What Target’s departure could mean for downtown Minneapolis

On Thursday, Target announced that it was downsizing its office space in downtown Minneapolis. As reported by the Star Tribune,

Target, the largest employer downtown, said it no longer needs the nearly 1 million square feet it occupies in that skyscraper as it plans for a hybrid future in which workers will combine remote and on-site work. It made the decision even with 10 more years left on its lease.

This should not be too surprising.

COVID-19 has accelerated the adoption of remote work. In fact, during the pandemic, Target already had most of its employees working from home. Only “about 3,500 of Target’s 8,500 downtown Minneapolis employees worked in City Center before the pandemic.”

But while working from home could be good for workers, Target’s decision is particularly concerning for Minneapolis.

Target’s presence in Downtown Minneapolis

Target occupies “nearly two-thirds of the 51-story tower”. Its departure will have a ripple effect on other businesses and structures that are built around the work office.

Fewer workers downtown means fewer people patronizing restaurants and other stores that occupy those spaces. In the same way, reduced office work may mean fewer people looking to rent or own residential property close to downtown. Target’s departure could also reduce the overall attractiveness of downtown for businesses and individuals looking to migrate there.

Remote work gives businesses, as well as high-income, high-skilled workers, more flexibility in choosing a location. This means localities and states have to compete even harder for workers and businesses, a battle that Minneapolis could lose.

As John Phelan illustrated, Minneapolis and St Paul been grappling with increasing violent crime. This is affecting economic activity. If this goes on, fewer businesses and residents will feel confident about staying in Minneapolis. It will also mean fewer businesses and individuals are willing to migrate to Minneapolis over other cities.