A friend pointed me towards a Star Tribune article from Monday about the state of downtown Minneapolis. The two big points are that the downtown residential population is more than that of the downtowns of Denver, Dallas, Houston and Indianapolis combined, and that we’re soon to be the third major American city (the first two being New York City and Boston) to reach the pre-suburban flight population from 1960.

(You have to register to read more than one article on the Star Tribune site, and I’m not sure how long the article sticks around before going into their pay archive. The extended entry has more info)

The state of downtown
Terry Fiedler, Star Tribune
October 18, 2004 REAL1018

Minneapolis has more downtown residents — about 30,000 — than Denver, Dallas, Houston and Indianapolis combined, according to Russ Nelson, president of the real estate brokerage firm Nelson, Tietz & Hoye and chairman of the Downtown Council.

Nelson, who preaches with the zeal of an evangelist about Minneapolis, recently gave a status report on the city to the already converted at the Minneapolis Club.

He noted that Minneapolis is about to become the third major American city, along with New York City and Boston, to reach the overall population it had in 1960 before suburban flight emptied out many urban areas.

Not everything, of course, has been as positive as the housing market.

“The residential sector has kept the economy moving while we’re still catching our breath on the job front,” Nelson said.

Downtown Minneapolis
David Brewster
Star Tribune

The downtown Minneapolis office scene, reflective of what’s happening with jobs, is still in tough shape.

The good news, Nelson said, is that the downtown office vacancy rate is headed down, from 25 percent a year ago to the current 19 percent. And the fact that a number of buildings have sold recently — International Centre to Welsh Companies and Fifth Street Towers to CB Richard Ellis — also indicates that investors have confidence in the long-term prospects of Minneapolis.

The bad news is that office vacancy rates would have to be south of 10 percent before the downtown market could be called healthy, and that may be a couple of years away, he said.

Nelson sees light-rail transit as a definite contributor to the downtown’s vitality in coming years, with shoppers and business people finding it increasingly easier to get downtown.

Light-rail is a probable contributor to the mini-boom in what Nelson calls “jewel box hotels,” such as Ralph Burnet’s new boutique, the Chambers hotel, on the site of the old Fairmont Hotel. Nelson said at least three other possible hotel projects are in the works.

One could be at the site of Xcel Energy’s Renaissance Square building, which the company is selling. Nelson is brokering the building and said its proximity to a light-rail station is a big factor in favor of it being converted to a hotel.

Another transportation matter is smaller but still meaningful to Nelson and his group. The Downtown Council is lobbying to reroute bus traffic off Nicollet Mall in order to help the sidewalk restaurant business.

“You could have your lunch without diesel fumes on your chicken salad,” he said.

The council also supports a private program to set up a network of cameras downtown to monitor street scenes. The cameras essentially leverage police resources, Nelson said, to keep a lid on everything from panhandling to drug dealing. Twenty cameras, of a planned 30, are in place. Target Corp. has committed $750,000 to the program. Xcel Energy recently kicked in another $25,000.

Terry Fiedler is at tfiedler@startribune.com.

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