Eagan, Maple Grove and Woodbury each rank near the top of Twin Cities suburbs for growth in retail real estate, and officials of each say they plan to continue that trend by bringing more jobs to their cities.
It’s a decades-old commercial real estate axiom that “retail follows rooftops.” That was very true in the decades following World War II and remains the case for outer-ring suburbs where farmland is still being converted to residential subdivisions. But for closer-in suburbs that have little or no virgin fields left to develop, the equation has changed.
For them, it’s now “retail follows job growth.”
Eagan, Maple Grove and Woodbury have changed their priorities to bring in new workers and industries, rather than strictly focusing on single-family residential housing. That, they say, is what will generate the retail expansions of the future.
Community development officials of each city brought that message and other insights this week to a meeting of the Minnesota Shopping Center Association. The group includes developers, retail real estate brokers, bankers, builders and others seeking signs from city leaders about what they and their residents are likely to favor going forward.
Eagan Community Development Director Jill Hutmacher and Dwight Picha, her Woodbury counterpart, each had an example of what’s working for them now: Redevelopments of outmoded or vacant office buildings into mixed-use projects with significant retail elements, which are luring retailers new to their markets.
For Eagan, it’s CSM Corp.’s Central Park Commons. the former 50-acre Lockheed Martin site that has been transformed into a 434,000-square-foot center. Anchored by Hy-Vee grocery, it also includes a Sierra Trading Post and new-to-Eagan restaurant concepts such as Naf Naf Grill, Cafe Zupas and Piada Italian Street Food, as well as a Fairview medical clinic.
For Woodbury, it’s CityPlace, a partnership between Florida-based Elion Partners and Kraus-Anderson. After years of unsuccessfully trying to find a user for a vacant former State Farm regional headquarters, the city changed tack and backed new use for the land with a mix of retailers, hotels and medical offices. The result has been a booming 100-acre center anchored by Whole Foods and Nordstrom Rack.
“In the 1980s, Woodbury put in a lot of effort to land what was going to be the last ‘Dale,’ following Southdale, Brookdale, Rosedale and Ridgedale,” Picha said. “In retrospect, seeing what’s happened with the regional mall concept, it’s probably a good thing for us it never happened.
“Shopping habits are changing, and we’re extremely happy how CityPlace is turning out,” he said. “We now know it takes a wide variety of retailing concepts to support what’s going to happen in the future. Our goal is to have 50,000 new jobs in Woodbury.”
“For us, the future of retail is as components of higher-intensity mixed-use areas, not as stand-alone malls, and with new retail serving as an amenity to office development,” added Eagan’s Hutmacher, citing the upcoming Viking Lakes project as an example. In that 194-acre effort from the Minnesota Vikings, the planned retail element is to be partly geared toward new workers coming to the nearby new Prime Therapeutics offices, which are set to open next year.
Maple Grove City Administrator Heidi Nelson, meanwhile, also stressed her city’s emphasis on luring new employers and encouraging retail as an adjunct of that goal.
“We’re seeking to create between 47,000 and 50,000 new jobs, and we’re shifting our land-use philosophy to support that workforce growth,” she said.
Nelson said the city still has 2,500 acres of undeveloped land that could support retail, including parts of its gravel mining areas as well as its newest frontier: the newly connected intersection of Interstate 94 and Hwy. 610.
“What we’re hoping for there,” she said, “is kind of a continuation of the march of office development that has happened along the 610 Corridor in Brooklyn Park, followed, of course, by more retail.”
Don Jacobson is a freelance writer based in St. Paul. He is the former editor of the Minneapolis-St. Paul Real Estate Journal.