Can Block E be reborn?

Share this:
February 28, 2011 // UPDATED 8:35 am - February 28, 2011
By: Gregory J. Scott
Gregory J. Scott

// A Chicago retail guru formulates a plan, Downtowners voice their wants //

So the word is out: the new Block E owners are considering putting a casino in the troubled entertainment complex.  

On Feb. 22, local developer Alatus confirmed months of rumors surrounding the gaming idea, issuing an official statement in response to mounting press inquiries. According to the release, one of several ideas the company has floated is “a limited-footprint, sophisticated, best-in-class gaming component similar in style and experience to the Bellagio or Wynn.”

While the company stressed that the idea was still very much hypothetical, the Star Tribune confirmed that Alatus’ Bob Lux had already met with both Gov. Mark Dayton and Mayor R.T. Rybak to discuss the possibility.

Such a project would take considerable legal wrangling — possibly even amending the state constitution — as gambling in Minnesota is mostly restricted to Indian reservations.

Still, it’s a surprising curve ball from a company that so far has kept its cards extremely close to the chest. And it’s a sign that Bruce Kaplan — Alatus’ newly hired retail guru, characterized in the press as methodical and cautious — has a capacity to think outside of the box.

Way outside.

The new guy

Remember when the 
news broke, last April, that Lux had bought Block E? Downtown rejoiced, relieved to have an established local developer take control of a failed property that had long been managed from afar — first from Chicago and then from Washington D.C.

Now, 10 months later, there’s more news and more positive reaction: Lux’s firm Alatus has hired urban retail specialist Bruce Kaplan to help strategize a Block E turn-around. But this time, going local wasn’t the solution; Kaplan hails from CB Richard Ellis in Chicago. Some of the brightest feathers in his cap include retail developments along the Windy City’s famed Michigan Avenue.

So what happened to championing the hometown touch?

“Sometimes it might take an outside person to not have the local, in-bred demons,” said John Johannson, senior vice president of Welsh Companies, referring to the defeatist attitude locals exhibit toward the project. “I think everybody here is prejudiced on the thing.” “I think everybody here is prejudiced on the thing.”

While Downtown folks have had about 10 years to shake their heads at Block E, Kaplan’s approaching it with a fresh set of eyes. In the business press, he recently distilled the troubles of the 213,000-square-foot complex, which currently suffers from a 28 percent vacancy rate, into two major problems: the building’s exterior (“remarkably ugly,” he said) and its previous owners’ generic approach to development (“one-size-fits-all,” he called it).

But Kaplan sees potential. Block E’s location, right next to two traffic-generating sports venues, Target Center and Target Field, bodes well for it. And since foot traffic in the skyways often outstrips foot traffic on the streets — rents are actually about 10 percent higher in the skyways — Block E benefits from two pedestrian-heavy “ground floors.”

The unspoken problem: 
public safety

But for all of Kaplan’s initial observation, he’s silent so far on a key piece of the equation: a perceived lack of safety.

Block E is a place “where bad things are supposed to happen,” said Dario Anselmo, owner of the Fine Line Music Café and president of the Warehouse District Business Association. “I think the [original] mix of tenants wasn’t bringing the best element down.”

Anselmo, who sat in on Alatus’ first big Block E design charette, has advocated for cosmetic changes that contribute to a sense of safety — eyes-on-the-street fixes like glass facades, sidewalk cafes and bustling patios.

“They built it a little more inward than outward,” he said, commenting on the building’s sealed, fortress-like design. Anselmo worries that a prolonged bad reputation for Block E might hurt nearby businesses on Hennepin and First Avenues.

Welsh’s Johannson, whom the Minnesota Commercial Association of Realtors recently named Broker of the Year, agrees.

“There is an image — whether it’s true or not — that it’s not safe. Families aren’t going to send their kids there. Mothers with strollers aren’t going to go there. People on dates aren’t going to go there. That’s number one.”