Civic center and economic development

People have come up to me, even legislators, and asked if Mankato's bonding request to expand the Verizon Wireless Center is anything that will really generate economic activity or benefit anyone other than those who do business near the civic center.

Well, my short answer is yes. And we can look to history as our evidence.

I covered business in Mankato from 1990 until 1996, and even some after that, but that was the period when the civic center was developed. The 1990 downtown Mankato was a very different place than it is today.

Extremely different.

The River Hills Mall opened in 1991 and much of the downtown "Mankato Mall's" retail left downtown for the mall on the hill. There was nothing that was going to stop this. The business trends were simply dictating it.

Retail tends to be a business that grows best and fastest when it is together in one location. That's not really rocket science.

So, we had all this infrastructure in the mall and the old Brett's building that was not going to be used for retail shopping anymore, or anytime in even the distant future.

The next idea was to create an entertainment district drawing people downtown for eating and drinking places. But you still need traffic to operate those businesses on any kind of scale.

As retail left, so too did the foot traffic. One could not operate a small sandwich shop successfully. Remember Ruth's deli? In the mall's heyday, she did just fine. When retail left, so too did Ruth.

So business and city leaders had to come up with a way to generate traffic downtown. You needed not only regular traffic but also event traffic.

City leaders moved on transforming the mall infrastructure into a government/office use with some success. But they needed to get things going by locating Mankato City Hall and the District 77 offices in what was the old JC Penney building. They also added on a facade and extra space.

But the city and school district offices were one of the first tenants in the new revitalized downtown space. That started the ball rolling. Later, developer Gordon Awsumb came into buy the balance of the mall and the Brett's building.

He was able to get other tenants like the Minnesota Workforce Center, Social Security and Public Defender offices.

It was important Awsumb not just get other business tenants. Businesses come and go. He landed the government office tenants that would bring some stability to the property. The property was sold as a "government services center."

That made a lot of sense.

The Civic Center came next. There was a referendum on imposing a local sales tax to pay for the bonds. It passed. The center was built and opened around 1995.

Since that time, the civic center has had up and down years for concerts, tradeshows and the like. That's not really surprising. Civic center business flows with the economy.

As a business reporter and observer and someone who has some training in economics (a master's degree), I would say that the downtown of 1990 Mankato was going nowhere without some help. It turned out to be government help, and the help of a developer who was able to purchase property at a price that posed little risk if things went south.

One by one, the buildings and infrastructure of the downtown mall would have turned into East St. Louis fast. You might have had a marginal business here or there, but in my mind it would have gone absolutely nowhere. We might have been famous for the ugliest downtown in outstate Minnesota.

The mall owner was going to let it go back to the bank, as they did the Brett's building.

These properties would have cost the city of Mankato much, much more to demolish or deal with than providing a developer with a subsidy or relocating their own offices.

Downtowns at the time were deteriorating all over in cities the size of Mankato.

Today, we've got development, we've got property values that have soared from their 1990 lows. We've got people who have a reason to come downtown. The crowds that come in for civic center events and hockey games would be unimaginable in 1990.

In 1990, if you would've have told someone that in five or six years, you wouldn't be able to find a spot to sit at one of six of seven restaurants before an event, they would have laughed at you.

In economics, you measure business in two ways. You either increase your profits, or minimize your losses.

Mankato was facing some huge losses in 1990 if it did nothing. I would say we not only minimized losses, but we pretty much hit this one out of the park.