Mall Rats

Spin job? City officials say they're not really considering razing the mall; they just needed to show federal funders a plausible vision for the intersection.
Daniel Corrigan

It's a sleepy Monday morning, but Scott Nagel is talking in rapid-fire bursts about the coin laundry he has owned for eight years in the Hi-Lake Shopping Center in Minneapolis, a strip mall located at the intersection of Hiawatha Avenue and East Lake Street, where the fabric of the city's history and future are precariously stitched together. Nagel's eyes widen and the pitch of his voice rises as he points out his neighbors in the mall--a hardware store, a new clothing store, a new Subway sandwich shop. Business has never been better on the northwest corner of the intersection, he says.

Nagel looks out his front door to the parking lot and watches as a noisy, late-1970s Buick stops at the curb. A man pulls bag after bag of laundry out of the trunk. This morning Nagel is pondering the rumors that have been floating around Hi-Lake since April. That's when he and other mall business owners got letters saying that as part of the process of planning for a light-rail stop nearby, the city was scoping out the area for housing, offices, and new retail space. Since then, talk had been that the mall would be demolished.

"The city is talking about redevelopment," he says. "But this isn't redevelopment. This is screwing with people's livelihoods."

The area has always been envisioned as a hub of some sort, but ever since the Lake Street streetcar line was closed in 1954 numerous development plans have come and gone. In the Sixties there was talk of pushing an interstate highway through the area; in the Seventies proposals were floated to run a light-rail line there. Over the years many neighborhood businesses began to show signs of neglect.

Hi-Lake itself was built in the 1950s and purchased in 1964 by the late Erling Rice, the mastermind behind the Red Owl grocery chain, who was a popular figure with the people of the neighborhood. His son Rex, of Rice and Associates, has managed the property since 1970. Since then, Hi-Lake has managed to survive as easily accessible retail for the numerous low-income residents in the nearby Corcoran, Powderhorn, Longfellow, and Phillips neighborhoods.

And then last summer, after it became clear that Minneapolis's light-rail transit dreams were pinned to the Hiawatha corridor, the city and developers suddenly began sizing up the land at Hi-Lake, where a crucial station on the proposed light-rail line will be located. In order to secure federal light-rail funding, the city needed to show it had a vision. In the three years since light rail has moved closer to being a reality, some early signs of development, such as a new Hiawatha bridge over Lake Street and a new YWCA, have appeared. But an exact plan for the land around the proposed transit station, or even for development within a half-mile radius of the intersection, has yet to materialize. Some of the proposals would cut the amount of retail space in the area by 80 percent; in all of them, it's a low priority.

At the same time, the 130,000-square-foot Hi-Lake shopping complex has been on the rebound. But it is clear that the haphazard design of the lot and its somewhat shabby structures don't fit aesthetically with more upscale visions--restaurants, coffee shops, walkways--of what some believe the area could be. Since last summer the city has moved quickly on three separate redevelopment plans for specific parts of the area; the quickest and easiest seemed to be the Hi-Lake Development, which deals mainly with the shopping center.

When the city wants to take over a private property, the MCDA must first get the city council's approval to study whether a parcel is "blighted" and assess its value. It must then gain approval to actually condemn and purchase--or declare "eminent domain" over--a blighted area. In the case of Hi-Lake, the MCDA started this process in April, and quickly won permission from the city council to take the first step, according to city documents.

What's unclear is whether the city plans to follow through and condemn the mall. By July the MCDA had sent out "relocation packets" to the shopping center's tenants. Panicked and unsure of their rights, members of the Hi-Lake Business Association then asked to talk to MCDA staffers. Soon residents and neighborhood organizations were outraged at the prospect of the city bulldozing a critical retail area.

Frustration with the city's tactics boiled over at an August 31 public hearing before the city's Planning Commission, held across the street from Hi-Lake in the new YWCA's field house. Ostensibly about the city's long-term vision for the Hiawatha-Lake corridor, the gathering quickly degenerated into a squabble over the possibility that the mall might be razed.

Many of the 140 people at the hearing said they were caught off guard, that the city was moving too fast, and that they no longer had a say about a redevelopment that would drastically change their neighborhoods.  

"I personally do not know why the MCDA is 'rushing' to raze the shopping center," said Annie Young, an East Phillips resident and community activist, in written testimony submitted before the meeting. "Using eminent domain on these businesses does not seem to be involving everyone for a better place to work and shop. It doesn't feel to many of us that the city and the developers understand what the residents and businesses want and need."

Two weeks later, in reaction to the meeting, MCDA director Steve Cramer sent a letter insisting that the shopping center would be given a reprieve. "MCDA has not initiated any action to acquire the center through eminent domain," the missive began, in boldfaced letters. The agency would talk to business owners about relocation "if a public taking of private property were to occur," it continued, and a new advisory committee for Hi-Lake would be made up of neighborhood and business leaders. "No request for authority to initiate condemnation will be made during this time," Cramer added, vowing that there would be no consideration of condemnation for at least ten months.

The letter did little to quell business owners' fears, however. "This is very hard for our tenants to be in limbo in a very good time for the center," says Rice, the mall's owner. "My first choice is to keep the center, since we've tried to come up with a tenant mix that would fit with the surrounding neighborhoods. Now we're in no man's land for the next 12 months."

Technically, though, the MCDA has already requested and gotten the authority to study whether the city should seek to condemn the mall. An MCDA report from April 6 on the Lake Street-Hiawatha Avenue Redevelopment District looks at the half-mile radius where the Hi-Lake light-rail station would be with an eye toward removing blight, lessening pollution, and developing housing. "The current scope of this...includes identification of property that could be acquired by the MCDA or by a private developer," the report states, singling out the Hi-Lake mall. The day after the arcane report was completed, the agency mailed it to property owners and neighborhood organizations.

The MCDA's Hi-Lake project coordinator, Robert Chong, insists that the "fast-track" process does not mean the agency already considers Hi-Lake up for grabs. In order for the city to actually acquire the mall and bulldoze it, Chong points out, it would have to go through a second round of seeking and getting approval for plans for any actual condemnation and demolition. "There's a misunderstanding that because we put this together and we were interested in Hi-Lake, people assumed we were going to condemn the property," he says. "I know this does put a cloud over the future of the shopping complex and the neighborhoods." In addition, he insists that business owners were kept in the loop via meetings with the Hi-Lake Business Alliance in July and August.

The city was concerned about Hi-Lake because it needs to demonstrate solid plans for the area in order to get federal funding for the $550 million light-rail project, according to both Chong and Planning Commission staffer Monique MacKenzie. "When the federal government makes awards for transit, you have to show you've done work on the neighborhood," she explains. "My perception is that people were surprised about how redevelopment seemed real so quickly." In early talks with business owners and residents, eminent domain never came up, MacKenzie adds. So when relocation packets were sent out and the rumors of condemnation surfaced, the city had no choice but to address the issue. And the August 31 hearing revealed neighborhood fears to be worse than expected: "The Planning Commission was like, 'Okay, we hear you. We won't touch the shopping center.'"

According to MCDA documents, staffers surveyed the area in February and concluded it met "the statutory definition of a 'blighted area' due to the presence of vacant and underutilized land, and physically and functionally obsolete commercial and residential buildings in need of major and minor repair."

Tenants say that the fact that the MCDA could conclude the mall is blighted is one reason they don't believe they've heard the last of plans to raze the mall. "If decision-makers hear and understand what goes on in this shopping center, then I could feel good about their decisions," says Joyce Wisdom of the ReUse Center, one of Hi-Lake's key tenants. "But up until a couple weeks ago, they had no idea. To name it as blighted shows that. On Saturdays the lot is full here; it is clearly viable. But I don't get many city council members shopping here."  

Wisdom doubts some of her neighbors' more sinister conspiracy theories surrounding the MCDA's actions. "I trust Steve Cramer to a certain extent, and there's new blood in an old agency that appears to be concerned about people in the community," she says. "But city staffs have had a certain way of doing things over the years. The MCDA was going around telling people it was a done deal. The fast-track redevelopment made it appear that some of the usual processes were being sidestepped. We need a rule that planners shouldn't use the phrase 'fast-track,' period."

Maybe, says Nagel. But if the whole thing boils down to a misunderstanding, it certainly wasn't harmless. "I'm frustrated because they come in and scare the hell out of the tenants," he says. "So you drive out the tenants, so the property has no value, and then they say it's 'blighted'....I'm sure this will be shown as business owners against people who are for affordable housing."

Wisdom also senses politics are involved. "This is suddenly being painted as a fight for affordable housing," she says. "Or it's being painted as Hi-Lake not being onboard with [light rail], and that's not the case."

It's too early for Nagel to know whether he should relocate. If Hi-Lake stays, he'll be running two stores that compete against each other. If his business is booted, it will leave a gaping hole that won't be filled by any of the redevelopment proposals. He has postponed a plan to revamp his coin laundry; he has a family to feed. "It's not perfect, it's a tired mall," he says. "It needs a face-lift. The MCDA can be pretty intimidating, but I feel like with this shopping center, we fight the good fight."

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