Editorial: St. Paul can handle its Macy's challenge

Soon St. Paul will join the long list of midsized American cities without a major downtown department store. Macy's announcement this week that its St. Paul store will close in March marks the end of an era -- and the continued evolution of a new type of American downtown.

St. Paul wasn't alone this week. On Thursday, Cincinnati-based Macy's said it would also close stores in Pasadena, Calif.; Belmont, Mass.; Honolulu, and Houston, as well as a Bloomingdale's in Las Vegas. Those closings are part of a 30-year trend, with scores of large department stores shutting down as American habits have shifted to more discount, specialty and Internet shopping.

Macy's management chose to shutter the St. Paul store just days after a 10-year agreement with the city expired. In 2001, the city gave then-owner Target a $6.3 million forgivable loan to keep the store open until the end of 2012. That arrangement expired Jan. 1, so Macy's can now close the store without paying back those funds.

Though St. Paul Mayor Chris Coleman says he can't point to a dollar-for-dollar return on the investment, he said the decision turned out to be a good "bridge'' to help the city make other improvements. The pact kept the financially struggling store open with at least some activity in the center of downtown while the heart of the city became a more attractive place to live and be entertained.

According to state figures, about 72,500 worked in downtown St. Paul in 2012 (down slightly from the average of 75,100 over the last decade), but city officials say that more than 8,500 people now live downtown -- a 28 percent increase in 10 years.

As Coleman says, St. Paul is in a much stronger position to absorb the loss of Macy's today than it was a decade ago. The city's downtown has several positive factors working for it, including the continuing growth of downtown residential, improved transportation, more specialty stores and better entertainment options.

The mayor says that, together, those advances "weave the fabric'' for a more attractive, dynamic downtown environment.

Still, city leaders face the challenge not only of filling the Macy's spot, but also of developing several key riverside locations.

The city's massive downtown post office and mail distribution center is closing. The former West Publishing site, which had been used by Ramsey County, sits on a Mississippi River bluff waiting for a new use. Also downtown, recently renovated Union Depot is prepared for future traffic from trains and light-rail but has lots of empty space yet to fill.

Coleman calls those situations "opportunities.'' Yet some retail and real-estate experts say that with St. Paul's still-modest numbers of residents and business growth, those spots will be tough to fill.

It's unclear how the Macy's store and block will be used in the future. Possibilities include another retailer -- perhaps a Herberger's, Kohl's or Target -- or the site could be divided for some combination of smaller shops or street-level retail and office towers.

Meanwhile, downtown will be bolstered by the Central Corridor light-rail line and the new Saints ballpark in Lowertown -- key developments that will help St. Paul weather the loss of Macy's.