Tide might be turning for Kmart site

City leaders are drawing cheers for their reinvigorated quest to move the Kmart that sits in the middle of Nicollet Avenue at 10 W. Lake St.

They are also drawing a few skeptics — the city tried this 12 years ago, after all, without success. 

But city officials are feeling confident that this renewed attempt has real momentum. Associates from Kmart’s parent company, Sears Holdings Corp., are visiting the site and reportedly enthusiastic about rebuilding. Supervalu is considering a new Cub Foods at the site. Kmart has a different property owner now, who comes fresh off of selling another Kmart for redevelopment in Richfield last year. The developer Sherman Associates has an option to buy the Sullivan’s Supervalu also blocking Nicollet, picking up where the project was suspended a decade ago. The city is poised to invest money for project consultants next year. And the city is studying a potential streetcar line down Nicollet, assumed to be open again at Lake. 

“There is more attention than there has ever been from the city and from the county working behind-the-scenes,” said David Frank, the city’s transit-oriented development director. “And we have a very willing partner in the form of Sears. Their real estate people have been to town and met with us. They are willing, if not eager, to make something happen as a partner.”

A Kmart spokesman said the company remains willing to work with the city, and declined to comment further. 

City staff have asked Sears to provide information on its other urban stores. Sears operates two stores in Manhattan, for example, that opened in the mid-1990s. One of the stores occupies nearly an entire city block near Penn Station, and features one above-ground level and three below, according to the New York Times. Customers can descend escalators through the store to reach the Long Island Rail Road terminal, which faces the lowest retail level.

Council Member Robert Lilligren (6th Ward) said Sears has explored different retail models since 2005.

“They know they have an aging facility built for a 20th century retail market,” Lilligren said. “And they have a very successful store [on Lake].”

Supervalu also appears to be an interested partner. Store owner John Sullivan said Supervalu is considering a new Cub Foods on one of the corners, perhaps in 2014. Sullivan recently renewed his lease for another five years, but the store has cut its overnight hours and reduced inventory to deal with rising expenses. 

“We’ll hold on and offer a place to shop for the next couple of years,” he said, noting that Cub could leverage more competitive prices. “Our store is 35 years old, and we just can’t service the neighborhood as well as I wished we could. … For the neighborhood, I think it’s a good thing to have Nicollet reopened. … I just hope we can be a part of it.”

Lilligren said he anticipates some sort of food retailer in the project, and Frank said a few major commercial retail tenants have contacted the city, some of them national and some local. 

The Whittier neighborhood has suggested Surly Brewing Co. as an ideal tenant, and Lilligren agrees that a business of that type would be a great fit. Surly did not return a call for comment.

A decade ago, Sherman Associates wanted to build 400 housing units, a clinic on the northeast corner of Nicollet & Lake, and a new Cub store (not Kmart) at the northwest corner. But in 2003, the city stripped Sherman of exclusive development rights when the company hadn’t yet secured site control from Kmart.

As explained by Frank, the Nicollet project started moving again when Mike Christenson, former director of community planning and economic development, informally suggested that Sherman start working toward site control again. 

“They have had a stake in the ground there for a while,” Lilligren said. “They did a tremendous amount of community outreach, and a lot of their designs are still used today to demonstrate what it could look like. … They already had conversations going with the owners of both sites.”

Christenson’s informal request snowballed into a “strong suggestion” over the course of the last year, and now, the city has imposed a year-end deadline to secure site control. 

“Everyone knows it’s an aggressive timeline,” Frank said. “We do not want to keep [public] expectations high for too long.”

If Sherman Associates does not secure site control, the city will tackle the issue. Principal George Sherman did not return calls for comment. 

A new player in the mix is the Kmart site’s property owner, Lawrence Kadish of New York. Kadish is a generous GOP donor, according to news reports, and “Mother Jones” named him one of the top 50 political donors of 2000. He serves as a senior advisor to Americans for Victory Over Terrorism, and is founding chairman of the Committee for Security and Peace in the 

Middle East. 

In 2011, Kadish sold a vacant Kmart site in Richfield for redevelopment at 6501 Lyndale Ave. S. At the time, Southwest Patch reported the developers spent more than a year negotiating the sale. Kadish did not return a call for comment.

Assuming that the city can secure site control, a shovel in the dirt is still years away. Lilligren pegged it as potentially coinciding with the construction of a new streetcar line down Nicollet.

“Mid-year next year is when we will have a more concrete timeline,” he said. “It’s probably a three- to five-year time frame.”

Neighborhood leaders said residents are either impatient or cautiously optimistic about the renewed attempt to reopen Nicollet.

“There is always an element of cynicism of whether this will really happen,” said Marian Biehn, executive director of the Whittier Alliance.

But Biehn said she is encouraged that the project is now in the city plan, funds are identified to pay for project consultants, and a work group to reopen Nicollet is a new commitment from the city.

“Public officials are talking about it in a different tone,” she said. “There is a more sincere, more doable feel.”

“I’m interested in something actually moving forward to redevelop the site,” said Mark Hinds, executive director of the Lyndale Neighborhood Association. “This is widely recognized as one of the worst planning decisions in Minneapolis history.”

Lilligren said he doesn’t hear any debate about reopening Nicollet.

“Everybody has turned through there, and everybody knows how goofy that is,” he said. “Everybody wonders why it ever happened.”