Like the suburbs, Minneapolis and St. Paul are experiencing strong housing development, and with the trend of people moving back to the cities, national retailers are eager to locate in healthy urban markets. "Big-box retailers…are thinking 'outside the big box' and are willing to compromise their prototypes in an effort to locate near untapped urban customers," says Tricia Pitchford, senior associate with United Properties Retail Brokerage.

Menards has predominantly stuck to the suburbs and rural areas for its nearly 200 stores, and the two-story design also differs from its typical one-story format. The Wisconsin-based home and building supply chain recently razed two buildings on the site at University and Prior avenues-—a store for Knox Lumber, a former competitor, and the Twin Motor Inn.

Payless Cashways, the financially struggling Kansas City-based home improvement store chain, closed down its Knox Lumber store several years ago. Late in 2002, Menards bought the Knox site as well as the adjacent Twin Motor Inn, which have since been demolished. The new store is expected to be ready to open later this year.