Effort is aimed at filling vacant storefronts.
Saint Paul’s Downtown Alliance is one month into its Let’s Grow promotion, offering free rent for up to six months as an incentive for new tenants to fill vacant storefronts. As of last week the promotion had drawn interest from about 90 prospective tenants. Leases had been signed by Boutique Ramadhan Designs in Wells Fargo Place and the economic development firm 2043 SBC at Treasure Island Center. Other leases are in the offing.
“This is about filling the vacancies that have opened up over the past couple of years and filling downtown with life and energy again,” said Joe Spencer, president of the Downtown Alliance.
The alliance works with about 350 businesses on the streets and in the skyways of downtown. About 35 or 40 closed their doors since early 2020. “A certain amount of business turnover is normal,” Spencer said, “but this has not been normal.”
Let’s Grow is supported with $1 million from the city’s share of the federal American Rescue Plan and $1 million in matching funds from the Knight Foundation. Private businesses have also contributed, making a total of about $3 million available.
Let’s Grow is supported with $1 million from the city’s share of the federal American Rescue Plan and $1 million in matching funds from the Knight Foundation. Private businesses have also contributed, making a total of about $3 million available.
The Downtown Alliance has hired two real estate experts to work with building owners and prospective tenants: Lee Krueger, former president and chief executive officer of the Saint Paul Port Authority, and D’Angelos Svenkeson, a principal with NEOO Partners.
The free leases can be in force for up to six months, although shorter-term agreements are also possible, for example, in conjunction with a sports tournament or special event. Though rent is not charged, tenants may be asked to cover other costs, such as utilities and insurance, and meet other conditions set by the landlord.
If a short-term tenant decides to sign a traditional lease and remain downtown, “all the better,” Spencer said. “We’ve asked building owners to be flexible.” If a paying tenant is found for a space occupied by a short-term occupant taking advantage of the free rent, the short-term occupant will be relocated.
Downtown Saint Paul is adjusting to a new normal, according to Spencer. However, “the trend lines are moving in the right direction,” he said. Evening and weekend events are back at pre-pandemic levels, Spencer said, and Let’s Grow is positioned to take advantage of that activity and contribute to it.
“We’ve heard from a wide range of prospective occupants, and we’re very open to new ideas,” Spencer said. Gift shops, holiday markets, artist collectives and small professional offices are all being courted.
Downtown Saint Paul last tried to promote pop-up businesses in 2008 during the Republican National Convention as part of the Red Carpet Retail Initiative. A key difference this time around are the additional resources dedicated to staffing the program and assisting participating businesses over the long term.
The number of downtown ambassadors who help clean up the public areas and perform tasks related to public safety is being increased from 12 to 20. Art installations and special events are also planned as part of the promotion.
Downtown’s real estate market overall remains mixed. The vacancy rate for commercial properties this summer hovered at 15 to 18 percent, according to Jones Lang LaSalle and Avison Young, who recently gave a presentation to the Ramsey County Board. It is estimated that 18 to 25 percent of the office space in the Twin Cities is currently vacant.
As the COVID-19 pandemic continues to ease, more and more downtown office workers are expected to return. Vacancies give a negative impression to employees and visitors alike, Spencer said. Downtown also suffers from fears about public safety, he added.
Downtown Saint Paul is adjusting to a new normal, according to Spencer. However, “the trend lines are moving in the right direction,” he said. Evening and weekend events are back at pre-pandemic levels, Spencer said, and Let’s Grow is positioned to take advantage of that activity and contribute to it.
—Jane McClure
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