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Outlet malls often spur commercial development

Will Pinnacle Village have an impact on retail businesses in town?

City planners familiar with outlet malls said this fall that it could influence commercial development.

"I'm not sure that the mall will have a major economic impact on Bemidji since you already have some of the big-box stores there," said Alan Cottingham, the planning director for the city of North Branch. "If anything, it may help strengthen the area as a regional center."

Outlet malls aren't a new concept in Minnesota, but Pinnacle Village would be one of the first constructed outside the Twin Cities metropolitan area.

The most recently built outlet mall is Albertville Premium Outlets in Albertville, Minn., located about 45 minutes northwest of Minneapolis. Albertville Premium Outlets opened in spring 2004, and Albertville City Planner Alan Brixius said the mall is the city's largest city tax generator.

"Commercial land prices increased significantly in Albertville since the introduction of the outlet mall," he said.

Bemidji and Albertville are not identical cities - while Bemidji has already cemented itself as a regional center, Albertville, thanks in large part to the outlet mall, has become a destination spot for shopping.

Another difference is population. In the 2000 census, Albertville had a population of 3,621. In 2006, the city estimated that it had 5,615 residents. Bemidji had a population in 2000 of 11,917.

But like Bemidji, Albertville, located about halfway between Minneapolis and St. Cloud, has separated its big-box stores and national chains from its local businesses.

Not that this is necessarily a good thing, Brixius said.

"The newer restaurants have locations and new facilities that have put them in a competitive advantage over older restaurants and taverns in the city," Brixius said.

But, the outlet mall also has spurred commercial development in Albertville, he said.

"Since the introduction of the outlet mall, Albertville has experienced additional commercial growth," Brixius said. "A lot of this growth can be attributed to having the outlet mall in the community."

Since the outlet mall opened, Brixius said additional retailers have located near the outlet mall. They include Slumberland Furniture, Seasonal Concepts, Welcome Furniture, Ashley Furniture, Second Wind Fitness and Minnesota Lighting and Fireplaces.

"Hospitality businesses including Country Inn and Suites along with a variety of restaurants have come to Albertville," Brixius said. "In my opinion, we would not have the number of new hospitality businesses currently in place without the outlet mall."

Further east, the Tanger Outlets in North Branch is at the intersection of Interstate 35 and Highway 95 in Chisago County. The city is about 40 minutes from Minneapolis.

North Branch had a population of 8,023 in the 2000 census.

Cottingham, the planning director for the city of North Branch, has been with the city for about six years - the outlet mall opened in 1992.

"Since it was constructed, there have been other stores constructed around (it), primarily furniture stores, but also one appliance store," Cottingham said.

He said a nearby movie theater expanded its offerings from four to seven screens.

How did the outlet mall impact local businesses? Cottingham said the downtown has endured some turnover since 1992, but still has "many of the same uses."

"There are also a couple of restaurants that have been constructed by the mall that would probably have been constructed whether the mall was built or not," he said.

The other Minnesota outlet mall is in Medford, about 50 miles south of Minneapolis.