BLOOMINGTON, Minn. — Call them ghosts of retail past. The shuttered Herberger's department store and Toys-R-Us in the Southtown Shopping Center have stood vacant for years, vivid reminders of how shopping has changed in the past two decades.
Kraus-Andersonm, the owner of that venerable shopping center at I-494 and Penn Avenue South, will soon be tearing those vacant big box buildings down to make way for new development possibilities.
The Bloomington City Council this week, at the request of Kraus-Anderson, officially declared the buildings "structurally substandard" which will help qualify the site for TIF, or tax increment financing. Projects inside a TIF district can benefit because the incremental increase in property tax value can be directed to that location.
"We are helping declare them substandard so that in the future we might be able to create a TIF district there. It is simply an administrative step in a very long process," Holly Masek, Bloomington Port Authority administrator, told KARE.
She said the city's goal is to see the redevelopment of the area match the goals of the Penn American District Plan adopted in 2014, which guides development along Penn Avenue between American Boulevard and the interstate.
"You can see some of that development is already happening in that area, and that includes higher densities, more varieties in land uses, increased walkability and new public spaces and amenities," Masek explained.
"So, think more smaller block sizes, wider sidewalks, tree canopy, ground floor retail, less large parking lot car-centric retail."
Kraus-Anderson hasn't submitted a plan yet for the area but signaled a collaborative effort with city leaders in Bloomington.
"These are just the first steps in a long and detailed process of redevelopment at Southtown," Kraus-Anderson Reality Senior Vice President Jeff Hildahl told KARE.
"We’re working closely with the City of Bloomington and we’re in alignment as to outcomes. We’ll be sharing more details as those plans become available."
University of Saint Thomas finance expert Dave Vang said there are examples across the nation of big box retail stores being repurposed. But he concedes they often don't generate the same property tax revenue as the original store did.
"Some of these spaces are kind of ideal for some elements of entertainment. Just throwing something out off the top of my head, a big enough store could probably be an indoor go-kart track or something like this," Vang told KARE
"The big four some people are experimenting with for big box spaces are entertainment, fitness centers, grocery stores and medical clinics."