City to reopen Nicollet at Kmart site

File photo

The City of Minneapolis appears to have cleared the final hurdle in its decades-long quest to reopen Nicollet Avenue at Lake Street.

City staff has negotiated an agreement to buy out the lease of the Kmart that blocks Nicollet Avenue between 29th and Lake streets.

Pending City Council approval, the $9.1 million deal will allow the city to demolish the buildings on the site, reopen the street and seek requests for proposals for development.

“We have wanted this for a long time,” said David Frank, director of the Community Planning & Economic Development (CPED) department.

A 2005 land-use and development plan said restoring Nicollet was the “highest priority goal” for the area.

Kmart has occupied the Whittier site since 1977, serving a neighborhood with one of the highest concentrations of poverty in Minneapolis. Products on the shelves include everything from toiletries and appliances to clothes and furniture. Customers say prices are often cheaper than at comparable stores.

City visions of reopening Nicollet date back at least 20 years.

Today, the city envisions the stretch being part of a future streetcar line that will run between Lake Street and Central Avenue in Northeast Minneapolis.

The Minneapolis 2040 plan calls for mixed-use development of between four and 15 stories on the site, which Frank said was appraised at $20 million in 2019.

The city purchased the 2.3-acre site immediately next door to the Kmart, which was once home to a Supervalu store, for about $5.3 million in 2015. It purchased the roughly 7-acre site on which Kmart sits in 2017 for $8 million, though the store still controlled the lease through 2053.

Frank said the negotiations that led to the latest agreement started in earnest after Sears Holdings Corporation’s 2018 bankruptcy. That’s when former Sears CEO Eddie Lampert purchased about a quarter of the company’s stores, he said. (The store’s corporate owner, Transform Operating Stores, declined to comment for this story.)

The $9.1 million payment will come from the city’s Streetcar Value Capture Fund, which is intended to help with the development of the streetcar line.

The city plans to demolish both buildings on the site later this year.

Public Works Director Robin Hutcheson said some of the benefits of reopening the street include creating connections with the future Orange Line bus rapid transit line and the Midtown Greenway.

“You need only look at Google Earth to see what a barrier this superblock has become to the neighborhood,” she said. “We will be reconnecting the neighborhoods by reconnecting this grid.”

She said the city plans to engage the public, including people who live and work in the area, about ideas for redeveloping the street.

She also said the city would be performing an evaluation of the bridge over the Midtown Greenway immediately behind the Kmart site and will do any work necessary on the bridge in partnership with Hennepin County.

The Kmart store on the site will close no later than June 30, Frank said, adding that workers heard the news Thursday morning. The city will work with the state Department of Employment and Economic Development to make sure those employees are aware of available dislocated worker services.

Juan Fernandez, who has shopped at Kmart for 20 years, said he wished the city could keep the store open and open the street at the same time.

Standing in the Kmart’s checkout line the morning after officials announced it would be closing, both Darrell Pfaffendorf and Curtis Walker said they wish the store would stay open.

“A lot of people that don’t have a lot of money shop here,” said Pfaffendorf.

He was buying four spice containers, each priced at 64 cents, which he said would cost him $1 a piece at a dollar store.

Elton Johnson said it’s “all well and good” if the city is going to improve the area, but “if you’re going to make it a bike trail, it’s not worth it.”

Alfred Perkins, a longtime Minneapolis resident, said he’ll miss Kmart but that he thinks the reopening and redevelopment of the street will be a better change. He suggested adding a park to the site.

Frank said the idea of keeping services available in Minneapolis, including affordable places to buy things, will be a “key part” of what the city looks for when evaluating development proposals.

He said the city acknowledges that Kmart has been an asset to the community for the people who work and shop there.

“This will be a change, but it’s a change we think has good long-term benefits for the immediate neighborhood and for the city,” he said.

The agreement will go before the City Council Economic Development & Regulatory Services committee on Monday and in front of the full City Council a week from Friday.