Jon Miltimore explains why the Target corporate headquarters in Minneapolis will be given up — for reasons that go beyond the claimed success of the telecommuting encouraged by the 2020 pandemic lockdowns:
A building burning in Minneapolis following the death of George Floyd.
Photo by Hungryogrephotos via Wikipedia.
Target Corporation, the eighth largest retailer in the United States, announced in an email to employees on Thursday that it will be leaving the City Center, its primary downtown Minneapolis location.
Company officials cited improved remote work opportunities and less need for space as the drivers for the decision.
“In just one year we’ve proven that we can drive incredible results, together, from our kitchens and basements and living rooms,” said Melissa Kremer, executive vice president and leader of Target’s human resources operations.
Target, the largest employer in Minneapolis with some 8,500 corporate workers, says the 3,500 employees who work at the City Center will still have a “home base,” but it will be at another Minneapolis location or in the nearby suburb of Brooklyn Park.
A Story of Capital Flight?
On one hand, there is little reason to doubt Target’s explanation for abandoning its headquarters. Many anticipated that the pandemic would lead to a normalization of remote work.
“The future of work will be distributed,” Erica Brescia, the chief operating officer of Github, told the BBC last fall. “We’re going to see a big shift from office by default to remote by default.”
Part of that shift, it’s reasonable to assume, would be corporations moving away from high-end corporate real estate. Yet it also shouldn’t be forgotten (or ignored) that Target’s decision comes less than a year after Minneapolis suffered some of the worst riots in US history, prompted by the May 25 death of George Floyd.
The riots — which broke out after a video went viral showing police pinning Floyd, a 46-year-old black man, to the ground for nearly nine minutes before he died — caused an estimated $2 billion in damage.
Though Target made no mention of the riots in its announcement, last summer I noted that an abundance of evidence suggested that the economic damage of the riots would persist long after the wreckage had cleared.
Target still has their corporate headquarters hi-rise plus the hi-rise over their downtown store. They own those buildings. But years ago they purchased a lot of land in the suburb of Brooklyn Park, and have a lot office space there.
The lower levels in both are carefully designed to resist entry. Street level windows are backed by cinderblock walls. There’s not a lot of folks working in either right now.
The downtown store got hit in Riot 2.0 last summer, but not badly. They learned, and now the big entryway on the street has blocked the revolving doors. The liquor store never restocked, but can be reopened when things settle. There are a lot more security folks, and they have trained on how to close those entries very quickly.
That downtown store is very profitable, or was, when a lot of people worked downtown. Now they close at 6:00 p.m. Target has a lot of cash, so they don’t need to sell off the rest of the downtown office space right now at fire sale prices. But no matter how woke the corporate PR sounds, they’ll abandon that space if it looks, post-trial, like downtown is truly dead.
Comment by Gordon Scott — March 15, 2021 @ 14:42
Gee, it’s like like the polarization that occurred after the’67 Detroit riots was never studied and municipal authorities didn’t think to try and limit the scope of rioting nationwide because people would just ‘get over it’ and come back and through guilt, rebuild from the epicenter of the rioting? Everything that could flee Detroit has fled. The city still has some corporate cache, and millennials will move into gated urban and high-rise condos for zip code cred but, when it comes time to rear children and anticipate schooling, the suburbs are where they’ll flee. Detroit schools get most of Michigan’s edu-dollars per student. One would think that money would lead to improvement. It hasn’t.
Comment by BonHagar — March 15, 2021 @ 14:47
I do not disagree with any of John Miltimore’s opinions in this piece, however he has a couple of the facts wrong. City Center is one of three buildings Target occupies in downtown Minneapolis. It is also the only building they do not own (they have a lease on City Center through 2031, not sure if they think they will be able to break that lease). As such, City Center is most definitely NOT their “primary downtown Minneapolis location”, that would be Target Plaza North and Target Plaza South which they own outright, are Target-branded top to bottom, and house all Target executives up to and including the CEO. The picture used in the article is of Target Plaza North. City Center is used primarily by IT and HR. It only makes sense that they get rid of the only building the lease (they also own the Brooklyn Park campus) before they would get rid of owned real estate.
Comment by Gordy Dalman — March 15, 2021 @ 15:06
It’s my understanding that City Center only represents 1/3 of the 3 million square feet of office space Target holds in downtown Minneapolis. They still have Target Plaza, a 33 story tower a few blocks from City Center in addition to the Brooklyn Park Campus and perhaps some other leased space around town.
Comment by Big Cody — March 15, 2021 @ 15:29
Thanks for providing more context on this story. I’ve never been to Minneapolis — despite being a life-long Vikings fan — so this is all information I didn’t know.
Comment by Nicholas — March 15, 2021 @ 16:20
It is not only the Riots that have push Target to exit downtown Minneapolis. It is the acceleration of crime and lack of political will to fix it.
Comment by Jeff C Ertelt — March 19, 2021 @ 10:53