Xcel Energy will expand HQ in a nine-story office building by Opus.
Plans for an expanded Xcel Energy Inc. headquarters campus in downtown Minneapolis may help a long-standing effort to revitalize a blighted expanse of north Nicollet Mall that stretches to the Mississippi River.
Minnetonka-based Opus Development Corp. released plans Tuesday to build a nine-story office building on the southeast corner of Nicollet Mall and 4th Street. Office space in the new building would be leased to Xcel Energy for roughly half of its 1,500 employees downtown, with the remaining workforce located in the energy company's headquarters across the street.
"We're really committed to being in Minneapolis and our success is always tied to the community's success," said Judy Poferl, president and CEO of Xcel's Northern States Power-Minnesota division. "This brings together a legitimate business need and a proposal that furthers redevelopment in the city."
Terms of the Xcel expansion deal weren't disclosed, but Dave Menke, senior vice president and general manager of Opus Development, said the company has a purchase agreement to buy the parcel. The land in play is currently owned by Baker Investments and has an estimated market value of $4.75 million, according to Hennepin County property records.
Now home to a 40-year-old parking garage, the proposed office building isn't in the same league architecturally as the towering skyscrapers that line the city's retail spine, several of which sprouted in the early 2000s, before the economic downturn.
The last office tower of note built downtown was the Ameriprise Client Service Center in 2002.
Energy for north end of mall
But, if approved, the Xcel expansion may serve as another cog in the commercial development continuum that has already begun in the Gateway District, which connects the city's core to the Mississippi River. That effort is one of several themes outlined by the Downtown Council's 2025 Plan, which serves as a development blueprint for the city.
Last year, Opus unveiled plans for a $100 million, 33-story luxury apartment complex at Nicollet Mall and 5th Street, a patch that is now a surface parking lot. Minneapolis developer Ryan Companies U.S. Inc. is building a $70 million upscale apartment complex at Hennepin Avenue and 2nd Street that will be anchored by a Whole Foods grocery store. And the Cesar Pelli-designed Minneapolis Central Library opened in 2006 at 300 Nicollet Mall.
Menke said the Xcel expansion will be instrumental in the "continuing vitality of downtown Minneapolis and the redevelopment of the north end of the Nicollet Mall."
The various commercial development projects in the works "bodes well for that section of downtown," he said.
The ambitious 2025 Plan, released late last year by the Downtown Council, calls for a Gateway park that stretches from the light-rail station on 5th Street at Nicollet Mall to the river, with a large gathering area just north of the library.
Now pocked with a series of surface parking lots and no real connective green space, the land has failed to fully recover from the "slum-clearing" frenzy of the 1960s, according to the plan.
"Investment on Nicollet Mall is a key tenet of the 2025 Plan and essential to the future of downtown Minneapolis," said Elliot Jaffee, U.S. Bank's Twin Cities market president and chairman of the Downtown Council.
He said in an e-mail statement that the Xcel expansion is a "commitment that clearly advances the quality of life for those that live or work in downtown."
More efficient space
The project came about as Xcel began assessing its space needs for the future, Poferl said. About 750 employees now work in leased space in Marquette Plaza. "It's more efficient to get all of our employees closer together," she said.
Poferl said Xcel is unsure at this point whether the new 212,000-square-foot building would be linked by skyway to the headquarters at 414 Nicollet Mall.
Construction is slated to begin in 2014, pending needed approvals, with occupancy expected in 2016.
Janet Moore • 612-673-7752