Howie's daily column is sponsored by Lyric Kitchen Bar in Downtown Duluth.
The cranes are still there. The lights still come on at night. The elevators still rise 30 stories above Nicollet Mall and Rice Park and the Mississippi River. But let’s stop pretending the downtowns of Minneapolis and St. Paul are waiting for some magical return to 2019.
They are not.
That version of downtown — five-day office workers pouring out of parking ramps every morning with cardboard coffee cups and dry-cleaning tickets — is gone. Not wounded. Gone. The pandemic accelerated it. Remote work institutionalized it. Technology finalized it.
Now comes the harder question confronting Minnesota’s two largest urban cores: What do these downtowns become next?
Because despite the handwringing, the collapsing office valuations and the frightening vacancy numbers, this is not necessarily the death of downtown Minneapolis or downtown St. Paul. It may actually be the beginning of something smarter, denser, more resilient and more alive than the old commuter model ever was.
But only if civic leaders stop trying to refill every empty office floor with more office workers. That ship has sailed downriver.
Downtown Minneapolis office vacancy climbed above 25 percent this year, according to CBRE, while other reports place overall Twin Cities office vacancy hovering near or above 20 percent depending on market classification. St. Paul has faced even steeper challenges, with some downtown vacancy measurements previously topping 30 percent. Those are not temporary numbers. Those are structural numbers.
The brutal reality is that many aging office towers simply are not economically viable as offices anymore. Not all of them. But many of them. Particularly the older Class B and Class C inventory with outdated floorplates, inefficient mechanical systems and limited modern appeal. Some buildings will survive. Some should not.
And Minnesota’s political and business leadership needs the courage to admit the difference.
The future of downtown Minneapolis and St. Paul will not be built around one single use. That era created the fragility now haunting both cities. When downtown exists primarily as a weekday office park, it collapses the moment workers stop commuting.
Instead, the next generation of downtown must function as a full ecosystem.
Housing. Education. Health care. Entertainment. Public gathering space. Hospitality. Startup incubation. Research. Technology infrastructure. Urban logistics. Culture. Telehealth. Tele-education. Mixed-income living. Maybe even data centers in carefully selected buildings.
Yes, data centers. Gulp, indeed.
The old instinct is to recoil at the idea because data centers are not romantic. They do not create bustling sidewalks filled with lunch crowds. But downtown revitalization is no longer about romance. It is about adaptive survival.
Some obsolete office buildings may never convert efficiently into apartments because of floor depth, plumbing limitations or economics. But certain heavily powered towers may actually fit emerging technology infrastructure demands surprisingly well. The market already is showing how valuable digital infrastructure has become. One recent Twin Cities office transaction tied to expanded data-center capability dramatically outperformed assessed values.
That does not mean Minneapolis should become one giant server farm. It means leaders must stop treating downtown reinvention as a purity test.
Every successful downtown in America over the next 20 years likely will become hybridized.
Part residential neighborhood. Part education hub. Part medical corridor. Part entertainment district. Part digital infrastructure center.
The encouraging part is this: St. Paul already appears psychologically further along in accepting this reality.
City leaders there openly are embracing office-to-housing conversion strategies. Projects like the Landmark Tower redevelopment into nearly 200 apartments demonstrate that adaptive reuse can work under the right conditions. The city’s long-term ambition to add 20,000 residents downtown is exactly the correct framework.
Because residents save downtowns. Not commuters.
Residents buy groceries at night. Residents walk dogs at 9 p.m. Residents support pharmacies, coffee shops, corner markets and restaurants seven days a week. Residents create organic public safety through human presence and constant activity.
Downtown Minneapolis needs the same philosophical shift. Not cosmetic slogans. Not another consultant presentation. Not another “visioning exercise” with colored maps and interchangeable buzzwords.
Actual density. Actual neighborhood-building. Actual mixed-income residential growth at scale.
And here is where Minnesota possesses an enormous opportunity hiding in plain sight: education and health care.
Imagine portions of downtown Minneapolis evolving into major hybrid teaching districts tied to the University of Minnesota, private colleges, workforce retraining programs and remote-learning infrastructure. Imagine downtown St. Paul becoming a national center for telehealth administration, medical simulation labs, nursing education and hybrid-care coordination connected to Minnesota’s globally respected health systems.
That is not fantasy. That is economic alignment.
Minnesota already is strong in medicine, education, medical technology and health systems administration. Why wouldn’t downtown redevelopment lean directly into the industries where the state already possesses national credibility?
The office towers do not necessarily need thousands of insurance adjusters and middle managers anymore. But they may absolutely support simulation labs, educational studios, research partnerships, telemedicine command centers and student housing.
The future office worker may partly be a student. Or a nurse educator. Or a telehealth specialist. Or an AI engineer managing cloud infrastructure. Or a startup founder working in a shared live-work environment three days a week instead of five.
The old downtowns were monocultures. The new downtowns must become layered ecosystems.
That transition will not be painless. Some buildings likely will be demolished. Some property owners will lose fortunes. Tax structures may need rethinking as commercial values continue falling. Minneapolis commercial property values already have plunged sharply, shifting more tax burden toward homeowners.
But decline is not destiny.
American downtowns historically reinvent themselves every generation or two. Warehouse districts become loft districts. Industrial corridors become medical corridors. Rail hubs become entertainment hubs.
The Twin Cities are not dying. They are between identities. And perhaps the biggest mistake Minnesota could make right now would be trying too hard to recreate the last one.
