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First phase of Block E opens
By Dan Olson
Minnesota Public Radio
August 5, 2002


Last minute haggling over design details, such as where to place public restrooms, is clouding the opening of the Block E entertainment complex in downtown Minneapolis. Commuters and others will be able to use the new underground parking ramp beginning Monday. The hotel, movie theatres and restaurants built on the once-vacant land also open soon. Plans for rehabilitating Block E began 15 years ago.

Block E
The $170 million Block E entertainment complex in downtown Minneapolis is nearing completion. The new underground parking ramp opens Monday, and various merchants will open in the fall. See more images.
(MPR Photo/Art Hughes)

The jousting over Block E is going right down to the wire. The dispute now is over where to put public restrooms. Earlier, city officials professed surprise that outdoor escalators - a daring concept given the state's climate - disappeared in the final plan.

The disagreements symbolize Block E's tumultuous history. Contending voices argued for open space over retail. Retail won.

The view held by Downtown Minneapolis Neighborhood Association board member and resident Larry Calhoun is widely shared - the fight over what to build on Block E, a prime piece of Hennepin Ave. real estate, is over.

"I think the best thing downtowners...can do, now that there's so much taxpayer money in it, is let's make it successful, let's make it as good as we can have it," says Calhoun.

Minneapolis has invested nearly $40 million in Block E. The money helped developer Dan McCaffrey and his partners finance the $170 million project. What does the money buy? There's a luxury hotel, several bars and restaurants, a book store, coffee and juice shops, 16-screen movie theatre, and skyway connections across Hennepin and First Aves.

Block E
An artist's rendering of the new Borders book store, being constructed on one corner of the Block E development.
(Image courtesy of the city of Minneapolis)

Downtown Minneapolis already has bars, restaurants, hotels and book stores. Why build more? Minneapolis Community Development Agency senior project manager Phil Handy says Minneapolis' and other downtowns have discovered - more draws more people.

"And usually the more that is there, and the different kinds of attractions and offerings that are there, the better," says Handy.

The movie multiplex is one of Block E's most controversial pieces. Several U.S. movie theatre chains are enduring hard times. What's to say the Block E screens won't go dark soon after they're opened?

The answer, Phil Handy says, is that movie theatre owners in financial trouble are those carrying too much debt from building too many multiplexes. Handy says Crowne, the owner of the Block E theatres, is financially stable.

Who'll buy tickets to view movies downtown when they can drive to suburban screens surrounded by vast seas of parking? Handy says they will be viewers who don't want to drive to screens in distant suburbs.

"The more that is there, and the different kinds of attractions and offerings that are there, the better."

- Phil Handy, Minneapolis Community Development Agency

"All of them are located in second or third-ring suburbs, or even further out. That leaves a huge market area, a huge population base in the center of the metro area, that doesn't even have these. And it's that urban market that we are looking to, and hoping that this product fills," Handy says.

Parking is another nettle for Block E skeptics. Who's willing to pay downtown rates? The answer to that question is - apparently lots of people. Downtown is already a hub for crowds of evening bar-hoppers, theatre-goers and others seeking entertainment. Thousands of convention-goers supply a sort of captive audience.

Boosters are counting on the Hiawatha light rail line to deliver more downtown patrons when service begins next year. Block E spokesman Tom Joyce says the merchants are looking for ways to soften the parking cost.

"We've talked about some of that and that's still being determined, but I would expect there'll be some givebacks," says Joyce. "We've also talked - within the property - (about) people coming to the Crowne theatre and coming to the Hard Rock (and getting) a discount, or something like that. A lot of the tenants are getting together right now to talk about some of the promotional opportunities to share with each other."

Most Block E merchants open this fall. The hotel opens early next year. Minneapolis officials are counting on a $2 million stream of property tax revenue to pay off bonds sold to help finance the project. More revenue to retire bonds, officials say, will come from the city's 3 percent entertainment tax on drinks and rooms at Block E, which will yield another $900,000.

Will Block E work? It replaces a crime-ridden and blighted collection of bars, adult book stores and other seamy attractions - which was torn down in favor of a large city-owned parking lot. But there's still contention over the 15-year long process to replace all that with what promoters are calling an entertainment complex they hope will attract many people.