The upscale downtown Minneapolis hotel was in foreclosure. Terms weren't disclosed.
Ameriprise Financial Inc. is buying the luxury Hotel Ivy and restaurant in a deal that could bring some financial stability to the downtown Minneapolis hotel after years of lawsuits and financial strains.
Ameriprise expects to close the sale in late September or early October with Dougherty Funding, which foreclosed on the property earlier this year. Terms were not disclosed.
Ameriprise is a $10 billion financial planning services company whose high-rise headquarters and client services center are within walking distance from the hotel at 201 S. 11th St.
Ameriprise spokesman Paul Johnson said it was a "unique opportunity to purchase the property at a compelling price." With employees and financial advisors traveling to the home office from across the country and world, owning the 136-room Hotel Ivy offers a chance to reduce travel costs, Johnson said.
"We received other offers from traditional players in the hospitality industry, but the Ameriprise offer was the most attractive," said Jim Mayer of Dougherty & Co.
This isn't Ameriprise's first venture into the hotel world. It also owns the Oak Ridge Hotel and Conference Center, which has 147 hotel rooms and 35 meeting rooms on a 130-acre site in Chaska. Ameriprise uses it as a training and meeting facility and rents it out to others.
The Hotel Ivy was part of a $95 million development that also included condominiums and an upscale spa. The condos and spa are not part of the Ameriprise deal.
The 18-story boutique hotel, which includes the historic Ivy Tower, opened behind schedule in March 2008 just as the housing market was beginning to collapse and six months before the global financial crisis hit.
Hotel Ivy was put into receivership 18 months after opening and has been operating under the management company, Sage Hospitality, since then.
Separately, the developers feuded with the general contractor, Bor-Son Construction, and terminated the contract. An arbitration panel ultimately ordered the developers to pay $7.1 million to Bloomington-based Bor-Son and five other subcontractors for unpaid costs and fees.
Dougherty Funding, the original lender on the project, took title on the hotel this spring and waited through a sheriff's sale in June.
The hotel, which operates as a Starwood Luxury Collection property, "is performing well against other competitors downtown," Mayer said.
Ameriprise said it plans to keep the Starwood affiliation.
Jackie Crosby • 612-673-7335