VACANT YOUNKER'S SPACE HAS FOUND A BUYER

Younker’s during it’s closing sale in 2018 (MPR News)

What once was retail is now becoming space for healthcare.

It was a tough year last year at the Miller Hill Mall when not only Younker’s closed but also Sears, both due to bankruptcies. Many malls across are losing one anchor tenant, but to lose two within months of each other is very uncommon. The two closures left almost 300,000 square feet of vacant retail space at the Miller Hill Mall resulting in a major leasing challenge.

But good news, the vacant Younker’s space at the Miller Hill Mall officially has a buyer.

Essentia Health has purchased the vacant space for $3.2 million. The building covers 145,000 square feet of space on two levels and has two different access points to the interior of the mall along with two different access points on the exterior leading to a large parking lot.

A RETAIL EPIDEMIC

While many were hoping for more retail to take over the space (rumors of Dillard’s even surfaced earlier in the year) the purchase by Essentia Heath and the change in use of the space is actually very common in the mall world these days.

Vacant Younker’s space (TDTDULUTH)

With large vacancies occurring at malls throughout the country property owners have needed to get creative in finding ways to fill them and trust us, they have. Spaces have become large fitness centers, universities, creative office space, housing and more.

In the Twin Cities multiple malls are dealing with the closing of anchor tenants just like the Miller Hill Mall. Southdale Center in Edina lost anchor tenant JCPenney and in response sold the vacant space to LifeTime Fitness who has since then torn down the building and is now constructing a massive fitness center, co-working space and retail space. Just North of Minneapolis Rosedale Center is dealing with the same problem of losing an anchor tenant when Herberger’s closed last year. Sources have stated that the JLL, the company that owns Rosedale Center, has plans to tear down the Herberger’s space and in its place build a large mixed-use development with housing, a hotel, retail/restaurant space and more.

So, with all this being said Essentia Health moving into the former Younker’s space isn’t out of the norm, it actually IS the new norm.

WHAT’S INSTORE (LITERALLY)?

That’s a good question. Not many details on what Essentia Health plans to do with the space have been made public.

Rumors are swirling that the Essentia Health Fitness and Therapy Center located at 402 E. Second St. will be relocating from Downtown Duluth to the Younker’s space. The reason for the move is due to Essentia Health’s $800+ million “Vision Northland” plan which will replace the center with a large new medical building/campus.

The relocation makes sense overall but the question that we are pondering is whether or not Essentia Health will truly take up the entire space.

WHAT WE THINK THE FUTURE COULD HOLD

To begin with, it’s a lot of space. Because it’s a lot of space it would make sense for Essentia Health to take over the upper floor and a portion of the lower level while designating some of the space that is directly next to the mall corridors for retail use. Whether or not Essentia Health would own that space and lease it themselves or potentially even sell it to the mall’s owner, Simon Properties, is a question that still remains.

Here’s another thing that could happen. Essentia Health could demolish the existing building altogether.

Sounds pretty crazy… but it’s actually not when you think about it. Essentia Health is currently investing millions in a new Health and Wellness Center just down the road in Hermantown. What that might mean is that not all of the services currently offered at the downtown fitness center would transfer (i.e. the swimming pools) to the Younker’s space as they may be offered at the Hermantown Wellness Center. And, if they do plan on offering the exact same services there is going to need to be some SIGNIFICANT construction occurring in the existing space in order transform it. There’s a potential chance that the overall cost for rehabbing the current space might actually be more than just building an entirely new building itself.

At the moment we don’t have many details to share on the exact plans that Essentia Health has instore but when we do we’ll be sure to post more information about them right here.