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Hot Property

Last update: January 20, 2008 - 9:50 PM

PINNACLE VILLAGE SHOPPES

Hwys. 2 and 71, Bemidji, Minn.

Type: Retail

Size: 450,000 square feet

Developer: Capital Growth Properties Inc.

Details: Twin Cities residents traditionally may have seen Bemidji only in the shadow of the better-known Brainerd Lakes area to its south. But the rural crossroads, halfway between Brainerd and the Canadian border -- and halfway between Duluth and the Fargo-Moorhead market -- is on the verge of seeing its reputation go from "middle of nowhere" to the middle of a growing regional retail market.

Minneapolis-based Capital Growth Properties, a division of Capital Growth Madison Marquette, recently bought controlling interest in Pinnacle Village Shoppes, with plans to expand the original outlet mall concept to include big-box retailers, restaurants and other, more traditional, power-center tenants.

Bemidji businessman Harry Takhar said he began working on plans for an outlet mall in 2002, eventually hiring Madison Marquette to assist with leasing. Capital Growth then acquired Madison Marquette.

John Nagle, Capital Growth president, said it soon became clear that his firm had the resources to bring together a much larger project in Bemidji.

"One of the things that's happened in financing in general is that there's a lot more focus on who's the operator," Nagle said, noting that a national-level operator offers lenders stability and a network of strong tenant possibilities. "It just opens a lot more doors for you for financing."

Nagle said the December announcement about the project's upgrade has brought a quick response from retailers.

"I was actually surprised at how much interest there is in the market," he said. "We're getting calls from all over the country."

Nagle said he expects to have about 70 percent of leasing commitments in place by the time construction starts in the spring. Completion is planned for early in 2009.

Bemidji has a year-around population of about 13,000, but its retail market area is about 100 miles in diameter and includes more than 100,000 people. It is the Beltrami County seat and has a major regional hospital and a four-year university. It also has healthy tourist traffic and a significant seasonal population.

Target, Wal-Mart and Home Depot already are in the market.

The city also has plans for a major events center along the south side of Lake Bemidji, not far from the proposed retail center.

ANNE BRETTS

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