Midtown Global Market helped revive a community before it hit profitability

The Midtown Global Market, the public face of the $190 million "Midtown Exchange" redevelopment of the abandoned Sears Roebuck complex on E. Lake Street, celebrated its 10th anniversary in July.

It was a lively Saturday of music, a few speakers, dance troupes and belly dancing lessons that spilled out of the market and into a parking lot.

The Midtown Exchange is anchored by the consolidated headquarters of Allina Hospitals and Clinics, the economic driver of the ­redevelopment. Allina's board decided to consolidate far-flung operations near its flagship, inner-city Abbott Northwestern Hospital, and cast its lot with the neighborhood in which it also funds a community health program.

Allina, an adjacent hotel and the several dozen merchants at the Global Market bring 2,000-plus jobs daily to the once-dilapidated, crime-infested intersection east of Chicago Avenue and E. Lake Street. More commerce has meant less crime and an uptick in once-stagnant property values in the adjacent neighborhoods.

The Midtown Global Market replaced the retail floor of Sears, which abandoned its 1920s-vintage store in 1994 for the Mall of America. And it has not been an easy success for the owners.

This year, they expect to turn their first profit after years of private-public subsidy, on about $1.2 million in net revenue from several dozen ethnic businesses and restaurants that will generate more than $12 million in gross sales.

"Midtown Global Market is the heart and soul of this whole project," said CEO Atum Azzahir of the Cultural Wellness Center, a ­neighborhood ­nonprofit that works on public health in partnership with Allina and others. "This is community development … that represents the people who live here.

The global market is owned by Cultural Wellness and the Neighborhood Development Center, the St. Paul-based nonprofit community developer that has trained hundreds of fledgling entrepreneurs, helped them get financed and incubated them at the global market and other commercial areas in the toughest neighborhoods of the Twin Cities.

The global market, which cost about $16 million to redevelop, was almost by design a long slog to economic sustainability. The easiest thing would have been to open a big grocery with an ethnic tilt toward Hispanics, a growing population in the diverse neighborhood.

But the neighbors, then-Mayor R.T. Rybak and others wanted the global market to function as an incubator for neighborhood-bred ethnic businesses. That was riskier.

And the store closings, to be expected in a new development, were compounded by the Great Recession that disproportionately hit the working class. There was a lower-than-expected occupancy rate until 2011. Commensurately, rents were not as high as earlier projected to help struggling tenants.

Moreover, NDC invested about $200,000 annually into business coaching and assistance to help sustain Midtown market tenants.

The successful names include La Loma, Sonora Grill, Manny's Tortas, Rituals, Simba Craftware, Tibet Arts and Crafts, Taqueria Los Ocampo and Salty Tart Bakery. Some have expanded to other locations or left for larger storefronts.

"Our preference is that they stay here," said Jeff Alexander, a veteran small business owner who runs real estate, including the market for NDC. "But we want them, these tiny businesses that we helped develop, to grow and expand to other locations, too. That's part of what we mean by 'success.' "

Mihailo "Mike" Temali, founding CEO of NDC, said the Midtown market also was hamstrung by the need to spend tens of thousands to subsidize free parking in an adjacent city parking ramp. And while most similar markets in other cities are owned by the public, Midtown market is private and the owners pay $65,000-plus in property taxes locally.

This was not a subsidized boondoggle. The Midtown Exchange and Midtown Global Market revived a dying, multi-block commercial span. And the subsidy is a pittance compared to the hundreds of millions pouring into publicly owned sports stadiums around the Twin Cities to the benefit of billionaire owners. The Mall of America scored more than $130 million in road-and-utility work.

The global market is grass-roots economic development that has resulted in a one-of-a-kind showcase, including entertainment, fresh grocers and ethnic shops, that attracts most of its visitors after hours and weekends from outside the immediate neighborhoods. It also has attracted national acclaim.

We can be as proud as when Sears erected its Minneapolis flagship store and warehouse on the site in the 1920s.