May 11, 2023 - Business

The skyways are full of people, but restaurants slow to return

People lined up for skyway restaurants

People line up for Broadway Pizza and Jimmy John's in the Minneapolis skyway. Photo: Nick Halter/Axios

Downtown workers are coming back to the office in larger numbers, but a new normal of hybrid work has created a challenge for the restaurants and retailers that do business in the skyways.

State of play: Many companies have moved to a hybrid model, which has resulted in plenty of employees downtown from Tuesday through Thursday, but fewer on Monday and Friday.

  • That's created long lines at the restaurants that survived the first three years of the pandemic.

Why it matters: It's difficult for a skyway restaurant owner to make a living from three good days of lunch service.

Catch up quick: Downtown Minneapolis alone lost nearly half of the 800 skyway businesses in operation before the pandemic, according to the Minneapolis Downtown Council.

Context: Almost every big downtown in the U.S. is suffering from a reduction in office workers.

  • But Minneapolis and St. Paul have a unique problem: Their skyways have historically catered almost exclusively to downtown workers, so they aren't recouping lost lunch sales from residents and visitors in the evenings and on weekends.

What they did: Cardigan Donuts has doubled down on the skyways, adding an IDS Center shop last year to go along with its nearby City Center shop.

  • Emboldened by an increasing number of returning workers and visitors, Cardigan began opening its IDS Center shop on Saturdays two weeks ago, co-owner Justin Bedford told Axios.
  • "Every single day ... for Cardigan Donuts, and I suspect for other retailers, is better than it was last year," he said.

The other side: Some of the building owners who lease space to restaurants have greatly reduced or restructured their rental rates in order to lure restaurants back in, said Steve Cramer, CEO of the Downtown Council.

The silver lining: The high vacancies are making it more affordable for entrepreneurs to get space in the skyways.

Zoom in: The Six Quebec Building in Minneapolis lost several of its tenants early in the pandemic, including Erbert & Gerbert's.

  • The Abdo family, which owns the building, has backfilled all of those spaces, thanks in part to reducing rents in the early years of leases, Larry Abdo told Axios.
  • Savouré Vietnamese Eatery, which took over Erbert & Gerbert's space, stepped up from a farmer's market stall to the skyway. Pre-pandemic, they would be competing with well-capitalized national and regional restaurant chains, Abdo said.

The bottom line: Sarah Anderson, CEO of the Greater Minneapolis Building Owners and Managers Association, isn't giving up on Mondays become another busy day. She's already seeing an uptick in Monday traffic.


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