Neal St. Anthony: A new sales world

John Wheeler has gone from managing the Mall of America to managing a global market. Sounds like a bigger job. And in some ways it is.

The man who ran that Bloomington-based titan of suburban shopping emporiums resigned in August to take on a much smaller retail complex, the Midtown Global Market. The ethnic marketplace on E. Lake Street in Minneapolis is the retail face of the Midtown Exchange, the renovated Sears, Roebuck complex.

Wheeler's challenge: to turn around the Global Market, which houses 48 small restaurants, food and gift shops but has struggled during its first 15 months. The market will post 2007 gross sales, its first full year, of about $10 million. That's at least $2 million short of management projections.

But Wheeler said the collection of immigrant and other fledgling businesses has done well, attracted more visitors than expected and just needs to generate more revenue.

"This project has been a tremendous success," he said. "It's 70 percent of the way there. It's a remarkable experience here. It's unique. There are more new things here than at the Mall of America. We're not dealing with [chain-store] managers and franchisees here. I'm dealing with owners. We're going to do it, but it's going to be tough to get that last 30 percent of the way."

In 2004, Wheeler, 59, a veteran of 30 years in the shopping center business, joined the board of St. Paul-based Neighborhood Development Center, owner of the Global Market. The venerable nonprofit developer of several inner-city markets also has trained several hundred immigrant and working-class entrepreneurs who have started storefront businesses in Minneapolis and St. Paul.

At about 75,000 square feet, the Midtown Global Market takes up less space than a small Target store. It is dwarfed by the adjacent headquarters of Allina Hospitals and Clinics, which has 1.1 million square feet and about 1,800 employees, and the 360 housing units in and around the $190 million development.

By neighborhood revitalization standards, the whole project is a home run. But the $18 million Global Market is the most visible and fragile piece of the project.

"We are clearly successful at putting a human face on a huge fortress," said the NDC's executive director, Mihailo (Mike) Temali. "The bad news is that people aren't spending enough."

The city projects that the entire Midtown Exchange will generate $65 million in new property taxes over the next 25 years, although about $25 million of that will be needed to retire related city bonds.

Moreover, the revitalization has helped cut area crime markedly, inspired adjacent development and brought rave reviews for turning a dilapidated hulk into an epicenter of commerce and cultures.

Earlier this month, the Minneapolis City Council agreed to give the NDC more time to repay the remaining $1.1 million on a $2 million city bridge loan made in 2006. The council also advanced $100,000 toward marketing the Global Market. U.S. Bank also has relaxed terms on one loan, after Global Market paid off another $2.5 million loan ahead of schedule.

In turn, Global Market management has cut rents in the new facility by up to 25 percent for tenants, bringing them closer to the neighborhood average rate.

The most successful operators include names like Holy Land and Jakeenos, restaurants that are expanding, as well as several growing peddlers of fresh produce and other foods.

Wheeler, on advice of public market veterans from around the country, is bringing in a new Asian restaurant to succeed a shuttered one, and expanding the space for restaurants, grocery and fresh food to about 85 percent of the space from about 60 percent.

He's hired a retail consultant and visual merchandiser to work with several promising shops, including Fiesta in America, and Café Finspang, that have what he believes are unrealized potential.

The market also has started to offer free parking to customers in an adjacent parking ramp and Wheeler is moving to improve signage, customer service and even working with individual retailers on strategies to get a few more bucks out of every customer's wallet.

The expansion of the fresh foods selection and takeout should increase the number of Allina commuters who stop by on their way home from work and neighbors who pop in on foot, Wheeler said.

"This is going to take a year or two to get the right mix," said Wheeler, who added that similar public markets around the country typically take five years to achieve equilibrium.

Wheeler said he was willing to take a 50 percent pay cut from his unspecified Mall of America salary as longtime general manager to oversee retail operations at the Global Market and the NDC's five other, smaller inner-city bazaars.

The trim vegetarian, who usually bikes several miles to work, said it's a challenge to try and implement the new strategic plan that he first started to develop as a member of the NDC's board. The center's minority partners include the Latino Economic Development Center, African Development Center and the Powderhorn Phillips Cultural Wellness Center.

"The Mall of America was about retail and entertainment,'' Wheeler said. "This is about retail and a unique experience; where you experience things from different regions, different countries and all in one location in the core city."

Neal St. Anthony • 612-673-7144 • NStanthony@startribune.com