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Continued: Downtown St. Paul Macy's closing will end a 50-year era

Macy's will be shutting the doors of its St. Paul store this spring, closing out an era of River Room popovers and lunch-time shopping and ending 50 years of department store operations on Wabasha Street going back to Dayton's.

Store employees will be officially told Thursday that the store is closing, reportedly in late March, according to sources who did not want to be named.

Several Macy's workers said Wednesday that they hadn't yet heard anything but had been bracing for the news since the store's 10-year commitment to the city to stay open, enforced by a forgivable loan, expired with the turn of the year.

Macy's officials, meanwhile, declined to comment. They are expected to release a statement Thursday on the store's future.

Macy's owns the five-story yellow-brick structure, which Dayton's opened in 1963. The store's departure will mark the first time downtown St. Paul will be devoid of a department store in a century, as stores such as Dayton's, Donaldson's and the Golden Rule have been gobbled up by others or gone out of business.

Joe Campbell, a spokesman for Mayor Chris Coleman, expressed optimism in a statement Wednesday and said the city would have more to say after the statement by Macy's.

"Downtown's momentum has been building and the city sees great things ahead for this site," Campbell said, pointing to the addition of the light-rail line scheduled to begin rolling in 2014, a new Saints ballpark in Lowertown and a planned Lund's grocery store.

Ned Rukavina, senior director of brokerage services for Cushman & Wakefield/North Marq, said Macy's will be missed "but how big an impact it will have is still unclear. It will be a sad change for the city."

But not a surprise, as retailers nationwide have been abandoning central business districts for decades following the advent of the suburban shopping mall -- a concept pioneered by Southdale in Edina in 1956.

Macy's still has a major store in downtown Minneapolis, one that has operated for more than a century since it was Dayton's flagship store.

The St. Paul store typically has been a sluggish retail performer, catering in recent years mostly to downtown's office workers and residents.

Most shoppers who were asked for comment at the store Wednesday said that while they weren't surprised that it is closing, they are sad to see it go.

Jane Russo, who has worked and shopped in downtown St. Paul for 30 years, said the store will be missed even though she said it often didn't carry much of the inventory found at other Macy's.

"It's always been such a landmark," she said. "It's going to be strange" when it closes. The store's decline, she said, has tempered her hopes that another large clothing and home goods store might survive.

"If Macy's can't make it ... who can?" Russo said.

Even suburban shopping malls have seen their share of department store closures, as customers opt for the convenience and low prices of mass merchandisers or Internet shopping.

During this week last year, Cincinnati-based Macy's announced that it was closing five Macy's stores and four Bloomingdale's that didn't meet its "performance requirements" -- including the Bloomingdale's store at the Mall of America that had operated there since the Bloomington megamall opened in 1992.

The St. Paul Macy's might have been included among those closures last year, but for the fact that it was still operating under a 10-year loan deal with the city to remain open through the end of 2012.

In 2001 city leaders, concerned that the then-Dayton's store might close, agreed to lend Target Corp. $6.3 million to subsidize a $20.4 million store renovation. In addition to the loan, St. Paul also awarded the company a $1.5 million grant for asbestos removal.

Under the deal, the city agreed to forgive the loan if the store remained open for 10 years. The deal continued through subsequent ownership changes, first with the May Co. and then Macy's. With the arrival of the new year, Macy's obligation has ended.

The renovation adjusted the store for the downtown market in hopes of gaining greater efficiency. It reduced retail space from five floors to three, eliminated one restaurant and home furnishings, and spruced up the store's appearance inside and out.

Some retail experts say the Macy's space could be filled with expanding retailers such as Gordman's, Herberger's or Kohl's. But the same issues dogging the St. Paul Macy's likely will hamper the success of any future downtown retailer.

Those issues include an employee base of state and city office workers, "who roll up at 5 p.m. and go home," said Dick Grones, founding principal of Edina-based Cambridge Commercial Realty. A strong restaurant and entertainment presence would help keep employees downtown after hours, but that component in St. Paul is fledgling, he said.

Another issue is the overall decline of employees actually working in downtown St. Paul. Fewer employees means fewer shoppers, especially after Macy's cut back its operating hours last summer.

The store may be missed most by remaining downtown workers, who got used to making quick trips into the store during lunch and work breaks.

Israel Medina, a downtown worker who lives in Roseville and said he browses Macy's about three times a week, said the store is convenient and "better to shop ... than the other locations." It also gave him a reason to spend money downtown, he said.

Twitter began to light up Wednesday afternoon as word spread that the store would be closing. "This 20-year Macy's card carrier is closing her account," tweeted Sarah Peterson.

Precious Starks and Elizabeth Paxton, who stopped at the store Wednesday, said they shopped there because it was conveniently located off several bus lines. They shop for clothing for themselves and their children.

"It's going to be a big hole," Paxton said.

Staff writers Chao Xiong and Mary Jane Smetanka contributed to this story.

kduchschere@startribune.com • 651-925-5035 jmmoore@startribune.com • 612-673-7752

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