What Target’s departure could mean for downtown Minneapolis
On Thursday, March 11th, Target announced that it was heavily 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 is not quite 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 the working from home trend is widespread nationally, Target’s decision is particularly concerning since it has such a strong presence downtown. Target occupies “nearly two-thirds of the 51-story tower”. Its departure has a ripple effect on other businesses and structures that are built around the work office. Fewer workers downtown mean fewer people patronizing restaurants and other stores that occupy downtown. In the same way, reduced office work may mean fewer people looking to rent or own residential property close to downtown.
But even more importantly, its departure has far-reaching implications on the overall attractiveness of downtown for businesses and individuals looking to migrate.
At a time when it is becoming much easier for people to work from home, there is not much standing in the way of businesses as well as high-income, high-skilled workers that want to move. This issue with Target has shown just as much. However, there are numerous factors that make downtown particularly unappealing and Target’s departure could just be the final spark that inspires a massive exodus of businesses out of Minneapolis.
Rampant crime, for instance, has been a growing issue in downtown Minneapolis. As John Phelan illustrated, Minneapolis and St Paul have currently been grappling with increasing violent crimes that are affecting economic activity. The more this goes on, the less current businesses and residents feel confident about staying in Minneapolis. Additionally, that also means fewer businesses and individuals willing to migrate to Minneapolis or even Minnesota
When we add in high taxes and other destructive policies like minimum wage hikes that businesses face when they move to Minneapolis, the result is almost unbearable.
It is true that globally, “remote work has severed the age-old connection between where people live and where they work“. High taxes, rising crime, and onerous regulations like minimum wage, however, are not global. So, while Target’s decision to leave downtown is possibly rooted solely in less need for office space, it, nevertheless, shines a light on how unpleasant Minneapolis has become as a place of doing business. And it doesn’t help that our policymakers have already been doing a good job of making Minneapolis a less conducive place to work or create businesses.