A new business that sells discounted brand-name merchandise has opened in the Hamilton Building.
A city-owned building in the heart of Savage’s downtown that had been empty for more than a year is now partly filled, a small but encouraging step in the ongoing effort to rejuvenate the business district.
Wholesale Perks, which specializes in selling deeply discounted merchandise that shoppers are used to seeing in big-box stores, opened last month in part of the ground-floor space of the Hamilton Building. The new business occupies some of what used to house Savage Art Studios & Gallery, which closed at the end of 2012.
Wholesale Perks is the brainchild of Prior Lake resident Paul Nei, whose previous experience in discounting has included work in real estate short sales. The new business acquires and resells goods that people originally bought online from big-box merchants but returned to the chains’ local stores — a practice that can leave the local outlets with too much inventory. Nei said his business sells the goods at 55 percent of their original retail price.
Nei started out selling the merchandise over websites like Amazon and Craigslist but wanted to branch out with an actual store. “We’ve been thinking that with walk-ins, we could create more repeat business,” he said.
Nei said he is not allowed to disclose the names of stores that supply the merchandise but said the items have well-known brand names. The Savage store currently is carrying goods that include KitchenAid mixers, Dyson vacuum cleaners and Riedel wine glasses.
Wholesale Perks occupies one of three subdivided spaces in the Hamilton Building. Nei said he was drawn to it because it was small and because the city offered attractive terms. He said he pays $875 a month on a month-to-month agreement. “Everything we had looked at in Bloomington was two to three times that in rent,” he said.
City Administrator Barry Stock said he is not overly concerned about not getting the new tenant to commit to a longer-term lease. “You can sign someone to a five-year lease, and in a year they can walk away. Then what’s the city going to do?
“From our standpoint, having a tenant in there is better than having no tenant,” Stock said.
Dean Trongard, a Maple Plain commercial real estate broker hired to lease the property, said city officials understood Nei’s reluctance to commit to a longer-term lease for a fledgling business.
“It’s too soon to tell just how the [Wholesale Perks] business model will play out. From the city’s perspective, it makes the most sense to not put any money into improvements, just lease the one space as is and hopefully see the business grow,” Trongard said.
Trongard said he has spoken with Nei about possibly expanding the business into one or both of the other subdivided spaces. Meanwhile, he said he continues to get inquiries from other potential tenants, including a large company looking for space for a satellite office and from smaller, start-up businesses.
“The smaller start-ups are mainly people who have been working out of their homes. The city wants to encourage and foster that type of business,” Trongard said.
Savage’s downtown got a boost last fall when a new restaurant opened in the historic, city-owned depot. Trongard also marketed that property, eventually signing Cindy Hurley, a Credit River Township resident, to a five-year lease. The Savage Depot restaurant initially was open for just breakfast and lunch, but recently added evening hours on Thursdays, Fridays and Saturdays.
“We’re getting through the winter pretty well,” Hurley said. “The repeat business has been awesome.”
Meanwhile, Savage continues to lay the groundwork to bring new life to other vacant downtown properties.
Last year the city acquired and demolished a vacant warehouse on another site near 123rd Street and Palmer Avenue as part of a larger plan to market it — and possibly an adjacent parcel — as a redevelopment site, Stock said.
Stock also said the city will look for developers for the site of its old fire station, which was demolished after the new station was built. He expects the city to begin marketing that site later this year.
Susan Feyder • 952-746-3282