At Southdale Center, the new dining pavilion will include an expansive skylight and provide more fast-dining options.

Richard Tsong-Taatarii, Star Tribune

Face-lift for Edina's venerable mall

  • Article by: STEVE ALEXANDER
  • Star Tribune
  • May 24, 2012 - 10:41 PM

Southdale is getting a makeover, and the city of Edina is helping to pay for it.

A $19.1 million renovation of the nation's oldest enclosed shopping mall announced Thursday features redesigned entrances, a dining pavilion, a new play area and a change in decor from floor tiles to lighting. The changes are in addition to improvements announced early last year that revolved around attracting Herberger's department store to Southdale. The latest changes will not expand the mall's retail floor space.

In addition, Southdale announced five new tenants for the renovated mall, and said the stores will be open by November. The newcomers are Lucky Jeans, Madewell, Sephora, Soma Intimates and White House/Black Market. Southdale, which opened in 1956, is currently anchored by Macy's, Herberger's and J.C. Penney.

"These renovations are going to revitalize Southdale and be very appealing to our loyal customers," said Laurie VanDalen, Southdale's mall manager, "and as evidenced by today's announcement, will be very attractive to both current and prospective tenants."

Funded by a $5.1 million interest-free loan from Edina and a $14 million investment by mall owner Simon Property Group of Indianapolis, the face-lift is designed to make Southdale competitive with the metro area's other regional malls, including Ridgedale, Eden Prairie Center and Burnsville Center. In the eyes of some, it will even make Southdale a smaller, less-congested alternative to the Mall of America in Bloomington.

Edina city officials will fund the $5.1 million loan for the project with tax increment financing, in which the money is recouped from presumed future increases in property taxes in and around the mall that are related to development. Scott Neal, Edina's city manager, said the loan represents a low risk to the city because the terms say that if the city's increased tax revenues aren't enough for the city to make the annual payments on the $5.1 million loan, Simon will make up the rest. Simon Property Group originally offered to invest about half as much in the renovation of Southdale, but increased it to $14 million after city offered the loan.

City officials say they got involved because the mall is important to the community.

"There's a pretty significant part of the city's overall image that is tied to Southdale," Neal said. "People want it to succeed."

From a tax perspective, the investment makes sense, he said.

"Southdale is the anchor of a much larger commercial area," Neal said.

What's more, the renovation is really bigger than the $19.1 million pricetag suggests, he said.

"It doesn't include work already done on the new Herberger's store and the existing food court," Neal said. "If you include that, the total investment being made in Southdale is more like $40 million."

Although the mall project is limited to existing buildings, the renovation could set the stage for residential development on the southeast side of the Southdale property. Simon has proposed building three apartment buildings (10 stories, six stories and four stories) with a total of 250 to 270 units on the site, Neal said. The future of that plan remains uncertain.

Jim Hovland, Edina's mayor, said Southdale "has long been recognized as the most important commercial property in the community. As goes Southdale, so goes the neighborhood and the town."

That said, Hovland acknowledges that Southdale was seriously hurt by the construction of the Mall of America.

"I don't know if Southdale will ever return to its former power and glory, but it can be special because of its large indoor spaces," Hovland said. Without the investment, Southdale would continue to operate "but might be an underperformer," he said.

Les Morris, a spokesman for Simon Property Group, said the company believes Southdale has "great untapped potential."

Steve Alexander • 612-673-4553

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