For most of the 20th century, the geographic center of the Upper Midwest’s commercial, social and cultural life could be pinpointed at the corner of 7th and Nicollet in downtown Minneapolis — the site of Dayton’s fabled department store.
Not until the 1990s did the magic begin to fade. Even as downtown’s workforce and residential market stayed relatively strong, retail all but abandoned the core city. Once ranked among the nation’s best shopping streets, Nicollet Mall fell off the map as names like Gucci, Saks, Neiman Marcus, Ralph Lauren and many more departed. Dayton’s slid into history in 2001, its classic flagship store lingering under other names until finally giving up the ghost last winter.
But now, to stand at 7th and Nicollet is to catch the alluring scent of rebirth. Nicollet’s new woodsy streetscape, after a tortuous reconstruction, is finally in place, and Dayton’s historic interior is being gutted and recast for an array of new tenants.
Indeed, developers intend to reattach the Dayton’s name to a mix of new dining, retail and office “experiences.” The plans are stunning: On the lower level, an upscale food hall reminiscent of New York’s madly popular Eataly. On the main floor, atriums and sweeping staircases connecting to the lower and skyway levels. On the skyway, a blend of edgy retail shops unique to the market. On floors 4 through 12, office space with a gym and a rooftop garden designed to appeal to the techy, new-generation workforce. One aim is to lure the creative departments of large suburban-based companies downtown — the location that young talent prefers.
Brian Whiting, president of Chicago-based Telos Group, a leading investor, calls the Dayton’s project “a guiding light” for the rejuvenation of retail and entertainment along Nicollet. We hope he’s right.
Obviously, Whiting and his partners see promise at the heart of the Twin Cities, now ranked by the Urban Land Institute as the Midwest’s hottest commercial real estate market. The Dayton’s project benefits from an iconic name and setting, a growing and affluent downtown residential population, a stable downtown workforce tilting toward the young and tech-savvy, an impressive renewal of cultural and sports venues, and an evolving business community learning — belatedly — that street-level atmospherics are important to drawing young talent.
Still, there are obstacles to the project’s success, starting with the Republican plan to scrap historic preservation tax credits as part of a new tax bill. That alone could stymie the development.
Another important realization is the project’s inability to succeed solely on the strength of downtown’s 40,000 residents and 165,000 workers. It must also draw suburban and out-of-town visitors, thus raising other potential obstacles: the absence of free or easy parking; the city’s failure to deter panhandling, loitering and other livability behaviors; downtown’s dearth of attractions for children and families; the region’s tardiness in expanding rail transit, especially to the affluent southwestern suburbs, and the Minnesota Department of Transportation’s freeway construction schedule, which threatens to constrict access to downtown over the next four years.
Retail’s fragile nature is yet another challenge. Hammered by online competition and fickle consumers, brick-and-mortar stores are tricky to bundle. Only a few (Uniqlo, Bonobos, Apple, Warby Parker, etc.) have found formulas that press the right buttons on technology, customization, price and shopper experience. “It’s extremely complicated,” said Nick Bruns, a Baltimore-based retail consultant at Open Realty Advisors. “Stuff that’s working now won’t be working 15 years from now.”
Still, as Bruns, Whiting and other experts note, projects like Dayton’s, anchored by upscale food halls, are popping up and flourishing all across urban America. If local obstacles are overcome, they say, there’s no reason Minneapolis can’t join the retail revival.