A decade of data show the diverging fortunes of the core Twin Cities and suburbs.
Minneapolis and St. Paul are facing a fiscal accounting problem that is quickly becoming an acute crisis.
Cities raise the money they need to function by taxing property within their borders. When the commercial and industrial share of that tax base grows, everyone benefits: Government services are funded without placing an ever-heavier burden on homeowners, and the conditions that attract further investment, stable taxes, well-maintained infrastructure, and high functioning schools remain intact. When that commercial base shrinks, the burden shifts, homeowners pay more, and the city becomes a less attractive place to live, invest, or stay.
That arithmetic is now playing out very differently across the Twin Cities metropolitan area, and the divergence carries lessons that no local official, homeowner, or business owner can afford to ignore.
Figure 1 presents combined commercial and industrial EMV for all six cities across the decade. Minneapolis carries the largest absolute commercial and industrial base, peaking at $13.2 billion in 2023 before its sharp decline; St. Paul follows, its base substantially smaller in absolute terms despite a sizable downtown commercial core; Bloomington’s combined base, anchored by the Mall of America, extensive hospitality infrastructure, and a major industrial corridor, places it third and well above the smaller suburban cities. Roseville and Edina are broadly comparable in scale, while Woodbury, despite its rapid growth, remains the smallest commercial base in the group in absolute terms.
The pandemic penalty
The pandemic left visible marks on every city in this analysis. Commercial values dipped or flattened in 2020 and 2021 across the board, as office occupancy collapsed, retail traffic dried up, and hotel revenues fell sharply. The pandemic hurt all cities. That is true. But it is only half the story, and arguably the less important half.
What the comparative data reveal is that cities did not come out of the pandemic the same way. Some recovered and came out stronger. Others did not recover at all. The pandemic may explain a dip; it does not explain a decade-long divergence that was already underway before 2020 and that accelerated sharply in the years after.
Woodbury, Bloomington, Edina, and Roseville faced the same regional economy, the same interest rate environment, and the same remote work disruptions, yet followed fundamentally different paths. A shared external shock does not produce shared outcomes when the underlying policy environments, investment climates, and land use conditions differ. The pandemic is a partial explanation that, leaned on too heavily, becomes an excuse for avoiding harder questions.
Figure 2 reveals relative trajectories with clarity. Woodbury stands apart from every other city in the comparison, finishing the decade more than 120% above where it started, a reflection of sustained commercial expansion driven by substantial developable land, a growing population, and a planning culture that has actively encouraged employment generating uses. Bloomington and St. Paul both show meaningful gains over the full decade, though St. Paul’s post-2023 slide has begun to erode its earlier progress.
Edina and Roseville cluster in the middle, both inner-ring suburbs showing moderate appreciation through the mid-period with mild softening in recent years. Neither is in crisis, but neither is growing its commercial base in a way that provides much fiscal headroom.
And then there is Minneapolis, the unmistakable outlier.
Minneapolis’ combined commercial and industrial EMV, which peaked at $13.2 billion in 2023, has since fallen to an estimated $9.6 billion in 2026, its lowest level since 2019 and, in inflation-adjusted terms, the lowest point in the entire 10-year period. The commercial-only figure stands at $7.8 billion, down from $8.6 billion the prior year, confirming the depth of the decline by any measure.
In indexed terms, Minneapolis is the only city in this comparison to finish the decade below its own 2016 baseline. City assessor Rebecca Malmquist reported that downtown commercial values fell 9.5% in a single year, with urban-core office buildings losing roughly 22% of their assessed value in 2025 alone. The commercial sector’s share of the city’s total net tax capacity has dropped from 34.7% in 2016 to just 24.9% in 2026, a loss of nearly 10 percentage points in a single decade.
St. Paul’s trajectory is troubling in a different register. Its commercial base has now fallen below its 2016 starting point, but three consecutive years of decline, from a peak of $3.6 billion in 2023 to a preliminary $2.1 billion in 2026, signal that the city’s fiscal pressures are structural, not simply a hangover from a once-in-a-century public health crisis.
First, the timing is wrong for a pandemic explanation: St. Paul’s commercial base peaked in 2023, three full years after Covid hit, and has fallen sharply since—exactly the inverse of a recovery arc. Second, peer cities faced the same regional economy, the same interest rate environment, and the same remote work disruptions, yet Woodbury finished the decade more than 120% above its 2016 baseline while St. Paul slides toward its starting point. Third, three consecutive years of decline from a peak is a trend, not a lag—a pandemic hangover produces a temporary dip and rebound, not a sustained contraction with no visible floor.
Disruption or divergence?
This analysis does not adjudicate the causes of Minneapolis’s commercial decline. Reasonable people disagree about the relative weight of remote work, crime, rent control spillovers, tax increment financing overuse, and the structural hollowing out of downtowns that has affected cities across the country. What the data make clear is that the consequences are already here: homeowners asked to carry a larger share of the levy, schools asked to do more with less local revenue, and business tax obligations rising as the base beneath them contracts.
The cities faring better in this comparison did not stumble into their trajectories by accident. Woodbury’s commercial growth reflects decades of disciplined land use planning, infrastructure investment, and a genuine commitment to welcoming employment-generating development. Bloomington has leveraged its geography and connectivity to build a diversified commercial base that absorbed the pandemic’s shocks without structural damage. These achievements demonstrate that the arithmetic of the tax base is not beyond the influence of local decision making.
For Minneapolis and St. Paul, the urgency is real. A shrinking commercial tax base does not stabilize on its own. Rising residential tax burdens, constrained services, weakened schools, and reduced affordability are precisely the conditions that make further commercial investment less likely. The comparative record of the past decade makes one thing unmistakably clear: The pandemic explains a disruption. It does not explain a divergence. And it is the divergence that demands attention.
Great article and analysis! It’s not just the downtown commercial area of Minneapolis — it’s other neighborhoods as well. The industrial base is also a major factor. Look at how activists proudly chased GAF out of North Minneapolis! There’s also the loss of Graco and others. What we’re seeing in Minneapolis is a clear policy failure driven by elected activists who refuse to abandon their ideology even when the abysmal results are staring them in the face. Issues with public safety, parking, employment rules (such as the minimum wage—yes, it’s a factor), planning and zoning, and unelected bodies like CLIC and the Planning Commission, which are stacked with activists calling the shots. Wake up, Minneapolis! Our generation was handed something very good. It’s shameful that we’re running it into the ground.
If I am understanding the central concern of David Schultz’s important article, the economic changes he describes were predictable given growing choices/opportunities created by suburban market forces contrasting with substantial losses in the tax bases of Minneapolis and Saint Paul. In part, this occurred because city government often was ineffective and/or distracted by issues unrelated to local economic issues. In 1967, the Metropolitan Council was created to provide regional planning, policies, and practices to somewhat ameliorate quality of life disparities based on geography and property values. I am wondering what the Met Council is doing to help address the issues identified in David’s article.
Maybe someone has done this research, but I want to know how many companies have left Minneapolis, how much commercial tax revenue was lost company by company, why the companies left the city, and what the employees think about the move.
We hear narratives that companies leave Minneapolis because of political dysfunction, high taxes, crime, and lack of parking. But it could also be as simple as the obverse: it’s cheaper in the suburbs and you get way more space, in addition to a generally nicer and more relaxed environment.
That’s the same reason why families leave Minneapolis to move to Maple Grove. I know plenty of people who love the Minneapolis, but just find it easier to raise a family with a bigger house and a yard.
I also want to know what the employees think. Do they care if they’re in the suburbs or in downtown Minneapolis? Are their commutes improved? What do they miss about the city?
Without concrete data, it’s hard to know what brought companies to the city, and what could bring them back.
The problem in Mpls is that the 5-6-7 on the City Council, the Wonsley/DSA aligned voting block, ( the Chugleys) believe this below. ***
To the extent that the system, the way Mpls and other cities collect monies to pay for things, may be in crisis, or even near collapse, this group on the Council is probably ok with THAT because they can now say…”SEE capitalism does not work..”
***
“The Democratic Socialists of America (DSA) views capitalism as an exploitative, inherently unequal system designed by an owning class to maximize profit at the expense of working people. They advocate for replacing capitalism with democratic socialism, where wealth and key economic drivers are publicly owned and democratically controlled.
Democratic Socialists of America (DSA) -Democratic Socialists of America (DSA) –
Key aspects of the DSA’s stance on capitalism include:
Fundamental Critique: They view capitalism as a system of “alienated labor” that creates gross inequalities of wealth and power.
Goal of Replacement: The long-term goal is to move beyond capitalist economic structures, not merely to reform them.
Systemic Issues: Members see capitalism as inseparable from other forms of oppression, including racism, misogyny, and ableism…”