Target puts new campus on long hold

Expansion delays at the Target Corp. campus in Brooklyn Park, heralded a few years ago by city officials as a "third downtown," could push back new construction by more than four years.

Target has no plans to build at the site, about three years after Brooklyn Park and the retailer announced designs for a $1.75 billion complex that would create as much as 8 million square feet of office space and bring as many as 30,000 jobs to the area.

Citing the troubled housing market, an unfinished Hwy. 610 and opportunities to expand in India, Target told city officials that it likely won't meet minimum building requirements this year to receive part of a $20 million city property tax abatement.

The development contract between Minneapolis-based Target and the city required the company to start building 250,000 square feet of office space by the end of this year in order to get part of the tax benefit.

But the expansion could be put back on track if Target does not renew its leases in downtown Minneapolis.

Target spokeswoman Delia McLinden said that the company could consider moving some of its downtown employees to Brooklyn Park, depending on what happens with the leases at the 33 S. 6th St. and City Center buildings, which are set to expire in 2013 and 2015. Between the two buildings, there are about 4,000 employees.

The Brooklyn Park campus is at 60 percent capacity, with about 1,300 employees, McLinden said. The only new construction on the site has been a 245,000-square-foot office building completed in 2006.

"Obviously we have room for more Target employees there and we have no expansion plans at this time," McLinden said.

During a meeting with city officials in June, Target representatives said that "they have a strong commitment to continued growth at the Brooklyn Park campus," according to a memo from Bob Schreier, Brooklyn Park's community development director.

But Target's new corporate growth "has stagnated with current economic conditions," and the company doesn't plan to start additional construction until 2012 or 2013, the memo also said.

Project on indefinite hold

The project that city officials had hoped would be completed within 10 to 15 years now has no definite timeline, because it could take years to resolve the issues cited by Target as reasons for the slowdown.

When the 2006 contract between Target and Brooklyn Park was signed, the completion of Hwy. 610, which will create a freeway connection between Hwy. 252 in Brooklyn Park and Interstate 94 in Maple Grove, was supposed to be started in a couple of years. Now, the project likely won't begin until 2014.

"If I would weigh the most important factor, we need [Hwy.] 610 done, and they do too," Schreier said.

The Hennepin County tax abatement was also a major point of discussion when the project was originally proposed, but talks between Target and the county were put on hold in the past year.

Hennepin County Commissioner Mike Opat, whose district includes the Brooklyn Park campus, said Target officials have told him they don't plan to pursue a county tax abatement in the near future.

"Target has communicated very regularly with me about how the economy has affected them and how the state's failure to finish [Hwy.] 610 has affected their plans to develop," Opat said.

The impact that Target's expansion in India might have on the Brooklyn Park campus is less clear. On Friday, McLinden said that she couldn't specify the types of jobs that could be created in India, but she emphasized that the company uses the India office to operate 24 hours a day.

"If we could keep those jobs in Brookyln Park, obviously we would probably prefer to do that, but there are times when it's just not feasible," McLinden said.

In the city's memo, Brooklyn Park officials said they plan to continue talking with Target about moving employees to the campus, as the company "indicated that there could be significant challenges within space they currently lease."

Some preliminary discussions concerning renewing Target leases at 33 S. 6th St. and the adjoining City Center building already have taken place, according to David Sternberg, senior vice president of the Minneapolis office of Brookfield Properties, the Toronto-based owner of the buildings.

Target is being courted by area developers who would like to secure it as an anchor tenant in a new office building that would be built in one of several sites now available downtown, but McLinden said Target has no plans to build downtown.

Staff writer Susan Feyder contributed to this report. Lora Pabst • 612-673-4628