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Minnesota towns seeking to fill their empty Shopko spaces

In Albert Lea, MercyOne, an Iowa-based chain of health facilities, has agreed to build a health clinic in space formerly occupied by a Herberger’s.

Posted: Jan 11, 2020 9:43 AM

MINNEAPOLIS (AP) — Worthington director of community development, planning, zoning and building Jason Brisson considers his city’s former Shopko building, situated where Interstate 90 meets Highway 59, one of the best retail spots in southwest Minnesota.

It’s been closed since last year, when Shopko, which sold everything from clothes to home goods and electronics, shuttered all of its remaining stores as part of a bankruptcy plan. In Minnesota, most were located in small towns outside the Twin Cities metro.

Given its spot, Brisson says he’s a little surprised the once-Worthington Shopko hasn’t been bought or rented already. But at nearly 67,000 square feet, the former building is a big space to fill. Even some of the country’s biggest retail chains, like Target, Walmart and Macy’s have looked to do more with less space as online shopping eats away at brick and mortar store profits.

“The building is larger than most tenants are looking for,” Brisson said. “It just seems like the whole industry is finding it tougher and tougher. Commercial brokers are having a tough time leasing out buildings of that size.”

Worthington is far from alone. In recent years, the closures of Herberger’s, Younkers, Sears, Kmart, Shopko and other big box retail stores have rippled across Greater Minnesota, leaving consumers with fewer shopping options and city officials trying to figure out what to do with the open space.

Some Minnesota cities are hoping to court new retailers, whether one or more, to fill their former Shopko spaces.

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The nonprofit news outlet MinnPost provided this article to The Associated Press through a collaboration with Institute for Nonprofit News.

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In the rural community of Mahnomen, about an hour from Bemidji in the White Earth Nation, the loss of Shopko means one less place to shop in Mahnomen — and in some cases, one more reason to drive down to Detroit Lakes to shop, said Mitchell Berg, city administrator.

Bigger cities like St. Cloud can more easily absorb the loss of a Shopko, Berg said.

“But these smaller communities … it’s a little harder. Not just because the retail aspects changed so much, but I look at it as a capacity issue in the sense of the city, we don’t have an economic development staff member. We don’t have a lot of robust economic development tools to throw at a project.”

Berg said residents have expressed interest in bringing an Aldi to town. But like a lot of retailers, the discount grocery chain has certain benchmarks required of communities it expands in.

“You go on their website, they want an average daily traffic count of 25,000,” Berg said — an average of about 25,000 people going past their store.

The city of Mahnomen has the road with the highest traffic in Mahnomen County, but Berg estimated its average daily traffic is around 5,500.

He has hope, though. There’s a market for retail in Mahnomen even though the community is small — roughly 1,300 residents within Mahnomen city limits, the surrounding area has around 7,000 people. Mahnomen is more isolated than, say, Kasson, Minnesota, a convenient 20-mile drive from Rochester, which also lost a Shopko.

Berg would like to see another retailer fill the old Shopko space. Maybe one that also has a focus on hunting, fishing and farming, like a Fleet Farm.

As far as options are concerned, retail is better for the city’s tax base than some of the other possible uses of the building. Shopko would have generated about $7,000 in tax revenue at its appraisal value. Its loss means about a 3% decline in tax revenue — not huge, but a bigger tax haul than the city would get if the building converted to, say, mini storage, he said.

Plus, Berg said, “If you’re going to have a prominent building located right off a major highway intersection, this is your building that people are going to look to when they come into town. Do you want it to be a mini storage lot or do you want it to be something more robust?”

In the age of Amazon, other cities — especially those where residents have lots of other brick and mortar shopping options — are looking at non-retail options for filling the former big box stores.

Glencoe, a city of about 5,500 residents an hour west of the Twin Cities, has a Coborn’s grocery store, a couple of hardware stores, a dollar store and small businesses.

“We’re pretty diverse with retail,” said Dan Ehrke, assistant city administrator, and unlike some of the smaller communities in Minnesota losing retailers, are about 20 minutes from larger Hutchinson, and not far from the Twin Cities’ western suburbs, so there’s always been some spill factor from residents shopping outside of town, he said.

Glencoe’s former Shopko site is adjacent to an industrial park. It could be used for retail again, but might also work well for light manufacturing, Ehrke said.

In Albert Lea, MercyOne, an Iowa-based chain of health facilities, has agreed to build a health clinic in space formerly occupied by a Herberger’s, according to the Albert Lea Tribune. In its initial phases, the clinic will focus on primary care. Later, it plans to expand to include OB-GYN, medical imaging and an ambulatory surgery center.

Other communities are considering repurposing former big box retail sites altogether.

In West Central Minnesota’s Fergus Falls, Shopko was one in a string of recent closures, including the closing of the local Target store and Herberger’s.

Mayor Ben Schierer doesn’t see many rural towns having big box retail the way they used to.

“I think very few rural communities are going to be able to have two retail shopping centers, just because of the sheer amount of online shopping,” he said.

Fergus Falls is paving the way in Minnesota in the creative re-use of former retail space. This year, the Fergus Falls school district bought the 89,000-square foot former Target building, which the retailer closed in 2018. Even though the sale to the school district means a loss of tax revenue, it will save the school district money when it’s repurposed as a hub for early childhood education, Schierer said.

Until it closed this year, the city’s Shopko anchored the east end of its downtown. “For a lot of people who lived in the downtown area, it was within walking distance. It filled a need,” he said.

Nonetheless, Schierer said the city’s master plan envisioned eventual redevelopment at the Shopko lot, which is right on the Otter Tail River, which runs through downtown.

If Schierer could see anything go onto the old Shopko site, he said he’d want some kind of civic building, like a community center or a theater, as identified in the city’s master plan. Something like that, he said, could spur development on a parking lot across the street to make what was once the fourth block of Fergus Falls’ downtown more vibrant.

“This national trend and the closures of these national chains in Fergus Falls came at a time when we were really looking at what is our identify, what is our future,” he said. “Our historic downtown and our beautiful river — that’s what we have to focus on, that’s our unique asset, that’s what makes us different.”

Minnesota Coronavirus Cases

Data is updated nightly.

Cases: 926931

Reported Deaths: 9740
CountyCasesDeaths
Hennepin1809132056
Ramsey749811054
Dakota68505591
Anoka64961589
Washington41119367
Stearns34021287
St. Louis29939416
Scott26281188
Wright26260226
Olmsted22677131
Sherburne19206130
Carver1687671
Clay12219108
Blue Earth1162171
Rice11578139
Crow Wing11318124
Chisago1005281
Kandiyohi9913108
Otter Tail9908130
Benton9174128
Beltrami8249100
Goodhue822699
Douglas7967101
Itasca779999
Mower740049
McLeod723384
Winona715158
Isanti711085
Steele695034
Morrison678681
Becker631675
Polk608987
Freeborn569947
Carlton552577
Mille Lacs539479
Lyon532961
Nicollet528561
Nobles527954
Pine521143
Cass505255
Todd496443
Brown473661
Le Sueur464736
Meeker437960
Martin391344
Waseca381433
Wabasha380110
Dodge366412
Hubbard357649
Roseau320532
Fillmore310115
Wadena306040
Redwood283845
Houston275317
Renville271651
Faribault261835
Sibley256017
Pennington254830
Kanabec254437
Cottonwood232933
Aitkin225052
Chippewa222043
Pope209910
Watonwan201121
Yellow Medicine189925
Koochiching179225
Rock178429
Swift174124
Stevens170211
Jackson162016
Clearwater159421
Marshall154822
Murray152911
Pipestone150929
Lake134124
Lac qui Parle124425
Wilkin122016
Mahnomen108314
Norman10579
Grant102410
Big Stone9585
Lincoln8915
Kittson74623
Red Lake71810
Traverse6086
Unassigned563124
Lake of the Woods5285
Cook3141

Iowa Coronavirus Cases

Data is updated nightly.

Cases: 527597

Reported Deaths: 7379
CountyCasesDeaths
Polk81677809
Linn32838430
Scott27126295
Black Hawk22334382
Woodbury20736263
Johnson20150108
Dubuque18996243
Pottawattamie16215214
Dallas15573115
Story1398059
Warren8637107
Cerro Gordo8141125
Clinton7928115
Webster7419124
Des Moines7153106
Marshall675494
Muscatine6717117
Wapello6546145
Jasper630591
Sioux622477
Lee5977106
Marion567697
Buena Vista503449
Plymouth493388
Henry427155
Benton414760
Jones413564
Bremer403873
Boone397042
Washington395464
Carroll373355
Mahaska372366
Crawford355647
Jackson324047
Dickinson317555
Buchanan312743
Delaware303255
Clay297636
Kossuth293477
Fayette290356
Hardin289253
Tama282878
Page276133
Wright270050
Cedar269527
Winneshiek267744
Hamilton262757
Floyd261049
Clayton252360
Poweshiek242043
Harrison240979
Madison237425
Butler237346
Cass235667
Iowa234336
Jefferson228544
Mills225330
Hancock222840
Winnebago222339
Cherokee217347
Appanoose210157
Lyon209842
Allamakee209456
Calhoun199519
Shelby199542
Union197141
Unassigned18890
Humboldt188231
Franklin188031
Grundy186137
Chickasaw184522
Mitchell184343
Emmet180146
Louisa178653
Sac175626
Guthrie169338
Clarke163629
Montgomery163146
Keokuk152639
Palo Alto152332
Howard150624
Monroe144340
Ida134141
Greene128818
Davis126825
Lucas126127
Monona124940
Worth12309
Pocahontas122125
Adair118239
Osceola105718
Decatur104813
Taylor100914
Fremont98913
Van Buren95922
Wayne86125
Ringgold78429
Audubon77617
Adams5869
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