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From:

Sent:
To:
Subject:

Louis F. Jambois
Monday, November 24, 2014 1:39 PM
Lee J. Krueger; Brenda L. Kyle; Monte M. Hilleman; Tonya K. Bauer
FW: Macy's

Fyi.

Louis F. Jambois
President
Saint Paul Port Authority
380 Saint Peter Street, Suite 850 | Saint Paul, MN | 55102
Web: sppa.com | Twitter: @ljambois_sppa

O: 651.204.6233 |

: lfj@sppa.com

From: Louis F. Jambois


Sent: Monday, November 24, 2014 1:29 PM
To: Doug Baker (doug.baker@ecolab.com) (doug.baker@ecolab.com)
Subject: Macy's

Hi Doug,
Below is the response from Target's real estate team on the Macy's site. It appears Target is taking a very conservative
approach. An urban Target in downtown St. Paul will require limited investment on the company's part because they will
be tenants. You can calculate the risk to shareholders better than we can, but it's possible that Target has made bigger
bets in its history. We recognize that Target has limited experience in downtown markets, so their hesitancy is
disappointing but perhaps not surprising.
Walgreens, on the other hand, is still very interested in the site and if Target doesn't want to proceed, we could go with
Walgreens.
In terms of comparing the two, we believe Target provides more sizzle and excitement for the entire
development. Downtown residents and employees definitely want a Target more than any other store. But from our
work to date, we know that Walgreens will pay more rent, and lease the space for a longer term. So Walgreens is more
attractive to the debt and equity world, and that's important to us as we continue to discuss the site with a variety of
prospective purchasers.
Lee will be talking with the Walgreens folks this week. We will continue to encourage their enthusiasm, but will hold off
forwarding a term sheet or Letter of Interest until you have a chance to talk with Target execs. If Target really isn't
interested in the site, we'll pursue Walgreens. If Target leadership is interested in downtown St. Paul, now is the time to
act. There is no better location in downtown for a Target store than the Macy's site.
As always Doug, thanks for everything that you have done to help us repurpose this property.
Louie

Louis F. Jambois
President
Saint Paul Port Authority
380 Saint Peter Street, Suite 850 | Saint Paul, MN | 55102
Web: sppa.com | Twitter: @ljambois_sppa

O: 651.204.6233 |

: lfj@sppa.com

From: Perri.Hite [Perri.Hite@target.com]


Sent: Saturday, November 22, 2014 10:28 PM
To: Lee J. Krueger; Matt Friday (matt.friday@cbre.com)
Cc: Brenda L. Kyle; Louis F. Jambois
Subject: RE: Macy's Update

Hi Lee,
Targets market research team toured the site and updated sales estimates. Based on a sample of factors Im sharing
below, an Express store would not generate the sales wed need to break even. Factors include:
Residential Population
Lack of residential population density
Prototypical Target Express locations have a trade area size of 20,000 people, but the downtown St. Paul road
connectivity puts the trade area in isolation
Fragmented residential population
Daytime Employment
Fragmented daytime population instills difficulty to serve all daytime population (capitol area, state office
buildings, across river, etc.)
High office vacancy at 18%
Traffic

Limited hours of traffic (Monday through Friday, 9-5); downtown is not busy during the weekend
Low car traffic counts
o Wabasha Street 8,800 daily
o Cedar Avenue 6,000 daily
o E 6th Street 8,687 daily
Low Pedestrian Traffic

Lee, perhaps well evaluate this again once the Saints stadium is complete. The Macys redevelopment alone is not a
game-changer that would make an Express format store profitable. We have a duty to our shareholders to build
profitable stores.
Lets keep in touch.
Perri
Perri A. Hite | Regional Real Estate Manager | Target
1000 Nicollet Mall, TPN 12 | Minneapolis, MN 55403
612.761.3184 (w) | 651.373.7883 (c) | 612.761.3727 (fax) | E-Mail: perri.hite@target.com

From: Lee J. Krueger [mailto:ljk@sppa.com]


Sent: Wednesday, November 19, 2014 7:11 AM
To: Perri.Hite; Matt Friday (matt.friday@cbre.com)
Cc: Brenda L. Kyle; Louis F. Jambois
Subject: Macy's Update

Hi Perri.
Is there a chance we can connect soon to give Target an update on our progress at the Macys Building in Saint
Paul? Also, has there been any new thoughts from Targets perspective?
Thanks.

Lee Krueger
Senior Vice President, Real Estate & Development
Saint Paul Port Authority
380 Saint Peter Street, Suite 850 | Saint Paul, MN | 55102
Web: sppa.com | Twitter: @sppa_cleandeals | @LeeKrueger1

O: 651.204.6226 |

: ljk@sppa.com

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