The ground floor space of the building on the southeast corner of Lake Street and Holmes Avenue is being renovated. The space most recently housed a specialty store from Ragstock and prior to that Jon English Salon. The salon consolidated into the upstairs space they already had rented for a long time.
The building, along with the building immediately east that is home to American Apparel, is owned by Mike Finn, who owns Ragstock. Finn did not have anything to share about the corner space yet.
So is there a tenant committed or is he preparing the space for lease? Watching the build out may be informative.
Update 1/22/12: Several comments below mention contemporary home furnishings retailer, Jonathan Adler, as the likely tenant. This insight also seems to mesh with this Ali Shops post, which mentions that two local retail authorities said that Jonathan Adler is coming to Uptown. The Minneapolis St. Paul Business Journal has an article about Jonathan Adler looking at Lake Street.