11/3/2009 by Patrick Garmoe

(Photo: From left, Gayle Ankarlo and Beth Wentzlaff of Consulting Management & Realty Associates, and John Stearns, site project manager for the Koehler Organization. Behind the trio is the new Duluth Residence Inn, set to open in early June.)

The corner of Central Entrance and Myrtle Street near Duluth’s Miller Hill Mall gives rise to a future extended stay Residence Inn, set to open just before the 2010 Grandma’s Marathon.

Barely a stone’s throw away, across from Home Depot, construction is underway on a Texas Roadhouse. Companies Culver’s and Buffalo Wild Wings both have announced plans to open restaurants near the mall.

The new restaurants and upgraded roads going in over the next couple years in this mall district could telegraph the beginning of a string of significant upgrades to the region’s biggest shopping area. To guide that expected retail expansion along Central Entrance between Pecan Avenue and Haines Road, on Sept. 14 the Duluth City Council unanimously approved a new land use plan in the Miller Hill corridor. It frees up more space for office and commercial use, and communicates city priorities to developers.

A new shopping era

“It’s just a whole new mindset,” said Beth Wentzlaff, broker and president of Consulting, Management & Realty Associates. “I think we’re on the right track.”

More space for office and retail naturally will make rents a little cheaper, and allow for more stores to move into the area, Wentzlaff said, echoing the city’s report.

“Average lease rates for the majority of the retail space in the Miller Hill area (excluding Miller Hill Mall) is in the $10 - $15 per square foot range, which represents a challenge for any new developers wishing to create a newer, modern retail environment, given current construction costs,” states the city’s small area land use plan. It is based on information compiled by planning firm MXD Development Strategies Ltd.

The retail development consulting company estimated the area would add about 27,000 square feet of retail space— equivalent to the typical Target store— every five years.

Meanwhile, Wentzlaff’s group is talking with several companies – including Dunkin’ Donuts and Chipotle — for a restaurant next door to the future Residence Inn. National chains are calling more often than last year, but getting new restaurants here is never an easy sell, she said.

Many major chain restaurants consider only Duluth’s population, ignoring its status as a tourist hub and regional shopping magnet that generates $4 billion in annual sales from shopping, dining and entertainment, she said. A decade from now, that figure is expected to be $5 billion, the MXD study said.

“It’s hard to get that across to these retailers,” she said.

To help secure a bigger, better shopping area, the land use plan encourages developers to consider creating a more bike and pedestrian friendly area, with a central open air shopping feature called a “suburban town center” — a cluster of offices or stores in one building with a courtyard setting, anchored by an entertainment center like a movie theater. The mission would be to enhance the mall, not replace it.

“The mall is the anchor for that entire commercial area,” said Cindy Petkac, the city’s land-use supervisor. The central mission of the land use plan is to ensure the viability of the mall, Petkac said.

The plan’s authors highlighted stores like REI, Ethan Allen, the California Pizza Kitchen and Brunswick Bowling & Billiard as ideal targets for such an area.

“The market study shows that there’s demand for it,” Petkac said.

Beyond Duluth

Mike Lundstrom, executive director of the Hermantown Area Chamber of Commerce, views the plan as a critical aid for setting a vision for future development.

“I applaud this report,” he said. “Frankly, this Miller Hill area is looking a little tired and weary.”

He also loved the concept of a suburban town center.

“I think it’s a fantastic idea, I think they can centralize and focus a development that works together,” Lundstrom said. “That’s the type of thinking that takes us from 1979 to 2010.”

Of concern to him are phrases in the report characterizing Hermantown as competitor to Duluth, instead of economic ally.

“The competitive effect of Hermantown and its critical mass of retail needs to be mitigated by an effective districting strategy. Specifically, priority should be given to development sites that are located away from the city boundary, as this will serve to contain the level of cross-shopping and sales leakage from Duluth,” the report stated.

Lundstrom countered the Miller Hill area is the shopping hub for the region, and ought to be strategically viewed as such, because shoppers don’t recognize borders.

“Businesses don’t care if their customers are coming from Hermantown or Duluth,” he said.

Petkac said the study’s authors were charged with focusing on land uses for the core shopping area within Duluth’s city limits, and the language simply reflects that.

Regardless, Lundstrom said this plan also will help the shopping district unite behind a central vision, like other Duluth neighborhoods.

“Miller Hill has suffered from not having a common voice,” he said, adding a study like this that helps develop a game plan for boosting economic development is a definite positive step.

Patrick Garmoe is a freelance writer living in Duluth. You can reach him at www.patrickgarmoe.com.

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