Minneapolis skyway system filling up with independent retailers
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Keiona Cook in her Sewing & Arts Collective. Photo: Nick Halter/Axios
When Keiona Cook was 17 and working in the Wild Pair shoe store in IDS Center, she dreamed of opening her own shop inside the iconic downtown Minneapolis skyscraper.
Why it matters: For decades, getting a prime spot in the Minneapolis skyway system was tough for small independent businesses as vacancies were tight and national retailers and chain restaurants paid top dollar.
- Yes, but: With the rise in remote work and a loss of daily customers, many skyway businesses have closed, giving more opportunities for entrepreneurs like Cook to be in the middle of it all.
Zoom in: Cook's dream became a reality last fall when she signed a lease for a second location of her Lovely's Sewing & Arts Collective, a store and studio where she hosts sewing social hours, corporate team building, birthday parties and youth summer camps.
- "I knew that by having a storefront location, it would give us more visibility," Cook told Axios, noting that her North Loop location is in a basement. "I would be able to bring in more customers, and it's been blooming into that."
How it works: Real estate consultant Lee Krueger has been behind nearly a dozen leases in the Minneapolis skyway. The Minneapolis Downtown Council hired him as a matchmaker between landlords and startup companies to hammer out deals that brokers who work on commission don't want.
- He said building owners want to fill their empty spaces so they're offering low — or in some cases zero — rent, but have quick termination rights in case they have a retailer willing to sign a long-term lease at higher rents, Krueger said.
Context: Before the pandemic, a high-traffic building on Nicollet Mall might charge in the ballpark of $3,000 per month for a 1,000-square-foot space, Krueger said.
- Now businesses are paying hundreds, or less, he said.
Zoom out: Shops like Lovely's Sewing are just one small part of a broader downtown retail reset in recent years that has meant the loss of eight Caribou Coffees, two Starbucks and larger retailers Saks Off 5th and Nordstrom Rack.
State of play: While some former chain-store spaces remain vacant, others are being backfilled by local groups like Gray Fox Coffee, SK Coffee, Mother Dough Bakery and Blackwater Coffee.
Gerry Exom opened his Still Grind Coffee shop in the LaSalle Plaza complex in February and is seeing fast sales growth.
- He signed a 3-year lease in the building at a low rent with landlord Hempel Cos. Hempel bought the LaSalle complex at a steep discount in 2023 and told Axios at the time that such a low price would allow the building to offer lower rents than competitors.
- As Hempel continues to add retailers and restaurants to the skyway, Exom is seeing increased foot traffic.
- "We kind of feed off of one another," he told Axios.