St. Paul Port Authority looking to buy former Kmart site near I-35E

The St. Paul Port Authority is expected to vote Tuesday afternoon to purchase the site of a closed Kmart on Maryland Avenue E., near Interstate 35E in the city’s North End.

The agency has been eyeing the 12.6-acre Kmart site for 20 years, President Todd Hurley said, since the authority developed other industrial parks nearby, and has been in serious talks with the owners since the store closed in 2019.

”We’ve had some successes in the neighborhood here,” Hurley said. “We are looking for a continuation of the activities that is on these sites.”

The authority intends to buy the site for $9.5 million, financed by a 2023 city loan to be repaid with tax increment financing. Hurley said $9 million will be due at closing, with the remaining $500,000 to be paid when a development agreement is signed or in three years, whichever comes first.

The money does not include the cost of demolishing the building and cleaning up any pollution that might be on the site.

The vacant Kmart site pays about $175,000 in property taxes per year, but Hurley said he is confident a redevelopment will increase the site’s value.

Three nearby industrial parks, which the authority redeveloped in the late 1990s and early 2000s, contribute $500,000 to $2.5 million in property taxes, Hurley said, more than quintupling their pre-development assessments 20 years ago.

Interest in those industrial parks is still strong, he said. The current owner of the Kmart site, New York-based Shidler/West Finance Partners, bought a parcel in the neighboring Arlington Jackson business park in 2019.

Hurley said the location near I-35E will make it a desirable property for light industrial use.

The neighboring Wendy’s restaurant remains open, and the land it sits on is not included in the deal.

Save brief stints as the St. Paul impound lot and police dog training area, the Maryland Avenue lot has been empty for five years.

The Kmart site is one of a handful of large vacant lots left in St. Paul by big-box store closures in the years before the pandemic.

The Maryland Avenue Kmart closed in December 2019, as Kmart’s parent company, which also owns Sears, shuttered nearly all of its stores. The Midway Walmart closed the same month, and the Rice Street Sears was closed in early 2019.

“The redevelopment of the former Kmart site is a powerful example of transforming underutilized spaces into vibrant hubs that drive economic growth,” Mayor Melvin Carter said in a statement ahead of the vote.

“Redevelopment of this industrial site is a long-overdue win for the North End neighborhood,” said Council Member Hwa Jeong Kim in a statement.

The City Council will vote on the purchase at its meeting Wednesday.

A Minneapolis Kmart site on Lake Street and Nicollet Avenue is also targeted for redevelopment, with Minneapolis officials aiming for a mix of apartments and businesses on the empty block.