BLOOMINGTON, MN-The worker shortage is the top challenge, a Minnesota Shopping Center Association survey finds. The best opportunities for shopping center developers in the Twin Cities include in-fill development, restoration, and new and mixed-use development. The biggest challenges for them include lack of employees, real estate taxes, competition, and municipal requirements. Meanwhile, shifting demographics are both a big opportunity and a big concern. That’s according to a recent survey of members of the Minnesota Shopping Center Association based here.

Infill opportunities have been moving up the survey list in recent years, and members said that small projects are working well and municipalities are making funds available for this type of development. A new opportunity on the list is mixed-use development, combining residential and retail, which one member identified as a “major part of business in the next decade.” But one member cautions that many Minnesotans are still “uncomfortable with urbanized living.”

As for challenges, the tight labor market in the Twin Cities has made it difficult for retailers to find workers, and has prevented some of them from adding new stores to the market. The issue of Minnesota’s high real estate taxes is back near the top again in the No. 2 spot. That issue dropped from the No. 1 concern in 1998 to No. 4 last year after some modest tax reform. But members cite the state’s high commercial property taxes as a competitive disadvantage in drawing new retailers to this market. What’s more, while sales are rising on average about 8.3%, a quarter of the survey respondents saw their taxes go up more than 5%. Competition is a rising concern, in part because many of the new projects have the same types of tenants.

New to the list is a rising concern that the approval process is become more involved and taking longer, as well as community mandates making the development process more difficult and costly.

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