City moves to purchase land at Nicollet & Lake

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The city of Minneapolis is prepared to purchase the former Supervalu site and hold an option to buy the land under the Kmart store at Nicollet & Lake, pending Council approval.

Council Member Elizabeth Glidden said the breakthrough demonstrates the city’s commitment to reopening Nicollet where Kmart sits today — it hasn’t been all “talk,” she said.

“With this step we are showing that the city has staying power,” Glidden said. “The city is willing to engage in correcting mistakes that we were a part of making. … And we’re going to have the commitment to see this through to whatever is the final point.”

The city would pay $5.275 million for the Supervalu site at 30 W. Lake St. and close in December. The city would pay $8 million for the Kmart land at 10 W. Lake St. following a due diligence period, an upfront $800,000 payment that would apply to the future purchase price, and a two-year option period to determine whether to complete the purchase.

City officials cautioned that they aren’t close to bringing in bulldozers, however.

“This may take longer than anyone would like it to take, and that’s because as the city we need to be good stewards of public dollars,” said Council Member Lisa Bender.

“Just like it took a long time to identify how to purchase these sites, we have a major piece that’s not done yet,” Glidden said.

David Frank, the city’s director of economic policy and development, explained that the two-year option period gives the city time to negotiate with Kmart. Kmart holds a lease with at least 37 years remaining, and Kmart wants to remain open throughout construction.

“Moving them to a different location onsite is bound to be expensive and difficult to figure out,” Frank said.

Frank said negotiations with Kmart would immediately follow Council approval.

Kmart spokesman Darin Broton issued the following statement:

“The City’s proposal to purchase the former Supervalu grocery store is an important first step to redeveloping Lake Street and Nicollet Avenue. We look forward to seeing a new workable redevelopment and financial plan for the site that includes a new Kmart store.  We continue to appreciate public commitments by Mayor Hodges and Councilmember Bender to ensuring Kmart remains a vibrant neighborhood asset, and hope city staff partner with us on a final plan.”

Appraisals came in just under $3 million for the grocery site and $12.9 million for the Kmart site, a value that excludes Kmart and its lease. 

The city would initially fund both the grocery purchase and $800,000 option cost with the city’s development account, later drawing on tax increment proceeds.

The city is reaching purchase agreements after years of negotiation. Over time, city staff said they faced competing interest in the Supervalu site from the Walgreens developer Semper Development as well as Basim Sabri, the owner of Karmel Mall. Semper is still interested in the site, but could not come to terms with the property owner, staff said.

In a briefing with reporters, city officials highlighted nearby transit investments. The I-35W Transit/Access project will feature five-minute rides to Downtown and buses stopping within seconds of each other during peak travel periods, Bender said. A reopened Nicollet Avenue would also hold the potential for streetcars.

“This is a really transit-rich, walkable part of the city that’s been interrupted right at Lake Street,” Bender said.

The Whittier neighborhood hopes to make its voice heard early in the development process. The Whittier Alliance has hired the Cuningham Group to facilitate a series of visioning workshops. A Wiki page, accessible through whittieralliance.org, allows the public to edit the group’s development vision.  A current vision statement includes a call for architectural innovation; small, local entrepreneurship; and public spaces that incorporate art and the Greenway. The next workshop is Nov. 24, focused on the Greenway and transit.

The city’s Community Development & Regulatory Services committee is slated to vote on the Nicollet & Lake purchases on Tuesday, Nov. 10, sending a recommendation to the full City Council.