Extended talks to reopen Nicollet Avenue at Lake Street reached a symbolic milestone Thursday when representatives of Kmart, its landlord and the city of Minneapolis met for the first time in at least 30 years.

Kmart's obstruction of Nicollet has long been considered one of the worst urban planning blunders in modern Minneapolis history. Opening the street has been a top priority for many officials at City Hall.

Though the city and Kmart have been in ongoing discussions, the addition of New York-based property owner Kadish Real Estate made Thursday's meeting unique.

In a letter to the city, Kmart Vice President James Terrell said his parent company, Sears Holdings Corp., is "committed to working with the city to find a viable option for reopening Nicollet Avenue."

That is contingent, however, on Kmart operating its existing store while a new Kmart store is built to fit on the redesigned site. The company is insistent on remaining at the intersection, home to one of their most popular stores.

The city needs the cooperation of Kmart and Kadish Real Estate in order to reconnect the street, which was closed in 1976 to make way for the store. Kmart has significant leverage in the talks, with about 40 years left on its lease.

The meeting with transit-oriented development director David Frank was the first time all three parties have jointly discussed the issue in more than 30 years, according to the letter.

Frank said Thursday morning at a meeting of the 35W Transit/Access project that negotiations were progressing well. The city is close to obtaining an appraisal on the other parcel, which contains a grocery store, Frank said.

The grocery store is owned by Edina-based Jerry's Foods. "[Jerry's Foods] is very interested in having a grocery store on site at the end of all these machinations," Frank said.

Reaching the owner of the Kmart parcel, Lawrence Kadish, has proved difficult in the past. But Frank said Kadish's attorney called after the city established the Nicollet-Lake redevelopment area this spring.

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