The Minneapolis City Council has given city staff the go-ahead to purchase the Kmart property at Nicollet Avenue and Lake Street, part of a long-standing plan to reopen Nicollet there.
For more than 40 years, the store has blocked the intersection, a development that all parties now agree should be reversed to reconnect neighborhoods and re-establish the street grid.
The lease for the store built in 1977 is set to expire in 2053. City officials now have to work with Kmart to reach an agreement on where to relocate the store, which is the nation's most successful Kmart.
The city will purchase the 10-acre piece of land at 10 W. Lake Street from a New York investor. The timeline is unclear, but the city has said it hopes to transform the property's surface parking lots into mixed-use, multistory developments.
In 2015, the city began looking into options for the site after purchasing the nearby Supervalu grocery store land. At the same time, it paid $800,000 to secure its purchase agreement for the Kmart location.
City officials plan on using the Streetcar Value Capture Fund to pay the $7.2 million remaining cost of the purchase and $100,000 in closing costs. The fund gives the city the option to use property tax payments from five parcels of land along the Nicollet-Central corridor, which is set to become a streetcar line.
Minneapolis officials have said they plan to work with citizens on planning for the site. On Friday, the council directed its staff to gather recommendations on how to support renters, low-income residents and businesses that could be affected by the purchase.