Can downtown Minneapolis retail rebound?

Borders, Williams Sonoma, Crate and Barrel. They're some of the retailers that have recently announced their exit from downtown Minneapolis. They join a long list of retailers who've either simply disappeared from downtown or skipped off to the suburbs to seek more profitable locations.

It's been years since downtown was the Twin Cities' prime shopping destination.

Veteran shoppers like Janine Scanlon of Minneapolis can readily tick off the names of dear departed retailers.

"Dayton's, Powers, Carson's," she says.

And Penny's, Eddie Bauer, Filene's and so on.

Many shoppers are not pleased with the number and mix of retailers left in downtown. And those shoppers don't like where they see downtown Minneapolis retail headed.

"It's definitely downscale," says Mary Jo Holbrook of Eagan.

She says she only shops downtown because she works there.

"There's just not as much variety," she says. "It's not as much fun to shop down here anymore."

But not all shoppers are down on downtown retail.

"We found great deals in department stores and in the specialty stores," says Sasa Draskovic of Orange County, California. He says he's impressed with the shopping downtown. "It is really very versatile and a lot of options for casual, upscale shopping, for kids."

City officials say downtown's retail sales total about $300 million a year. But retail experts agree most, if not all, area malls top that.

And for years, downtown Minneapolis' retail vacancy rate has been significantly higher than the regional average.

Can we convert the growth we're seeing across all the sectors into a shopping experience that competes well with the malls?

As of the third quarter of 2007, downtown had a retail vacancy rate of 8.5 percent, according to CB Richard Ellis. The metro-area average was 6.4 percent.

But downtown's decades-old struggle to improve its standing in the Twin Cities retailing universe may be looking up.

The residential population of downtown is growing steadily. Downtown still has a strong base of office workers. And downtown continues to draw more and more people to its theaters, restaurants and hotels.

"In downtown, the question is: can we convert the growth we're seeing across all the sectors into a shopping experience that competes well with the malls?" says Mike Christenson, the city's director of planning and economic development.

He says he's convinced downtown retail can come back -- if the city and business leaders make the right moves to capitalize on what downtown already has going for it.

"We believe retail will come back," he says. "But we also believe as a city we have to do some things differently."

The short list includes getting people out of the skyways. Making downtown more pedestrian friendly. Resolving retailer and shopper concerns about parking. And recruiting retailers that won't be found elsewhere in the metro area.

Some of the items on that to-do list have been goals for years and years.

"There is absolutely the very real opportunity to support more retail in downtown Minneapolis," says Ann Wimmer, director of retail recruitment for the Minneapolis Downtown Council.

Wimmer says she's not alarmed by recent retail departures. And she notes downtown has gained five retailers of late, including Brooks Brothers, which returned recently to City Center.

Wimmer says downtown still has a strong core of retailers, including Macy's, Neiman Marcus and Target. And she believes it's possible to recruit a mix of retailers that will help downtown provide a shopping experience that suburban malls can't duplicate, especially when combined with the entertainment and dining options found downtown.

"The time is right to fill in the vacancies on Hennepin Avenue with some very exciting tenants that would lend to an exciting creative experience on Hennepin Avenue," she says.

Beth Elliot, principal city planner for Minneapolis, argues downtown really needs a distinctive collection of retailers if it's to be a leading retail destination.

"A lot of that has to do with the mix of retail you have," she says. "Retailers who can build off each other, to help each other survive much better and make it more of an experience, a shopping experience."

But some local retail experts say downtown would be doing well if it can support the retailers it now has.

Retail expert Dave Brennan at the University of St. Thomas doubts upscale retailers are going to see downtown and the place to be to snare affluent shoppers.

"They've got nine other shopping centers they can go to, and some are better positioned to attract those upscale customers than is downtown Minneapolis," he says.

Those shopping centers are simply closer to greater numbers of wealthy people.

Still, Brennan says downtown retail is in pretty good shape.

"I think it's moderately good, for two reasons," he says. "Number one you have roughly 165,000 people who work in downtown Minneapolis. And an additional 30,000 people that live in or very close to the downtown area. And that provides a safety net for the city, as far as slipping too far."

Sometimes, the perspective of someone from far away can put things in a broader context. Sasa Draskovic of Orange County says when it comes to shopping he would pick downtown Minneapolis over Los Angeles.

"There really is not much shopping going on there," he says. "This is definitely a better place. I think it is really up to the standards of the big metropolitan cities, for sure."

Retail analysts say downtown Minneapolis -- despite its slip in stature in recent decades -- is still a better retail center than most U.S. cities. It's not in the same league as New York, Chicago or Boston to be sure. But it beats most cities when it comes to downtown retail.

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