NOVEMBER 2012 Minnesota Shopping Center Association Vol 26. no. 11

In this Issue

Property Claim ------FEATURE 1

Yogurt Lab ------RISIng STAR 3

Champeau/Engels - MEMBER PRoFILES 5

Retail Trends ------PRogRAM RECAP 6 Online Advertising ------STATS 7 Connection

Feature by Jim Klym and Jon Diessner of Kraus-Anderson Insurance Will Your Business Survive After a Property Claim?

roperty owners and managers in every part of the amended by endorsement. It ends on the earlier of (1) the country purchase and maintain insurance policies to date the property should be repaired, rebuilt, or replaced appease lenders and to protect their assets against the with reasonable speed and similar quality or (2) the date Prisk of catastrophic losses like fires and tornados. Since most when the business is resumed at a new permanent location. commercial property insurance carriers gladly offer When the business reopens, your income stream will take coverage for these types of losses, many in real estate shift time to resume to pre-loss levels. Most insurance companies their focus to obtaining the lowest possible premium. What grant 30 days of coverage for the “Extended Period of they often fail to consider is that the potential for financial Indemnity” with the option to purchase a greater timeframe loss to a commercial property such as 60, 90, 180 or 360 owner far exceeds the cost of days. rebuilding a structure. In fact, in situations where businesses Hopefully, owners and suffer a loss that forces them managers that read this to shut down operations for description will be prompted more than 30 days, industry to dust off their own policy or experts state that a quarter of call their agent to see them will never reopen. This whether or not this coverage unfortunate situation occurs is in place for their because many buyers don’t properties. Unfortunately, pay careful enough attention many, upon finding that they to a coverage known as do indeed have Business “Business Interruption Income coverage, will let Insurance” or “Business out a sigh of relief, and go Income/Loss of Rents back to business as usual. Insurance.” While the terminology may seem fairly But be careful. Carriers that include this coverage will rely on innocuous, the consequences of ignoring it can be information provided by the agent, and most make no devastating. This article will examine how the coverage distinction between those in real estate and those in works, why it is so crucial to those in real estate and what manufacturing or construction. But property owners and you need to do to ensure your assets continue to produce managers have very unique exposures that must be the income on which you rely, even after a catastrophic addressed properly in order for the coverage to have any event. value whatsoever. Business Income/ Loss of Rents Insurance is a property The first such exposure that should be considered is the time coverage that is designed to pay lost income (rents) as well required for reconstruction and the inability to move as expenses, including payroll, following a total or partial operations to a temporary location. Unlike a contractor who shutdown of operations. It is only triggered by a loss from a can conduct operations at another location relatively covered peril described in the cause of loss section of the easily, property owners and managers depend on their fixed policy and only applies during the “period of restoration.” location asset to produce income. Most businesses Typically, the “period of restoration” begins 72 hours after underestimate the amount of income necessary to meet the physical damage occurs, although this can be obligations until the property is operating normally again. By

msca-online.com 1 MSCA Connection November 2012 Will Your Business Survive? - continued 2012 Sponsors insisting that your agent provide detailed may affect it. This common tool will help and accurate annual income information you identify the gross profit and normal ACI Asphalt Contractors, Inc. to the carrier, you allow for unforeseen operating expenses, including payroll, that Aspen Waste Systems, Inc. delays such as cause and origins will help determine the necessary level of Barna, guzy & Steffen, Ltd. investigation, tear down and debris coverage as well as spark a review of Bremer Bank, n.A. removal, securing permits, upgrading to business strategies and recovery plans. A CBRE comply with current building codes, properly completed business income involvement of federal, state and local worksheet is the foundation for proper CSM Properties government, choosing a contractor, and Business Interruption valuation. As an owner Chuck & Don's Pet Food outlet the delays inherent in construction itself. or manager you might also consider Colliers International | developing a disaster plan to minimize your Minneapolis-St. Paul The basis on which the carrier determines exposure in the event of a loss. Cushman & Wakefield/northMarq the value of their obligation is also very Cutting Edge Property important. Most carriers will require a stated As a property owner or manager, you are Maintenance amount of coverage on larger risks based often required to wear a number of Doran Construction on recent financial statements and a different hats. From repairman to attorney Faegre Baker Daniels LLP business income worksheet. Unfortunately, to accountant, your responsibilities are Fendler Patterson Construction, Inc. this allows for errors and inconsistencies that many and diverse. When you purchase Fredrikson & Byron, P.A. may be problematic when filing a claim. If commercial property insurance, you are available, it is far more beneficial for the entitled to a detailed and accurate analysis gray Plant Mooty valuation to be on what is known as an of your portfolio's unique risks. not all great Clips, Inc. “actual loss sustained” basis. In this situation, policies, agents and carriers are created H.J. Development, Inc. the carrier will rely on historical financial equal, so it is crucial that you have a Inland Real Estate Corporation statements to determine the income that partner that understands commercial Jones Lang LaSalle would have been generated if the loss had property in general, offers helpful and Kraus-Anderson Companies not occurred. insightful risk management suggestions, and Larkin Hoffman Daly & Lindgren Ltd. takes the time to help you evaluate the risks often the most overlooked exposure The Lawn Ranger outdoor Services in your operations and effectively mitigate unique to property owners and managers is Leonard, Street and Deinard them through a well-developed the “Extended Period of Indemnity.” In commercial property program. M & I, a part of BMo Financial today’s real estate market the standard 30- group day extended period of indemnity, which MFRA, Inc. implies a property is either 100% leased at Mcgladrey the time of reconstruction or has thirty days Messerli & Kramer P.A. in which to do so, is simply unrealistic. Mid-America Real Estate – options to purchase a greater time frame, Minnesota, LLC up to 360 days, should be seriously Midwest Maintenance & considered in order to avoid hurried lease Mechanical, Inc. negotiations that undermine the market THIRD THURSDAYS Minneapolis/St. Paul Business value of the property. Journal Minnesota Real Estate Journal It’s also crucial, as a policy holder, that you Next Meeting : Thursday, November 15, oppidan, Inc. understand the possible gaps in coverage. 2012 Business Interruption only pays losses due to Time: 8:30 am – 9:30 am The opus group Paster Enterprises covered perils described in the property Where: Starbucks – 1470 Robert Street Prescription Landscape policy. If you have a loss from a peril that is South, West. St. Paul excluded in your policy such as flood or RLK Incorporated earthquake, Business Interruption will not Member host: Regis Corporation respond. Even if you have a flood policy Anita Johnson , Christianson & Robert Muir Company with the national Flood Insurance Program, Company Commercial Real Estate Ryan Companies US, Inc. Business Interruption will not be included. What: Casual networking hosted by TCF Bank You should also be aware of your duties in MSCA members TCI Architects/Engineers/ the event of a loss and know that it is When: Third Thursday of every month Contractor, Inc. critical that you keep accurate records in a from EITHER 8:30 –9:30 am or 4:00 –5:00 Target Corporation safe place. Insurance companies typically pm. U.S. Bank pay loss of rental income based on your Why: Create synergy in the commercial historical rental income so rent rolls are United Properties real estate industry —share ideas and uniquely important. Foresight and planning, Venture Mortgage Corporation stories and make new effective as in most business situations, will help to Weis Builders, Inc. relationships. avoid pitfalls when it comes to recovery Wells Fargo Bank, n.A. from Business Income coverage. Ask your There is no fee for this event. Food and Westwood Professional Services, Inc. agent to assist you in completing a Business beverage are not included. RSVP to Wipfli LLP-CPAs & Consultants Income Worksheet and make them aware Stacey is preferred, but not required. of any substantial changes in income that

MSCA Connection November 2012 msca-online.com 2 Rising Star by Creig Andreasen , Messerli & Kramer Featured (yo)gurt[lab] Sponsors

Chuck & Don’s Pet Food cience! nobody knows how to excite your taste buds better than you do, and Yogurt Outlet Lab gives you full reign to concoct your craved creations. With a periodic table filled At Chuck & Don’s Pet Food with yogurt flavors, stations of assorted fresh fruit, and a wall lined with tubes of outlet, we care about pets, Stoppings, the formula you create out of the 60+ favors is just as unique as this scientific people, and doing the right take on a frozen yogurt store. thing. We strive to be the best regional independent Walking into Yogurt Lab feels like entering a pet food and product laboratory. Its solid wall colors, metal chairs, supplier with a personal employees dressed in white lab coats, and touch and a hometown walls lined with chemical equations all experience. our mission is to contribute to the “controlled environment” provide the best products, suited for mixing your cup of frozen yogurt. service, and education for once you design your unique dessert our customers enabling them to enrich the lives of their experiment, bring it to the checkout where it pets. We provide an will be weighed and priced at 49 cents an environment that enhances ounce. the work experience of our team members, provides a The various equations written in chalk along meaningful shopping the walls take you right back to chemistry experience for our class which, for many customers, might customers, we make a have been just hours ago. The psychology positive difference in the behind the single 16 oz. cup size and pay by communities in which we the ounce business model is nothing new, operate, and strive for a high but it works wonders for the Yogurt Lab level of corporate citizenship. check size. With so many choices, it’s really We are passionate about pets! At Chuck & Don’s, we difficult to not fill your cup to the brim. make pets happy! Frozen yogurt isn’t exactly a new Larkin Hoffman Daly & concept —it was a 1970s new England Lindgren Ltd. innovation and morphed into a retail Larkin Hoffman Daly & concept with the advent of TCBY in 1981 Lindgren Ltd. is a full-service which spread rapidly —by 1984 they had 100 law firm solving problems stores. Yogurt Lab’s expansion plan is off to a and creating opportunities good start with its original location on for businesses and individuals Excelsior Boulevard near Whole Foods, a since 1958. new location in the IDS Crystal Court and two other locations slated for 50th & France in M & I, a part of BMO Financial Edina and at the University of Minnesota on oak Street in Stadium Village. Perhaps the true Group test of a “froyo” store is its ability to outlast a Minnesota winter (last year doesn’t count) so Full-service commercial bank only time will tell whether Yogurt Lab has the secret formula of success. with significant emphasis in commercial real estate lending. Messerli & Kramer P.A. With strategic thinking, hard work and attention to costs and timeframes, we make our clients’ business our business. Wells Fargo Bank, N.A. To be a premier, nationwide provider of financial services to middle-market real estate developers, investors and builders, to satisfy all of our customer’s financial needs, help them succeed financially, and be known as one of America’s great companies.

msca-online.com 3 MSCA Connection November 2012 MARKET WATCH

Press releases are printed based upon availability of space and Events MN Marketplace relevance to the local market. compiled by Jeremy Striffler , Cushman & Wakefield/NorthMarq nov 7 State of Retail nov 15 Third Thursdays n Downtown food truck owner, Billy Usuzukuri of Sushi Fix is headed to the suburbs with his first bricks and mortar location in Wayzata at Dec 4 STARR SM Awards/Year End the Wayzata Village Shoppes. Look for him to open the first quarter of 2013. Ceremonies/Holiday Party n Scott Ramsdell owner of Athletic Performance Inc. and his Jan 9 Trends partners are opening up a unique retail educational facility in Champlin Jan 17 Third Thursdays at South Pond Shoppes called Evolution Group Fitness . The concept will provide personal training, along with an educational facility to certify personal trainers. To view MSCA program presentations, click here . n Woof Central has recently opened at 6315 Penn Avenue in Richfield. Woof Central provides doggie daycare and boarding services in their 11,000-sf facility. n Best Buy Mobile opened in october at the Center Shops at 2012 Leadership Tamarack Village in Woodbury and at Aurora Village Center in Burnsville. OFFICERS President n , Horst Rechelbacher’s innovative Paula Mueller , northtown Mall/glimcher Properties n Intelligent Nutrients 1st Vice President certified organic health and beauty brand, is opening a store at Ronn Thomas , Cushman & Wakefield/northMarq 2nd Vice President . This is In’s first retail store, beyond company Deborah Carlson , Cushman & Wakefield/northMarq headquarters in northeast Minneapolis. Treasurer Bob Pounds , Colliers International Secretary n Sassy Knitwear , a staple vendor at the Mill City Market, Dana Andresen , Minnesota Spay neuter Assistance Program opened its first brick-and-mortar location last month at 48th & DIRECTORS Chicago. Tony Barranco , Ryan Companies US, Inc. Janet Goossens , Kraus-Anderson Companies n Woodbury Lakes announced that three new stores will be Tom Heuer , Aspen Waste Systems, Inc. opening there in the coming months: Osaka Seafood and Jen Helm , Cushman & Wakefield/northMarq Will Matzek , Kimley-Horn and Associates, Inc. Steakhouse , Crazy 8 and Knox Jewelers . Hans Rasmussen , Robert Muir Company Jennie Zafft , Cousins Properties, Inc. n The city of Hopkins will welcome Five Guys Burgers and Immediate Past President (as Director) Fries, Bruegger’s Bagels , Sprint and another Fantastic Peter Berrie , Faegre Baker Daniels Sams . The businesses are moving into a new retail center COMMITTEE CHAIRS planned for the old BP site at 525 Blake Road. Golf Cindy Larson , Engelsma Construction, Inc. Michael Gross n KLR Karate opened at Heritage Commons in Lakeville. Learning Session Cindy MacDonald , Kraus-Anderson Companies Sports Authority Plaza in Minnetonka will welcome two new Kris Brandt , Christianson & Company Real Estate Services n Legislative merchants. West Marine boating goods retailer will take over Leah Maurer , Cushman & Wakefield/northMarq Paul Berg the former 15,000-sf site of Ultimate Electronics. Also coming to Newsletter Gregory Brenny , Fafinski Mark & Johnson, P.A. the Sports Authority Plaza is Viverant , leasing 5,196 sf of the Deb Carlson , Cushman & Wakefield/northMarq former Ethan Allan space. Viverant is a new health and wellness Program Jeff Orosz , CMA concept focused on physical therapy, strength training and Retail Report coaching. Michael Broich , Target Corporation Sponsorship Shelly Muelken , Marketplace Commercial n Thom Pham’s Wondrous Azian Kitchen in downtown Wendy Madsen , Ryan Companies US, Inc. Minneapolis has shut its doors. Pham’s newest restaurant, STARR Awards Azia Derek Naill , Associated Bank Market Bar & Restaurant in south Minneapolis is set to still open Luann Johnson , Rochon Corporation later this year. STAFF Executive Director n Corner Bakery Cafe said it plans to expand into the Twin Karla Keller Torp (P) 952-888-3490 (C) 952-292-2414 (F) 952-888-0000 Cities with 18 restaurants. [email protected] Associate Director n Popeyes Louisiana Kitchen restaurants announced it is Stacey Bonine (P) 952-888-3491 (C) 952-292-2416 (F) 952-888-0000 buying 28 Minnesota and California locations of a bankrupt quick- [email protected] service eatery and converting them to Popeyes locations. Layout Design Andrea Komschlies n The Lynn on Bryant made its debut october 15 at 50th & Bryant, (C) 612-327-0140 offering breakfast and lunch the first week before expanding to dinner [email protected] service as well.

continued on page 7 MSCA Connection November 2012 msca-online.com 4 NOVEMBER INSERT FEATURE: STARR SM AWARDS

Y T R A P

Y A D I L O H

Tuesday, December 4, 2012

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R Golden Valley Country Club A 7001 Golden Valley Road ~ Golden Valley W

A

M S

R 4 p.m. Registration & Networking R

A 5 p.m. Year End Ceremonies & Awards Presentation T S

6 p.m. Holiday Party

Reserve your tickets today online!

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E Corporate tables of eight: $450 I

N Corporate tables of four: $250 O Individual tickets: $65 in advance / $75 at the door M

E R

E To register log on to www.msca-online.com

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D /(7·6&(/(%5$7( N E

R A E Y

msca-online.com MSCA Connection November 2012 Member Profiles

Brandon Champeau What is your primary career focus? Managing the development process for our retail and office projects. United Properties What is your secret talent? Beanbag toss. What is the one word that describes you? Focused. What was the first car you owned? 1991 Pontiac grand Prix. What would you rather do than go to work on Monday morning? Sleep in, although if you asked my co-workers, they’d probably say I do that already. When you were a kid, what did you want to be when you grew up? Batman. What was your very first job? Shoe salesman. Who are/were your mentors? My two bosses, Keith Ulstad and Bill Katter. What is your favorite cereal and why? Lucky Charms because of the marshmallows of course. If you were an animal, what would you be and why? A lion, to be King of the Jungle, even though they don’t actually live in the jungle. What are your favorite place(s) that you have travelled to? Brazil. How long have you been an MSCA member? Since 2004. Eileen Engels What is your primary career focus? Retail Store Distribution . Verizon Wireless What is your secret talent? not sure it is a real secret, but I love to cook. What is the one word that describes you? Enthusiastic. What was the first car you owned? 1979 Ford Mustang. What would you rather do than go to work on Monday? Sit and drink coffee on the deck at the lake. When you were a kid, what did you want to be when you grew up? nurse. What was your very first job? Sales Clerk in the Men’s Department at goldfine’s in Duluth. Who are/were your mentors? Lisa Huls, Connie Kalin and my mom. What is your favorite cereal and why? Raisin Bran, because it has just enough sweet to it. If you were an animal, what would you be and why? An owl, because I like to observe. What are your favorite place(s) that you have travelled to? Birchwood, WI? Haven’t done a lot of interesting travel but Hawaii in March for 25th wedding anniversary. How long have you been an MSCA member? Since 2007. Aggressive Strategies. Lower Taxes.

Fredrikson & Byron — Property Tax Appeals Group

Are you paying more than your fair share of property taxes? Let us take a closer look to see if we can assist you in getting a meaningful reduction.

For a preliminary analysis, contact Tom Wilhelmy or Judy Engel at 612.492.7000.

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msca-online.com 5 MSCA Connection November 2012

Program Recap by Richard Jahnke , Sunbelt Business Brokers

October 2012 The Changing Face of MN Professional Emerging Retail Trends Showcase

hat are the emerging demographic trends that forward thinking retail industry professionals can take Wadvantage of? It is no secret that across the nation, the population is aging and growing more diverse. Two presenters gave a detailed analysis of these trends that will affect our economy for years to come. Susan Brower, Minnesota State Demographer, gave the audience a look October program speakers l to r: CMA provides complete into the future of the face of Minnesota by Susan Brower , MN Dept of Administration discussing three trends. John Mehrkens , Presbyterian Homes and Services planning, design and Barry Brottlund , InSite Commercial Real Estate, Inc. (moderator) architectural services. 1) The flight to suburbia has decreased Licensed in all 50 states, under construction! The development on significantly across the nation. This trend can CMA has been the site of the former Wayzata Bay Center, be traced to the housing market collapse, specializing in retail, will contain 130,000 sf of retail, a 100-room but also reflects the desire of retiring baby restaurant, and shopping hotel, 27,000 sf of office, 65 all-age condos, boomers to live in and near the city to take center design for over 35 25 luxury apartments, and 330 senior advantage of amenities like restaurants, years! They have a wide housing and assisted living units. The retail entertainment and health care. Younger range of services that mix will be a balance of fashion, restaurants working people are waiting longer to have benefit MSCA and service tenants. The retail anchor is a families and prefer short commutes to work. developers, contractors, 17,000-sf Lunds Foods store designed to These trends point to yet greater population property managers, and cater to the customer’s daily needs. growth in the urban metro areas. owners. 2) Between 2000 and 2010, Minnesota’s The development will population of Latino, Asian and African have very pedestrian descendants has increased by 350,000. This friendly, heated My MSCA trend will continue as the younger and sidewalks and streets more diverse population under age 30 start requiring no snow MSCA Monthly Programs – removal. The buildings families. Schools are a harbinger of the Pre-Register for Full Year! future, and Susan said you can see this utilize ”green” trend in the elementary schools. technology. Many of them will have Did you know that you can register for all of the 3) Are you tired of hearing about the baby geothermal heating and monthly programs at once? This is great for boomers? Susan had a graph showing cooling with green roof many MSCA members due to the fact that you Minnesota adding 335,000 more people surfaces. Structured only have to submit one expense report/receipt reaching age 65 by 2020. These consumers parking is designed to be for all of the programs, and you don’t have to typically spend less, but they have a lot of noncompetitive for retail try and remember if you have registered for wealth and they will spend significantly guests and residents. each month. Here’s the easiest way to do this: more when they perceive value in the Leasing for the retail > Visit www.msca-online.com and log in with service aspect of their purchases. space has attracted your member information at the top right attention because of the John Mehrkins of Presbyterian Homes and of the page. high incomes in the area. Services, talked about the buying habits of > Click on the shopping cart icon which is on what he termed “The Silent generation.” This project has been five the top right of the page. This is the population that his company years in the making. It > on the right hand side of the page under serves by building retirement and assisted looks to be the ultimate event registration , click purchase now . living developments. John said this segment design in modern urban > You can continue to add all of the events of the population will buy on price if it is a planning. This mixed use you would like to attend to your cart and “need” product and buy on value if the development will be do one final checkout with one total product is a “want.” He also said they are watched closely by the payment. very interested in controlling the purchase industry. If the project is Remember, all of your online events you are options. “I decide which options I will pay successful, we are surely registered for show in your activity in your for and which ones I won’t.” going to see other member profile. Please call Stacey at developers duplicate it in After about five years of proposals and (952) 888-3491 if you need assistance. other communities. planning, the Promenade of Wayzata is

MSCA Connection November 2012 msca-online.com 6 MN Marketplace - continued from page 4 n FreeStyle Yogurt , a local chain that serves all-natural frozen yogurt, is opening next March in the strip at 53rd & Lyndale. New Members n , a yoga studio tailored for pregnant women and young families, n Blooma Rafael Bassi moved into part of the old Hollywood Video space at 5315 Lyndale Avenue South. CEI Engineering Associates, Inc. n After three years in Maple grove, bluebird boutique has decided not to renew its lease at Shops at . Phil Foster CMA n The Rack Bar & Grill is coming to Burnsville, taking over the former Pam Brueck Timber Lodge Steakhouse. Minneapolis/St. Paul Business Journal n national craft beer bar chain World of Beer is coming to downtown Jeff Mitchell Minneapolis. According to World of Beer’s Adam Chwala, the Tampa, Florida- Hoyt Properties, Inc. based business will open its Minneapolis location sometime in spring of 2013. Robin Weeks-Wynne n Revolution Cycle + Fitness , 1828 Marshall Street nE, celebrated its general growth grand opening on September 29. The fitness studio opened in May after Properties, Inc. founder Dawn Doll’s previous fitness business, 501, outgrew its space inside of Paul Bilotta 501 Fit on Washington Avenue. Stantec Consulting Services n Arhaus Furniture unveiled its first Minnesota store at the galleria Brett Kramer M & I Bank recently. The Edina location is a sprawling 15,000 sf. Patty Tembreull n The Shops at West End in St. Louis Park will welcome the Brush Studio Bellcomb this winter. Brush Studio offers painting courses where participants spend two to three hours following the instructions of an artist to recreate a famous or well-known painting —with wine or beer to get the creative juices flowing. n Hector Ruiz and Erin Ungerman took over El Meson in 2003 but closed the well-regarded Spanish restaurant recently. Their other restaurant, Cafe Ena , continues to operate. n The Nightingale , a new restaurant serving small-plates, opened at 2551 Lyndale Avenue. The nightingale is the brain child of husband-wife team of Jasha Johnston and Carrie McCabe-Johnston. n Cowboy Slims in Uptown closed its doors at 1320 Lake Street to make way for a new six-story apartment/retail/restaurant building. n An “upscale Irish pub” is looking to open in the former Viva Brazil space at 913 West Lake Street. The pub would be called Morrissey’s Irish Pub .

Small Talk Stats: ONLINE ADVERTISING

msca-online.com 7 MSCA Connection November 2012