From the start, some neighborhood advocates questioned the wisdom of having a large pawnshop anchor an empty strip mall.
Could a used-goods store flanked by a payday lender drive economic development on St. Paul’s East Side?
The answer, it seems, is no.
On Feb. 20, Pawn America will close a 15,000-square-foot pawnshop that has served as the sole major tenant of 1855 Suburban Ave. for the past four years. An affiliated Payday America lending and check-cashing operation will close with it.
Building owner Peter Remes, a principal with the Minneapolis real estate firm First & First, said he might take legal action against Burnsville-based Pawn America over the broken lease. The empty strip mall, a former car dealership, will be put up for sale.
“We are exploring any and all options at this point,” Remes said.
Store officials did not return a reporter’s calls, but a public-relations agency speaking on their behalf indicated they blame First & First for not building out the strip mall and installing additional tenants.
“The short story is that the landlord did not deliver on the development of the larger retail area that included the Pawn America store,” said Mike Erlandson, a public affairs consultant who returned an email on behalf of Pawn America.
The pawnshop was once expected to help draw a series of additional restaurants and small businesses to Suburban Avenue Town Square, a former Chrysler car dealership that had been converted into a potential business center.
Pawn America has 24 retail locations throughout the Midwest, and PayDay America partners with 18 of them.
Plans had called for a Chipotle, Starbucks, Dairy Queen and Goodyear Tire, as well as a free-standing Cowboy Slims restaurant to fill the sizable car dealership lot.
Other than the pawnshop and its associated check-cashing operation, no other tenants ever moved in. As of Feb. 20, the strip mall will be empty.
Which location am I frequenting? pic.twitter.com/clBfxEji0q
— Frederick Melo, Reporter (@FrederickMelo) February 14, 2017
“They made a lot of promises about all the wonderful things they were going to build, and all the people that would be hired in the process, and how they were going to help with litter collection from the restaurants,” said Rich Kramer, who sat on the St. Paul Planning Commission when two different ownership groups received city approvals to install the pawnshop over his objections. “From the beginning, it was in trouble, apparently.”
Kramer, who sits on the Metropolitan Council, recalled members of the neighborhood district council looking to a proposal from the owner of a series of Cash-N-Pawn/Max It Pawn stores — which was later replaced by Pawn America — as an economic driver for the empty car dealership.
Rather than attract business, he maintains the stores blocked growth. No one, apparently, wanted to share close quarters with a pawnshop and check-cashing operation.
“It stymied any legitimate development on those sites for six or seven years,” said Kramer, who repeatedly voted against the project. “By choosing those developers and giving those approvals, it just froze it. I think there’s a lot of blame to go around.”
BIG AND EMPTY
The one-story structure at 1891 Suburban Ave. has an estimated market value of $3 million in Ramsey County’s property records. The building, which spans almost 26,000 square feet, was built in 1974; its current owners bought it for $2.6 million in July 2011.
Betsy Leach, executive director of the District 1 Community Council, said optimism around the time of the sale was high. In 2011, Max It Pawn owner Mark Smith told the Pioneer Press that his pawnshop would be the anchor of a $15 million strip mall project that would do far more than occupy the remodeled Suburban Chrysler dealership. Additional buildings would come quickly, he promised.
He spoke of restaurants, coffee shops, and an eco-friendly auto service that would change car oils in an environmentally friendly manner, maybe a pet salon. It made no sense to wait on piecemeal construction, Smith said at the time. He would fill the sizable site all at once.
“They don’t want me to propose a lot of great things and a lot of smoke, and when the dust settles, there’s (nothing more than) a pawn shop there in the car dealership,” Smith was quoted as saying in an April 2011 article in the Pioneer Press.
That month, the St. Paul Planning Commission voted to support his project, despite its proximity to a check-cashing and money transfer operation called Piggy Bank Checks Cashed, which had been located up the street near White Bear Avenue and a Target Department Store.
City rules required 1,320 feet of separation, and the two sites sat about 1,050 feet apart.
Smith soon abandoned the project, but Remes and his First & First development team saw an opportunity. The Minneapolis company purchased the vacant car dealership and moved in Pawn America, which branded the store “PA Exchange,” with more of a thrift-store feel than a traditional pawn shop.
“People were hopeful when First & First picked it instead of the guy from Max It Pawn,” Leach said. “Of course, the rest has been sitting there vacant.”
In a 2013 announcement from the Rixmann Cos., Pawn America’s parent company, officials said the PA Exchange concept would focus exclusively on retail and not offer loans, purchases or financial services in-store.
Nevertheless, the company brought in a payday lender, PayDay America, which offers check cashing and high-fee cash loans of up to $1,000. The lender nestled in next door to the retailer, with which it shares a lobby entrance.
In exchange, Remes agreed to buy out the Piggy Bank Checks Cashed, to the delight of the neighborhood district council, which backed his variance request. Check cashers and pawnshops are both viewed by the city as lenders and cannot ordinarily be situated next door to each other. The city made an exception.
“We supported that because it basically consolidated all of those things in one place, and (the Piggy Bank) was not available for check cashing,” Leach said.
Remes, like Smith before him, had also spoken of the strong likelihood of bringing in a series of smaller tenants, including Starbucks and Chipotle. No construction ever took place.
What deterred potential lease-holders? “Pawn America — their presence on the site,” said Remes on Wednesday. “The market response was to the negative connotation of Pawn America, and other businesses being next to a pawn store.”
The relationship between First & First and Pawn America has since soured, and Remes said he now plans legal action against the store chain for allegedly violating its lease. Leach said it’s clear the company had expected First & First to add to the strip mall and create free-standing structures, which never happened.
“They were expecting the whole lot to be built out, and that that would have brought additional traffic,” Leach said.
She’s not optimistic for the immediate future.
“I’m getting calls from neighbors saying ‘Is something going to move in?’ You know what? It’s going to sit vacant for a while,” she said. “Who wants to move in next to an ugly vacant lot? It needs a much denser development than even what was proposed. Less than half of the lot (is occupied).”
