The retailer's buildings will become an office and retail complex under new ownership.
Macy’s announced Wednesday that it has agreed to sell its three-building complex on Nicollet Mall, known as the original home of Dayton’s department store.
The buyer, New York-based 601W Cos., plans to redevelop the building into creative office space on the upper floors and retail space on the street and skyway levels, according to Macy’s. The transaction is expected to close by the end of the fiscal year.
The long-rumored closing of downtown’s largest retailer, expected to come by the spring according to the Minneapolis Downtown Council, is one of 68 Macy’s store closings by mid-2017. The retailer also plans to close approximately 30 additional stores over the next few years as leases or operating agreements expire. The company estimates 3,900 associates, including 280 in Minneapolis, will be displaced as a result of the closures.
Last year the company announced that it was looking for a buyer for the 1.26 million-square-foot department store complex after redevelopment efforts failed to pan out. The 115-year-old building at 7th & Nicollet, built in 1902 and the original home of Dayton’s, has been a Macy’s store for the past decade. The sale also includes two other, more modern buildings built in 1913 and 1929.
Gov. Mark Dayton’s great-grandfather George Dayton created the department store, which would later become Target Corp. Dayton said his family has expected the end of the store for generations.
“Fifty years ago, Dayton-Hudson began investing in Target stores, because my father and uncles foresaw that large, downtown department stores were not the future of retailing,” Dayton said. “Unfortunately, their foresight has proven to be correct, as it now affects the former Minneapolis Dayton’s store.”
Mayor Betsy Hodges said she expects the new owners to bring in “targeted, specialty retail” that will be successful in a changing downtown retail climate, which hasn’t favored large retail stores in recent decades.
“The repurposing and reimagining of the iconic old Dayton’s building, which helped define downtown Minneapolis in the 20th century, is a huge opportunity for downtown Minneapolis in the 21st century,” Hodges said in a statement. “Just as the redesigned Nicollet Mall will be a regional and national destination in itself, I am hopeful that this new development will prove to be a destination at the heart of Nicollet Mall.”
Steve Cramer, president and CEO of the Downtown Council, said in a statement that he will meet with 601W and city officials next week to begin discussing plans for the building.
“For many years the former Dayton’s building has been an underutilized asset at the center of our business district, with hundreds of thousands of vacant square feet. With the sale of the building to an experienced, well-capitalized developer with urban retail experience – 601 W Companies – we have an opportunity to revitalize this iconic structure in the heart of downtown,” he said.