By Caroline Cummings

MINNEAPOLIS (WCCO) – Target announced on Thursday that the company is downsizing its Minneapolis office space by moving out of City Center, a move that decreases its downtown footprint by one-third.

In an email to corporate employees, Target executives said its post-pandemic “Flex for Your Day” policy—a hybrid model that will allow both remote and on-site work—requires less office space, driving the decision to stop its lease of nearly one million square feet at City Center. The

The 3,500 employees who worked at that location will be relocated to another Minneapolis location or Brooklyn Park. There are no lay-offs due to the move.

Target’s announcement is poised to have impact far greater than just shedding office space. Businesses located in the heart of Minneapolis rely on foot traffic of people working downtown.

“That’s definitely going to have an impact on us,” said Emanuel Sas, owner of Come Pho Soup and La Belle Catering, a cozy space on the Nicollet Mall. “I think that hybrid model is going to impact businesses like us that depend majorly on the businesses working downtown.”

Steve Cramer, President and CEO of the Minneapolis Downtown Council, said Target’s move to downsize could mean the beginning of a new normal for office culture, which has changed dramatically since the pandemic upended how Americans live and work—reshaping downtown as a result.

Target is the largest employer in Minneapolis with 8,500 corporate workers.

“There is a period of adjustment here —there’s no question—and this announcement from Target is probably the clearest reflection of that reality we’ll be experiencing, as will downtowns all across the country,” Cramer said. “Once we enter that new economic baseline, we’ll have a chance to build back from there.”

The Minneapolis Downtown Council has a goal of reaching 70,000 downtown residents and expand office space and hotel capacity by 2025.

Late last month, the company said they would delay on-site return for its 12,000 HQ employees in downtown Minneapolis and Brooklyn Park. Originally scheduled to return in June, the decision was pushed back to the fall of 2021. In all, Target operates in more than three million square feet of office space throughout the Twin Cities.

RELATED: Target To Give $500 Bonuses To Frontline Team Members

Target’s sales have exploded during the pandemic. By the end of the holiday quarter, the company’s annual sales had grown more than the past 11 years combined. Online sales surged by $10 billion as Target championed same-day services and curbside pick-up.

Caroline Cummings