AMC Theater, one of Block E's last tenants, seemingly on way out

With the theater possibly on its way out, Block E may soon be a black hole of emptiness.
With the theater possibly on its way out, Block E may soon be a black hole of emptiness.

One of the last tenants in the downtown eyesore that is Block E may be on its way out.

Yesterday, the blighted downtown retail complex's AMC movie theater lost an appeal in federal court to extend its low-rent lease. It isn't clear whether that means the theater will negotiate a new agreement or close when its current least expires this fall, but if the past of Block E is precedent then the theater is probably not for long.

With seemingly no momentum in the legislature toward getting a Block E casino bill done, the future of the once-promising but now mostly vacant Alatus-owned development is a huge question mark.

Block E opened in 2002, after a $134 million investment by McCaffery Interest of Chicago and Hard Rock Cafe, and $38.5 million from taxpayers. In the first sign of big trouble for the development, Borders Books and Bellanote bailed out in 2008. 2010 saw the closing of GameWorks and Hooters and the sale of the property to Alatus for $14 million. Then this year, Applebee's and Hard Rock Cafe shut down.

Last spring, it looked like all the closures might have been part of Alatus' strategy to clear tenants from Block E and make room for a downtown casino. The idea was to use some of the casino profits to fund the public contribution for a new Vikings stadium. But in recent months, as momentum for using electronic pull-tabs for that purpose has built, there has been little talk of Alatus' casino plans ever coming to fruition. In the meantime, downtown Minneapolis is now stuck with a huge, nearly vacant building on the prime corner of 7th & Hennepin.

If the casino doesn't happen, what's Alatus' plan B for Block E? Right now, it seems to be anyone's guess. Some have proposed demolishing the building and converting the property into a downtown park. Others have suggested allowing 7th & Hennepin to revert to the skid row days of yore. Whatever happens, Block E's decade of ineptitude demonstrates that big-box retailers and indoor malls are meant for the suburbs, not urban cores.   

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