has been harmed. Many business owners said the first-floor post office's departure in April 2001 was the last nail in the coffin for many retailers, too.

Calhoun Square management insists retail sales are down everywhere, and their mall's drop is not unusual compared to others. Ray Harris, Calhoun Square's owner and creator, said people's shopping rituals have simply changed over the years and the center is trying to roll with the market.

Why retail ails

Annette Rondano's Great Metropolitan Backrub store started as a Calhoun Square kiosk then became a first-floor store. She said she moved her store across the street in March because walk-by traffic was so bad.

Before Rondano moved, she said, she tried to negotiate lower rents because of fewer customers and is still paying Calhoun Square for back rent.

She said her new Lake Street location gets much more visibility although business has stayed the same because business is always down in the summer.

Not all retail anchors have fled. Darrel Besikof, owner of Bay Street Shoes and Accessories, is also one of the few tenants from Calhoun Square's inception.

He said the dramatic decline in retail stores and services has caused his first-floor business to drop dramatically since its 1999-2000 peak. Besikof declined to provide specific financial stats. However, the current tenant roster compared to 1999 shows retail-store occupancy has been cut almost in half, from 29 to 17 currently. (See sidebar.)

Besikof said he needs other men's and women's apparel stores to bring in traffic and potential customers by his window. He said many people only have a few reasons to shop at Calhoun Square right now -- but if they had 10 to 12 reasons, business would improve.

Besikof said he'd planned to stay in Calhoun Square forever, but when his lease is up in the next year, he's not certain whether he'll remain. Besikof said the retail slump shouldn't be blamed for his lower business. "If fashion and retail mix [in Calhoun Square] was restored, the customers would support it," he said.

Original vision

Mall founder Harris said Calhoun Square must respond to changing public demand. He is focusing on workspace and entertainment, including restaurants, specialty food and art galleries, leaving less retail.

Harris said he and a few associates began planning Calhoun Square in 1978, when the former elementary-school site was still Minneapolis School Board property. He hoped the center, which opened in 1984, would be a one-stop shop where people could have lunch, do their shopping, see the doctor and have their hair cut all in one building. However, he acknowledged that the center took on a primarily retail face.

"When we first opened, people said, 'let's go shopping,'" Harris said.

He said throughout the years, the center's day business plummeted, making it very hard for retail. "Smaller specialty shops are struggling all over the country," he said.

Harris said that periodically over 19 years, many first-time retail tenants decided they didn't want the sometimes-hectic life that comes with running a retail store. To respond, Harris said he began kiosk businesses, then moved them to storefronts, to ease their way into business.

He said when there's been a vacancy, he's made every effort to find a retail replacement, but the food industry is taking over. One example, he noted, is the first-floor space currently occupied by Jimmy John's. "We sat with that vacant for six to eight month and no retailers came," he said.

He said smaller shops are dwindling, but larger ones such as Borders Book Shop and Kitchen Window on the first floor have continued to do well here. Both stores confirmed consistent sales at Calhoun Square.

Harris said Calhoun Square has remained profitable, while others mall spaces downtown have failed. "We're just keeping our ear open to the marketplace," he said.

A new Calhoun Square

An ongoing second-floor renovation, which Harris said began in late 2001 and will cost between $1 and $2 million, is yet to be completed. However, he said it is transforming spaces that could be either retail stores or offices, depending on who shows up.

Calhoun Square Marketing Manager Dawn Zaremba said new second-floor developments should help bring more people into the center. One is the Village Green development company, that will open a preleasing office Aug. 1 for new Lyn-Lake area apartment complexes.

She also said that a new bar/restaurant, the Independent, would fill the former Smiling Moose space in September. The Independent is even creating a three-season porch to overlook the Hennepin-Lake intersection.

In the meantime, Zaremba said, the center is advertising to promote retailers and events such as beer and coffee festivals.

Still, Bay Street's Besikof said that what the center really needs is more retail stores -- big chains and independent -- to keeping existing retail businesses such as his alive and well. "For me, it's about the critical mass of retailing, and Uptown's losing it," he said.