Let’s get one thing out of the way…high density and rental housing will likely be required as part of the redevelopment of the KMart site in Minneapolis. If we can accept that as fact, perhaps we can get this thing done and reopen Nicollet Avenue, perhaps add a streetcar, connect to the Midtown Greenway, and create a wonderful urban development that raises the value of the city around it.

Everyone has their own story about how much they dislike that KMart or how it is bad for the city. As for me, four years ago I completed the Lyn-Lake Small Area Plan Market Study for the City of Minneapolis to provide guidance as to future development based on market trends. At that time, one of my findings was the negative impact the KMart site had. Not the existence of KMart as a store per se, but the fact that it blocks Nicollet Avenue, a major north/south artery in Minneapolis, and that it is a blighting influence on the urban fabric of the city with its huge parking lot and big box store (yes, I said blighting). Mind you, I didn’t use the term “blight” in the market study, but it should be noted the KMart issue was brought up by others, including area business owners and commercial real estate developers. What is striking to me is the KMart site wasn’t even part of the Lyn-Lake study area, but being a half-mile to the east, it has an outsized impact. It’s presence is blighting in an urban context, and in 35 years it has not added value to properties around it. That is why redeveloping this 10-acre parcel, and doing it right, is so important.

Recently, the K-Mart site has received some press in Finance and Commerce, MinnPost, and at Streets.mn.

Did you say 10 acres!? In a city!? Wow, that is a lot of real estate! At this point, the primary objective is for the City of Minneapolis to somehow wrestle control of two parcels on the site from separate entities in order to then punch Nicollet Avenue back through and “repair” the urban grid.

But how do we do that and the redevelopment right? And what do I mean by right? How about repairing the grid, as is the intention. That alone will shape development on the site and have a positive impact on surrounding uses. Now add a streetcar to the mix and perhaps a cross-city connection from the Hiawatha Line to the Southwest Corridor, and you add even more connectivity. A good connection to the Midtown Greenway. It is possible that KMart will build a new, “urban” store as part of the development as well. But what else? That remains to be seen, except to say that Sherman Associates is rumored to again have development rights. And you know what that means – density and rental housing. Uh, oh (wink, wink)!

And there is the disconnect – not only will density and rental housing likely be part of the project, they are virtually indispensable to make the project work. As my fellow Streets.mn writer Nate Hood so eloquently puts it, we need to stop apologizing for being a city. The MinnPost article indicates the Whittier Alliance (the association representing the neighborhood in which the site is located) doesn’t want rental housing. The market rate rental housing market is strong (the affordable rental market is stronger), and that site can very likely support a substantial amount of mixed-income rental units.

The image used in the Streets.mn post shows a three-story building – not that it indicates a formal proposal. Any development on the site that includes housing will likely be well over three stories, or at least a large portion of it will – it has to. It is be the rare developer that will look at this and consider just three stories while getting the pro forma to work.

If we taxpayers are expected to invest any amount in this site, we better get a maximum value in return. In real estate development, value equals connectivity times density plus good urban design squared. More units typically reduces the amount of public subsidy required – or at least the per-unit amount of subsidy. There isn’t a taxpayer in Minneapolis who wants a disproportionate subsidy to finance a bad deal, and we’ve been burned before – see Block E as an example. Rental housing is a pretty good long-term investment.

It would behoove the City of Minneapolis to begin talking about the vision for this site and start with the reality that rental housing will be part of the project, as will density. Neighborhood processes rarely add density or rental units – public input nearly always results in taking those things away. The strategy is an inverse to bidding at an auction – you start with a low bid, then go higher. The City should start with a concept for a 12-story residential building with 750 housing units. Aim high, then pare it back as you meet neighborhood resistance. But always keep beauty and good urban principles at the forefront.

We can have beauty and fiscal responsibility. In fact, they often go hand in hand. But in this case it will require rental units and density to get it. The residents of Minneapolis should demand it, but first we must accept it.