Developers Want to Skip Ground-Floor Retail Requirements

Minneapolis developers are agitating against the requirements of mixed-use zoning, saying that it's impossible to find a good tenant for ground floor retail these days.

2 minute read

August 12, 2020, 6:00 AM PDT

By James Brasuell @CasualBrasuell


Ground Floor Retail

Most of the ground floor retail spaces included in the Lowa46 Apartment complex in Minneapolis have been vacant since opening. | Google Streetview

"Curt Gunsbury wants to replace a vacant parking lot and auto repair shop in northeast Minneapolis with a seven-story apartment building," according to an article by Jim Buchta and Dee DePass, but there's a catch. "City zoning rules say that because the site is in a commercial zone he’s required to devote a portion of the building to storefronts. Gunsbury says prospects to fill that space are dim."

Gunsbury points to empty storefronts on the blocks near the proposed developments as evidence of the difficulties of filling any ground floor retail, and also says that empty retail space is passed on to apartment tenants in the cost of higher rents. 

"So Gunsbury plans to ask the city for permission to replace some of that required commercial space with walk-up apartments, which are easier to fill than retail," report Buchta and DePass. 

According to the article, Gunsbury is far from alone. "With rising commercial vacancy rates in the Twin Cities, developers are imploring city planners to let them build more apartment units on the street level where commercial space is now required. While planning departments try to make cities more livable with such mixed-use projects, developers argue vacant commercial space increases rents at a time when renters can least afford it. Plus lenders are less willing to finance such projects."

Mixed-use development is desired by planners for its benefits in creating walkable, urban neighborhoods, and according to this article, the concept still has political support. Minneapolis City Council Member Andrew Johnson, for example, is quoted in the article saying developers should reevaluate their commercial rents and place smaller, independent retailers in some of the vacant spaces. 

Jeffrey Herman, president of Urban Anthology Commercial Real Estate in Minneapolis, is quoted in the article arguing that COVID-19 is gutting urban commercial markets, in Minneapolis and elsewhere. Not coincidentally, Conor Dougherty and Peter Eavis wrote an article in June 2020 making a similar case, but for the real estate market in New York City.

Tuesday, August 11, 2020 in Star Tribune

View of Mount Hood at golden hour with Happy Valley, Oregon homes in foreground.

Clackamas County Votes to Allow ADUs, Residential RVs

County officials hope the zoning changes will help boost the housing supply in the region.

June 18, 2024 - Mountain Times

Single-family homes in a suburban neighborhood in Florida.

New Florida Law Curbs HOA Power

The legislation seeks to cut down on ‘absurd’ citations for low-level violations.

June 16, 2024 - The Guardian

Aerial view of intersection in New York City with yellow cabs and zebra crosswalks.

Planners’ Complicity in Excessive Traffic Deaths

Professor Wes Marshall’s provocatively-titled new book, "Killed by a Traffic Engineer," has stimulated fierce debates. Are his criticisms justified? Let’s examine the degree that traffic engineers contribute to avoidable traffic deaths.

June 13, 2024 - Todd Litman

View of Palos Verdes Drive along Pacific Ocean in Palos Verdes, California at sunset.

Erosion Threatens SoCal Road, Lloyd Wright Icon

The city of Palos Verdes is closing parts of a roadway to cyclists, citing safety concerns as the land underneath moves between 7 and 12 inches per week.

4 hours ago - Daily Breeze

Faded image of vacant storefront in rural area with American flag stars painteind on windows.

COVID Isn’t to Blame for the Retail Vacancy Crisis

A drop in demand for retail space began well before the seismic shifts of the pandemic.

6 hours ago - Slate

Heavy New York City traffic headed toward Holland Tunnel in Manhattan.

Judge Rules in Favor of MTA in Congestion Pricing Suit

Advocates of the program are calling on Gov. Hochul to reinstate the program in light of the decision.

June 23 - StreetsBlog NYC

City Planner I

Department of Housing and Community Development

City Planner II

Department of Housing and Community Development

City Planner Supervisor

Department of Housing and Community Development

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.