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Back to the Future at Dayton’s?

Last Wednesday, the Star Tribune published an editorial about the proposed downtown Dayton’s development project that is worth commenting on. It was titled Back to the future with Dayton’s on Nicollet Mall. An alternative title might have been “Hope springs eternal.”

The editorial begins with a sobering reminder of recent history:

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.

The editorial never addresses the question why “retail all but abandoned the core city.” The same thing happened in St. Paul and many other cities around the country.

Despite that history, the editorial board sees bright possibilities for the proposed Dayton’s development:

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.

It sounds as though most of the building will be office space. I seriously doubt that one level of “edgy retail shops” will restore downtown Minneapolis as a shopping destination. The editorialists acknowledge some of the problems:

[T]here 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.

The Star Tribune never met a subsidy it didn’t like. But if the absence of historic preservation tax credits causes the project to crater–in other words, if it wasn’t economically viable on its own merits–the project was ill-conceived from the start. (I won’t comment on whether the architectural merits of the Dayton’s building or its history as a department store really merit “historic preservation” status.)

Next the editorialists come nearer to the heart of the problem:

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.

Most of these points are well taken. Serious shopping has moved from downtown to the suburbs, in part because of free parking and ease of access. For reasons that I consider absurd, parking in downtown is actually being reduced, as is ease of access via the elimination of traffic lanes in favor of bicycle lanes. These developments obviously won’t lure shoppers from the suburbs, where a large majority of the Twin Cities population lives. Similarly, the Minneapolis City Council’s decision to tolerate petty crime like public urination and assault (which inevitably has led to an increase in more serious crime) does make it harder to draw suburbanites and tourists downtown.

On the other hand, the suggestion that building the Southwest Light Rail line–another project that would require enormous subsidies, both to construct and to operate–would lure large numbers of suburbanites downtown to shop and work, is delusional.

I don’t know whether the proposed Dayton’s development is a good idea or not. Viewed strictly from a retail perspective, it seems highly unlikely to succeed. On the other hand, the office space could well be a good idea. What I do know is that real estate developers earn their money by making such judgments. As long as they are spending their own money and money they have raised from investors, rather than the public’s, whatever success they achieve is well-deserved.




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