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In hopes of reopening Nicollet Avenue, Minneapolis may spend $7 million on Kmart site

City preparing to spend more than $7M for parcel that could open access to Nicollet Avenue.

By Emma Nelson

May 18, 2017 at 2:21AM

Pedestrians cross the street as cars exit the parking lot of the Kmart on Lake Street and Nicollet Avenue in Minneapolis on Thursday, November 5, 2015. (The Minnesota Star Tribune)

Minneapolis is preparing to spend more than $7 million to buy the Kmart parcel in south Minneapolis, in hopes of eventually reopening the piece of Nicollet Avenue the store cut off when it was built in the 1970s.

The city already owns the adjacent land, formerly a Supervalu grocery store, and in 2015 paid $800,000 to initiate an $8 million purchase agreement for the Kmart site. A New York investor currently owns the land along W. Lake Street.

But even if the sale goes through, it may be years before Nicollet reopens. Kmart's lease at the site doesn't expire until 2053. So far the city and company haven't be able to reach an agreement on redevelopment.

Kmart parent company Sears Holdings Corp. has said it wants to continue operating the store amid any redevelopment.

In a statement Wednesday, spokesman Howard Riefs said the company is "still waiting for a workable plan that makes sense for our store and neighborhood."

The city has tried unsuccessfully to reach an agreement with Kmart that would allow Nicollet Avenue to reopen while store operations continue, said David Frank, the city's director of economic policy and development.

Negotiations are expected to continue after the sale, he said. The parties will either come to an agreement, or the city will wait until Kmart's lease expires to move forward with plans to open the corridor.

"Of course, everyone's first choice is relocate Kmart and put the street in," Frank said. "But this will put us in a position where we've taken all the steps that we can at the moment, and we will have achieved something we've never had before, which is the certainty that it will happen."

Money to complete the land purchase will come from a city fund dedicated to development-related expenditures. The action is expected to go before a City Council committee June 20.

Kmart was controversial when it arrived in the Whittier neighborhood in 1977, but it's become one of the most successful Kmart stores in the country.

The local neighborhood organization, the Whittier Alliance, has advocated for reopening Nicollet Avenue but would also like to see the Kmart stay open and continue serving residents, said Executive Director Ricardo McCurley.

In neighborhood discussions about the site two years ago, he said, residents had lots of ideas for how the site and its massive surface parking lot could be redeveloped — everything from better access to the greenway and public transit to green space and energy-efficient buildings.

"We consider the Kmart site a blank slate," McCurley said. "How often do you have an opportunity to get such a large piece of land in an already-developed city?"

Emma Nelson • 612-673-4509