The City Council approved steps Nov. 20 to purchase land at Nicollet & Lake with the hope of reopening Nicollet Avenue thru the Lake Street Kmart.
The city will close on the Supervalu site at 30 W. Lake St. in December at a cost of $5.275 million. City staff will also finish negotiating an $8 million purchase option for the land under Kmart at 10 W. Lake St. The option would give the city two years to negotiate with Kmart, which holds the store lease for decades and wants to remain open during construction.
At a Nov. 10 meeting of the city’s Community Development and Regulatory Services committee, Economic Policy and Development Director David Frank said it’s possible the city and Kmart would be unable to reach an agreement.
“If Sears/Kmart chooses to continue with business as usual, and not negotiate a deal with the city, there may be no reasonable alternative but to wait until Sears/Kmart chooses not to renew their lease or the lease expires, which is 2053,” he said.
A Kmart spokesman said in a recent statement that Kmart looks “forward to seeing a new workable redevelopment and financial plan for the site that includes a new Kmart store.”
Frank said purchase of the grocery store site is key — a current agreement stipulates that someone can’t build in either the Kmart or grocery parking lot without the agreement of the parties on the other side of the block.
“One of the very first things we will do is try to negotiate that away, so that we have the ability to produce development at Lake & Blaisdell on the southwest corner of the site,” Frank said.
Council Member Jacob Frey said the land price “could ultimately pale in comparison to the price of taking over the [Kmart] lease.”
“But that being said I’m fully supportive of entering the option, although expensive it’s well worth it,” he said.
“Getting to this moment was big, but frankly, what we’re about to enter into is the most important part of this negotiation,” said Council Member Elizabeth Glidden. “That is because the public purse is not unlimited.”