As businesses downsize office spaces, cities work adjust to redevelopment

Companies adapting office space post-COVID

Many industries have changed structure since the onset of the COVID-19 pandemic, leaving companies to adapt their office space with it.

MINNEAPOLIS (FOX 9) - The COVID-19 pandemic has forced a significant shift in the workplace, leading many companies to adopt hybrid work models. As a result, large office buildings, once bustling centers of activity, are being left vacant. This has left cities to consider how these spaces could be repurposed.

A few months ago, Blue Cross Blue Shield's longtime headquarters in Eagan became vacant as the company consolidated its hybrid workforce into other nearby buildings. The 55-acre property became more unused and unwanted Twin Cities office space.

"There just isn’t enough interest or demand there right now to fill all these vacant buildings," said Jill Hutmacher, Eagan's Director of Community Development. "As well as some of these buildings, when they’re a bit older, there’s just not as much desire for them in the marketplace."

The proposal would require the city and the Met Council to amend the land use plan and approve a zoning change. "This is just another example of how the market is coming in, looking at what is there, and what might be a potential future. If it’s not office, what could it be?" Hutmacher added.

While there isn't much demand for the office space, there is interest in the property. The Eagan City Council Tuesday night is reviewing a concept by St. Paul's Johnson Brothers Liquor that would raze the complex and build a fully automated warehouse and distribution center. But first, the city must amend the land-use agreement for the property and bring about a zoning change.

The issue isn't confined to Eagan; it's a reality across the Twin Cities. Buildings like United Health’s Minnetonka headquarters are also up for sale. While the buildings themselves may not attract interest, the properties they sit on are highly desirable for redevelopment into retail, housing, or medical facilities.

Another property in Eagan that has failed to attract interest for its office space is Thomson Reuters. The company has a massive 279-acre property up for sale. Like the Blue Cross Blue Shield property, this would also likely require changes to land use and zoning.

"They are working at selling that property. We know they are speaking to people; I think they'll let us know when they have a deal done, and then we'll start speaking to developers about how that property might be changing," Hutmacher said.