Downtown St. Paul Macy's to close, sources say
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Downtown St. Paul appears to be on the verge of losing its only department store.
St. Paul Area Chamber of Commerce President Matt Kramer said he expects an official announcement Thursday morning that Macy's will close, but would not disclose the source of his information.
The closure would leave downtown St. Paul without a major retailer, but Kramer is not surprised the store is closing.
"That building has no street appeal to it at all," he said. "It's essentially windowless, and so to someone driving by you could have been in a warehouse. You could have been looking at a building in an industrial park in Blaine."
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Prior to this year, Macy's would have faced millions of dollars in penalties if it closed the store, because of a ten-year-old agreement between City of St. Paul and the store's former owner.
In 2001, when the store was still called Dayton's, it received a $6.3 million loan from the city of St. Paul to help pay for significant remodeling. The terms of the loan required the store to remain in continuous operation for the next decade. The store became a Marshall Fields and then a Macy's, but it remained bound by the contract with St. Paul. As of Dec. 31, 2012, the loan is forgiven, and Macy's is free of the agreement.
The closing would be disappointing, Kramer said, but he predicts the location, next to the Central Corridor Light Rail Line, will be attractive to developers.
"We're going to groan. We're going to wail. We'll gnash our teeth. But in a couple years, something better is going to be there," Kramer said.
A spokesman said St. Paul Mayor Chris Coleman will make a statement following Macy's official announcement Thursday morning.
As a company, Macy's has performed well in recent years, but retail analyst Howard Davidowitz says it will still consider closing underperforming stores come January.
"Every intelligent retailer reviews its store portfolio after the holiday season," he said.
The company closed five Macy's stores in 2012. It also closed four Bloomingdale's, including the one at the Mall of America. It announced those closings in early January 2012.
