What's Up With Uptown?

Calhoun Square’s bumbling may have trampled little guys such as Lewis, but in a typically 2007 way, the big money got out whole. In May, Principal signed a deal to sell its Uptown holdings to BlackRock, Inc., a global investment firm that manages $1.3 trillion worth of assets. BlackRock won’t name its price, but the best guess is in the high $40 millions—covering Principal’s land acquisition costs and expenses from its failed plan.

While Uptown denizens are relieved to have Scott and Principal out of the picture—and pleased that the shopworn shopping center still has substantial value—they are panicky over what BlackRock will have to cram into the site to make its investment pay off. Although the condo plan faltered, Scott raised the value of the two-story mall and adjoining sites by getting the city to exceed its four-story height guideline. The city council approved a plan featuring seven stories on the Figlio corner and five stories on 31st Street. But even with the zoning givebacks, the likely sale price doesn't make sense, says Ackerberg, who again bid unsuccessfully: “To me, there’s no logic in the sale price—everyone will tell you there’s no way that price works economically.”

BlackRock acquisitions director Ryan Smidt says he can’t comment about Calhoun Square’s future because the sale won't be closed by presstime. “Once the closing is behind us, we’ll be eager to talk about this exciting project,” he offers.

The company’s website provides some clues: BlackRock’s priorities for “Neighborhood and Community Centers” include “strong anchor tenants” and “a preference for market-dominant grocery and drugstore anchors.” Informed sources believe BlackRock will pursue tenants such as:

Trader Joe’s. Ralph Remington, one of the area’s city council members, says, “They definitely want to get into Calhoun Square because their St. Louis Park store is overburdened.” The problem: Trader Joe’s business model requires wine sales, but the city forbids competing liquor stores within 2,000 feet—which in Calhoun Square’s case already includes Hennepin–Lake Liquors. Remington says the city would have to change its “silly law,” which likely means overturning the limit citywide. He acknowledges that existing liquor sellers and neighbors worn out by the late-night boozing crowd might make that politically impossible.

Best Buy. The Richfield–based electronics giant moved out of the area a decade ago, but the former owners of the Music Go Round property had announced an “urban concept” for the site, which seemed to imply Best Buy’s return. Best Buy is not encouraging. Spokesperson Justin Barber says, “We’re actively looking at downtown,” while relegating Uptown to the less-active “we’re always looking for opportunities” category.

A fitness center. According to sources, LA Fitness—a competitor of locally based Life Time Fitness—is hungry to get into the area and could conceivably solve the mall’s second-floor traffic problem. “There’s more demand than the Y and Calhoun Beach Club can meet,” Ackerberg says. “It would be a good way to drive traffic into Calhoun Square.” Complication: Life Time Fitness, looking in the area (but reportedly not at Calhoun Square), could get there first.

A drugstore. Uptown has been without one since Snyders Drug closed in 2004. Rapidly expanding megapharmacy CVS is a logical possibility.

A bookstore. Barnes and Noble is interested. Sources say Borders, which hopes to sublease its downtown store, could return if it gets a bigger slice of the mall.

Ackerberg says another logical component is office space—he tried but ran out of time to secure local advertising powerhouse Colle McVoy as part of his MoZaic development. “The supply of high-end office space doesn’t meet the demand,” he argues. Real estate insiders say the development could include apartments, which have become the housing du jour following the condo bust, perhaps with some condos in the mix.

How long this will take is anyone’s guess. The good news is that some local brokers and real estate interests who worked on Scott’s plan are involved, reducing the learning curve for the new owners. The bad news is, those folks worked on Scott’s plan and it failed.