Macy’s, Inc. has announced the completion of the sale of its downtown Minneapolis property located at 700 Nicollet Mall. The property was acquired by 601W Companies, which is planning a major mixed-use redevelopment for the historic building.
The purchase price for the property was $59 million in cash. Macy’s, Inc. will record a gain for the property of approximately $47 million in the first quarter of 2017. The gain was originally anticipated and included in 2017 earnings guidance previously provided by the company.
On January 4, the company announced it had signed an agreement to sell the downtown store building. Today’s announcement is the finalization of that agreement. A final clearance sale in the store began on January 9, and is expected to run until late March. The company anticipates that the store will close in spring 2017.
The company noted that it has been honored to continue the traditions of the Downtown store that the community has cherished for decades and is committed to ensuring that much of the Dayton’s heritage is preserved. For instance, the Dayton- Hudson archive display will be moved and displayed in the Southdale store. The Oval Room merchandise will be available at the Southdale store, which includes designer labels such as St. John, Max Mara and Armani Collezioni. Macy’s also has donated archival items to the Minnesota Historical Society, including past iconic events’ displays, props, floor plans, candy kitchen machinery and molds.
The original location opened as a Dayton’s store in 1902 and was expanded several times until 1945. The store was renamed as Marshall Field’s in 2001. Marshall Field’s was acquired by The May Department Stores Company in 2004 which, in turn, was acquired by Macy’s, Inc. in 2005. The Marshall Field’s nameplate was changed to Macy’s in September 2006.
Going forward, Macy’s workforce in the Twin Cities area will include approximately 1,500 associates. This includes 90 Macy’s associates working in various district offices on the upper floors of the downtown Minneapolis building who will be relocated to space in other Macy’s stores in the Twin Cities area. The current downtown Minneapolis store workforce includes 280 employees. Associates displaced by the closing may be offered positions in nearby stores where possible. Eligible full-time and part-time store associates who are impacted by the store closing will be offered severance benefits if positions are not available in other locations.
“As a part of our overall real estate strategy, Macy’s has been investigating the best possible use for this property, especially given the large amount of unproductive and unused space on the upper floors,” said Jeff Kantor, Macy’s chief stores officer. “We have talked with a wide variety of partners in pursuit of a plan that would create the most value for the company and the community, and are pleased that the new owner intends to invest substantial capital to repurpose the building. 601W Companies has an exciting vision to redevelop the building into creative office space on the upper floors and to pursue retail opportunities on the street and skywalk levels. We believe this will be an outstanding addition to the downtown Minneapolis community in the heart of the city.”
“Macy’s – and originally Dayton’s – has served the downtown Minneapolis community at this location since 1902, and we deeply appreciate the relationships we have built with generations of Minnesotans, including our customers, associates, community leaders and elected officials,” Kantor continued. “While we will not operate a downtown store going forward, Macy’s remains committed to our customers and associates at eight other stores in the Twin Cities, including six department stores and two furniture galleries, as well as on macys.com.”