Minneapolis approves deal to close Kmart at Lake and Nicollet

With unanimous support, the Minneapolis City Council agreed Friday to end its lease with the Kmart that has blocked Nicollet Avenue at Lake Street for more than 40 years. Mayor Jacob Frey has said that he will approve the deal as well.

The $9.1 million deal will eventually allow the city to accomplish its decadeslong goal of reconnecting Nicollet Avenue, reversing what some consider one of the worst urban planning decisions in the city's history.

The store will close by June 30, and demolition will begin later this year.

City officials have said they think it could take more than a year to get the new road paved and opened.

As the city moves forward, community groups are already saying they want a chance to weigh in on how the area will be redeveloped. For some, the Kmart fills a need. Some shoppers say they rely on Kmart because it provides clothing, furniture and other items at lower prices than other stores in the area. Others have raised concerns that rents will rise near the new construction.

"A deep concern for anti-displacement will be exhibited," said Council Vice President Andrea Jenkins, who called Friday a "really exciting and emotional day."

Before it persuaded Kmart to end its lease — which was set to expire in 2053 — the city purchased the land underneath it, as well as the site of a former Supervalu grocery store nearby.

The city could sell the land or lease it out. It's unclear whether the city will recoup its money.

David Frank, director of the city's Department of Community Planning and Economic Development, told council members this week that he believes they are paying less than the property's appraised value. Future development could bring in tax revenue.

The city, though, must also cover the costs of demolition and other work that has not yet been sent out for a public bid.

"We think that we are not overextending the city," Frank said. He added later that he was also "not claiming that we will make money or break even on the land sale."

The city has paid for the project so far using money from the Streetcar Value Capture Fund. The fund pools property taxes from select areas in the city, for use in building a streetcar line or acquiring the land to do so.