Two developers are pursuing the historic Pillsbury A Mill in Minneapolis for apartments.
The Pillsbury A Mill complex, sitting in foreclosure after redevelopment plans fizzled, is getting another shot at life.
Two local developers are striking deals with the bank that now owns the landmark spot, that would bring the long-vacant stretch of riverfront property to life with nearly 600 apartments, many with views of downtown Minneapolis and the tumbling waters of St. Anthony Falls.
The concrete grain elevators may or may not make the cut.
The high-profile spot, crowned with the neon "Pillsbury's Best Flour" sign, was going to be redeveloped into East Bank Mills -- a $500 million project with about 1,000 condominiums and 100,000 square feet of commercial space. Minneapolis developer Schafer Richardson Inc. labored on the project for about seven years.
But with its large scale in a condo market nearing the saturation point, East Bank Mills never got off the ground before financing dried up as the recession took hold. In November, Bismarck, N.D.-based BNC National Bank bought back the 8-acre site in a sheriff's sale for $12 million.
On Wednesday, Bloomington-based Doran Cos. confirmed it has a purchase agreement with BNC for about 3 of the site's 8 acres. Plymouth-based Dominium also confirmed that it expects to sign an agreement this week for most of the remaining land with the historic structures. The developers stressed that their plans are separate.
"With the spring has come some new optimism in the development world," said Dominium executive Mark Moorhouse. "The financing is still difficult, but it's easier this spring than last spring."
BNC National Bank did not return calls seeking comment.
Doran plans to erect two seven-story buildings there with 375 apartments and a working name of Mill & Main, said Kelly Doran, head of Doran Cos. His plans don't include commercial space on the property, which faces the river along Main Street SE. near 6th Avenue SE., but doesn't include any of the former flour mill's historic structures.
Doran wouldn't discuss the sale's timing but said he hopes to break ground later this year. He described Mill & Main as "very upscale" with extensive amenities including a courtyard with fire pits and a pool. The first two floors will be two-level townhouses.
Northeast Minneapolis, with all its new developments, "is becoming a place where people really want to live," Doran said.
Dominium's purchase covers the remaining acres where the flour mill's historic structures sit. They include the fortress-like A Mill building, which is designated a National Historic Landmark, and the Red Tile Elevator, which has multiple grain bins of red clay tile and is listed on the National Register as part of the St. Anthony Falls Historic District.
The Pillsbury flour mill was once the largest in the world, although major milling operations there stopped in 1954, according to General Mills, which now owns the Pillsbury brand.
Dominium is sketching out a $50 million project that would convert most of the site's structures into about 200 apartments.
It hopes to close the sale by early next year, Moorhouse said. Construction would take about a year. Dominium's other projects include building affordable apartments at the old Schmidt Brewery in St. Paul.
The plans for nearly 600 new apartments come as the Twin Cities apartment market is making a resurgence. Apartment vacancies in the Twin Cities fell to a low 3.8 percent by the end of last year, according to GVA Marquette Advisors, and there's a big demand for inner-city rentals.
Mary Bujold, president of Maxfield Research Inc., a Minneapolis company that tracks housing, said she thinks there's enough demand for the units, as long as they don't all come on the market at once and they aren't all at one price point.
"It just takes a long time to lease up that many units," Bujold said.
Melissa Bean, executive director of the Marcy Holmes Neighborhood Association, said the neighborhood would like to see the empty site redeveloped.
"We want something of really high quality and not something that's slapped up because there's a fire sale," said Bean, who wasn't familiar with specifics of the new plans. "It's just such a missed opportunity. It could be so beautiful."
Steve Minn, a principal with Minneapolis-based Lupe Development Partners, which has many housing projects in the neighborhood, said he's concerned that the site is going to be "piecemealed" and that it deserves a major planning effort.
Minn said he cautioned city officials years ago that Schafer Richardson's original project was too big and that a lender would wind end up selling off the land in pieces.
"I hate it when I'm right," Minn said.
If the sales proceed, the developers will have to go back through the city planning process. Doran's slice doesn't line up with existing tax parcels, and so will require particular approvals for that.
Doran said he doesn't think the site is being piecemealed: "Given the site, that's been lying fallow now for decades, I think it would be nice to have something happen there."
Jennifer Bjorhus • 612-673-4683