Demos Begin at Bloomington’s Iconic Southtown Shopping Center

Plans continue for the next chapter of a family owned company’s legacy property located in Bloomington, Minnesota. Kraus-Anderson Realty & Development has begun to demolish the former Toys R Us and Herberger’s buildings at Southtown Shopping Center. While the company is not able to share further details about potential tenants, removal of the outdated buildings marks a step toward re-envisioning Southtown for contemporary uses — yet another chapter in a flagship property that has reinvented itself time and time again for 63 years.

“When Kraus-Anderson built Southtown in 1960, it was adjacent to cow pastures,” said Pete Diessner, president of Kraus-Anderson Realty and Development and COO of Kraus-Anderson Companies. ”But KA, and like many others, could see the potential of this location.”

Located at the corner of I-494 and Penn Avenue South, Southtown opened in November 1960 with tenants that featured a two-story, 150,000-square-foot Montgomery Wards, the largest in the retailer’s chain of 550 nationwide stores; and 44 other variety shops and stores, including Musicland, Red Owl, Walgreens and Texaco. Abundant with national and regional retailers, along with a host of professional services and mom-and-pop shops, Southtown instantly became a one-stop shop for the burgeoning suburb.

The center has undergone numerous additions and renovations ever since, anticipating and accommodating growth and change.

KA will be demolishing the large vacant space on the northeast side of the center, often referred to as the old Herberger’s (originally Montgomery Wards) and Toys R Us space. The barriers and fencing have been installed around the perimeter of the demolition area, and the structural demolition of the building has begun. The demolition phase will take approximately 12 weeks and is expected to be completed at the end of March 2024.

“The demolition team will be working as quickly and safely as possible so they don’t disturb the rest of the shopping center,” said Jeff Hildahl, KA Realty & Development’s executive vice president. “The building will be demolished one piece at a time, using excavators and other mechanical equipment. There won’t be any implosions. There won’t be any fireworks. The former Herberger’s building is going, but the bulk of the shopping center will remain, and all those stores will be open during the entire demolition. The building served the community well for 63 years, but the time has come to make room for the next greatest thing.”