Tuesday, December 29, 2009

Retail in Rogers

July 27th, 2009
Retail in Rogers

I was waiting in line at the Cartridge World store in Maple Grove with my
one little ink cartridge and Mary, the woman ahead of me, hadt his huge
order. I asked Mary if she had some special project and she said no, she
lives in St. Michael so when she comes to shop in Maple Grove she stocks up.

After Mary left I asked the clerk where their other stores were. He replied
Plymouth, Coon Rapids and Ostego. He said they get a lot of customers from
St. Michael/Albertville in their Maple Grove store. I asked why they didn't
have a store in Rogers and he replied "Rogers is kind of a no man's land".
Apparently other small retailers feel the same way.

There is over 100,000 square feet of vacant retail space in Rogers on the
I-94/Highway 101 corridor, most in the $18-$22 per square foot rent range.
You can find space in that same rent range in Maple Grove in older strip
centers near the high fashion retail corridor. While both communities are on
the I-94 Corridor with retail at major freeway exits, Rogers has an
estimated population of 7,200, versus 60,000 for Maple Grove.

While the demographics for Maple Grove are healthy for retail, Maple Grove
has become a regional shopping area, second only to the Mall of America for
total square foot retail. So the Maple Grove retail draws from a wide
region. Just try to find a parking space in Maple Grove before Christmas and
you'll wonder why anyone claims we're in a recession.

Driving around Rogers I can observe a retail strip center built in 2002 that
appears to be about 90% leased with small local businesses. But within a
block of that, across from a newer Cub, is a new center that is empty except
for a Jimmy Johns sub shop. And adjacent to the newer Rogers Movie theater
is a strip center that is 100% vacant. What were these developers thinking?

I suspect they were looking at their graphs and charts and believed that
Rogers retail was also a regional center because of Cabelas, the giant
outdoor store. Other national retailers have flocked to Rogers: Target,
Kohls, Best Buy, lots of fast food places. And a new Sleep Inn is under

The appeal for Rogers to Cabelas, along with the generous TIF package, was
to capture the 38,000 average cars per day going north on Highway 101, many
to their cabins. How well does this spill over to the smaller higher rent
retailers that would fill those empty strip centers? Are you going to pick
up your dry cleaning, buy a printer cartridge and get a pedicure on your way
to your cabin?

Now that Otsego has a huge Target store Rogers is unlikely to capture much
of that audience. St Michael/Albertville have smaller grocery stores and
limited retail (excluding the Albertville Outlot Mall which does not offer
printer cartridges and pedicures). Though I suspect most people from this
area, if they are going to get on I-94 to shop, just drive 10 minutes more
to shop in Maple Grove, bypassing Rogers if they want more than Target or
Kohls. And when they get to Maple Grove, like Mary, they stock up.

Unlike Mary who had a pile of cartridges, I was just buying one because its
a quick bike to the cartridge store for me. When I go to Trader Joes in
Maple Grove I just buy a couple things because its right off the highway
ramp on my home. But when I go to The Wedge Food Coop in Minneapolis I can
spend $200 because they have items I can't get in Maple Grove. So I stock up
because I don't get to the Wedge very often.

Looking at it from this perspective, I understand why Cartridge World, and
other small retailers, avoid Rogers because it doesn't have the regional
pull that results in customers buying more stuff on each trip. And, at
7,200, its not a large enough population to support the extra 100,000 square
feet of empty space.

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