New Whole Foods store helps round out North Loop neighborhood

Though the artist studios of the North Loop have long been replaced by high-end boutiques and hundreds of Soho-style lofts, nothing will trumpet the transformation of the once-grungy Warehouse District like the upcoming opening of a new Whole Foods store.

"It's really becoming a more complete community — people live there, work there and shop there," said Tom Borrup, a Minneapolis-based community development expert. "This is another piece of the perfect storm there; it's also a harbinger of what's more to come."

While the new store — on the site of a former Jaguar dealership — isn't downtown's first grocer, its arrival is a turning point for what has become the city's fastest-growing neighborhood. Since 2008, more than $150 million has been spent on new housing in the North Loop, including the conversion of old brick warehouses and now-idle factories into apartments and condos. Thousands of new living spaces have helped the population grow nearly 200 percent in just a decade, attracting more than 4,000 residents to a neighborhood that until only a decade ago was a flyover zone for Twin Cities housing developers.

"You could count the number of people who lived in the area on one hand," said Peter Kirihara, who opened a coffee shop in a brick warehouse building in 1991. At the time, the neighborhood's primary draw was its affordable studio space, but there were few options for people who wanted to live, shop and eat there.

Now the area is home to boutiques that sell $30 bars of soap and bespoke clothing for men. The loading dock in front of Kirihara's coffee shop has become a popular patio where locals mingle. Kirihara and his business partners also own a wine bar and nightclub in the neighborhood.

Kirihara said the growth of his businesses has followed a housing boom. Since 1997, more than 2,500 new apartments and condominiums have been built in the North Loop, not including the 900-plus units that are under construction, according to Maxfield Research. This includes a sleek glass-and-metal boutique apartment building developed by a Malaysian company.

The only thing missing, Kirihara said, has been a major grocery store.

"It's filling a necessary void in this neighborhood. It'll be nothing but good," he said.

Interest in the store isn't new. In 2007, a Seattle-based developer initially planned to put a Whole Foods on the ground floor of a luxury high-rise condo building that would replace the boarded-up and vacant Jaguar dealership.

That idea faded when the housing market crashed, but it was revived by Ryan Companies, which partnered with the Excelsior Group on 222 Hennepin, a $70 million mixed-use project that includes more than 250-plus luxury apartments in a low-rise building that has a stronger visual connection to the neighborhood than a luxury condo tower would have.

Bob Eisenbise, store leader for Whole Foods, said he fully expects the store to drive more development and draw more residents. "We're proud to contribute to the growth of this already buzzing neighborhood," he said.

Fritz Kroll, an Edina Realty sales agent who works in the neighborhood and has lived there for a decade, said the store already has helped make it easier to sell the neighborhood to prospective residents.

"What was a big eyesore has been transformed into a beautiful store," Kroll said. "And I think having a Whole Foods here is just a huge stamp of validation for the neighborhood."

Such walkable neighborhoods like the North Loop are rising in popularity in the United States. Development there began on former rail yards along the Mississippi River, and has moved south across Washington Avenue, the main thoroughfare through the neighborhood.

David Frank, chairman of the North Loop Neighborhood Association, said that as recently as 2005, the area still had the feel of an urban outpost.

"It felt like you were moving into what was then a yet-uncharted part of town for residential," said Frank, noting that there were huge gaps in a streetscape dominated by empty warehouses and vacant lots.

The opening of Target Field, for example, helped change that perception by creating a public amenity in an area developers had largely neglected.

"We weren't quite sure that it was going to catch," he said. "It felt like a wager that the development market was going to come here. Now it feels like easy money."

Another 100 new rental units have been proposed for the North Loop, and a new transit center that's being compared to New York's Grand Central Terminal is scheduled to open next year. Plans are in the works to build a $57 million headquarters for the National Bone Marrow Transplant Program. And residents are trying to identify the best spot for a new neighborhood park.

Despite all of that, the neighborhood has retained its commercial feel, in part, because the Warehouse District is listed on the National Register of Historic Places, limiting the kind of high-rises that are popping up in the adjacent downtown area.

"We have cool condos and apartments," said Frank, who lives in the 710 Lofts. "But when I ride my bike I still have to be careful of the semitrailers that are still doing their deliveries."

That sense of authenticity is one of the reasons Forbes magazine recently called it one of "America's best hipster neighborhoods."

Maren Bean, who recently moved to the Twin Cities from San Francisco, said she was surprised that downtown didn't already have its own Whole Foods, and that having a store downstairs was a key reason she recently decided to rent at 222 Hennepin Av.

"Everyone seems to think it is a great thing for the neighborhood," Bean said. "It definitely made me look more closely at that neighborhood."

Jim Buchta • 612-673-7376