Downtown Lunds store to open mid-June
by Burl Gilyard, Finance & Commerce
Published: May 22nd, 2012
Seven years after buying a downtown Minneapolis site, Edina-based Lund Food Holdings Inc. is three weeks away from opening a new Lunds grocery store at 1201 Hennepin Ave.
The grand opening of the 20,000-square-foot store and the adjacent, 4,100-square-foot Lunds Wines & Spirits is set for June 14.
Aaron Sorenson, spokesman for Lund Food Holdings, said that the local grocery chain looked at a wide range of options after buying the 1201 Hennepin Ave. building in July 2005.
“Initially we purchased this site and had plans to build a grocery store here and were analyzing a number of different plans at that time. We were trying to figure out how to potentially operate a multi-level grocery store,” Sorenson said, noting that for a time the grocer was planning for a store in a different nearby site. “We ended up coming back to this site.”
For years, downtown residents and boosters have lamented the lack of a full-service grocery store in downtown Minneapolis. But today, competition is heating up. Austin, Texas-based Whole Foods Market Inc. will open another downtown grocery in fall 2013 in the 222 Hennepin project.
In addition to its planned store in downtown Minneapolis, Whole Foods also recently announced a new location in Maple Grove and is scouting other locations. Whole Foods spokeswoman Kate Klotz said that the national grocer sees a “great interest” in organic and natural foods in the Twin Cities.
In downtown Minneapolis, Lund Food Holdings ultimately decided that a multi-level store would be too complicated to pursue and instead opted for a 10,000-square-foot addition would allow a single-level grocery store. The original building dates to 1912.
“The single-level design let us maximize space. We were able to do more with the space,” Sorenson said.
The building will also offer 15,500 square feet of office space for lease on the second and third floors. The office space is not built out yet.
At 20,000 square feet, the store will be the smallest grocery store operated by Lund Food Holdings, Sorenson said. An average Lunds store is about 40,000 square feet, he said. Lund Food Holdings currently operates 10 Lunds stores and 11 Byerly’s locations in Minnesota, most in the Twin Cities area.
Sorenson said that the new Lunds store will follow the urban model set by its store at University Avenue and Central Avenue in northeast Minneapolis, which opened in 2006. That store is about 26,000 square feet and has a strong focus on “grab and go” foods. The Hennepin site will include about 80 surface parking spaces.
“Similar to Northeast, there will be an emphasis on prepared foods. It is absolutely a full service grocery store,” Sorenson said.
Lunds Wines & Spirits will be in a separate building at 1208 Harmon Place. A rain garden/patio seating area will be between the two buildings. Sorenson said that Lund Food Holdings operates eight other liquor stores.
Whole Foods Market recently opened its fourth local store in April at a location just a few blocks from a Byerly’s store along France Avenue South.
“It’s happenstance. That location was perfect,” Whole Foods spokeswoman Klotz said about the store’s proximity to Byerly’s in Edina.
When looking at new store locations, Whole Foods looks at a range of factors, she said. “We look at the ZIP codes of people who shop our current locations and how far they’re traveling to get to our stores,” Klotz said.
According to Hennepin County property records, Lund Real Estate Holdings LLC paid $3.7 million for the property at 1201 Hennepin Ave. and $1.5 million for the building at 1206 Harmon Place – the tax address for the liquor store property — in separate deals in 2005.
The 1201 Hennepin Ave. property is historically known as the Reno Motor Company Building and was home to a number of automobile showrooms until 1950, when it was converted to office space. The building was later known as the Billy Graham Evangelical Center. Lunds bought the building, which is within the Harmon Place Historic District, from the Billy Graham organization.
Matt Lindstrom, a spokesman for the city of Minneapolis, said the value of the building permits at the sites is $5.2 million for the Lunds store and $1.435 million for the liquor store.
The project team for the downtown Minneapolis Lunds store included Minneapolis-based Shea Inc. as the project architect, Golden Valley-based Zeman Construction Co. as general contractor, and the Minneapolis office of Cresa as real estate consultant to Lund Food Holdings.
A city of Minneapolis analysis of U.S. Census Bureau statistics shows 29,725 residents living in the core areas of downtown in 2010. That’s an increase of 56 percent since 1980. Meanwhile, many new apartment buildings are being planned for downtown, which will add more residents to the area.
“The downtown population has increased a lot,” said Herb Tousley, director of real estate programs for the University of St. Thomas. “If it’s done right, there is a market for these stores.”
Finance & Commerce reported in February that Lund Food Holdings has plans to raze its Edina store and replace it with a new store, additional retail and 163 market-rate apartments. And in downtown St. Paul, a 27,000-square-foot Lunds store is slated for the long-delayed Penfield apartment project, which is now close to starting construction.
“We’re looking forward to that project officially breaking ground and getting started,” Sorenson said of the downtown St. Paul project.
Minneapolis City Council Member Lisa Goodman has been a strong advocate of the downtown Lunds store.
“From the point of view of someone who lives downtown, this is like a dream come true. It’s been a long time coming and I commend Lunds for sticking with it,” Goodman said. “They’ve really done a remarkable job of maintaining some of the cool historical features of the building. … I think it will be really good fit for the neighborhood.”