Snags slow Whole Foods deal

The developers planning to put a Whole Foods Market in downtown Minneapolis have pushed back the construction timetable as they continue to secure financing for the latest version of the project.

Milliken Development, which said several months ago that it expected to start work in April, now hopes construction can begin late this year, according to Don Milliken, president of the Seattle-based developer.

Arranging financing is taking longer than expected because of revisions in the project planned for the corner of Hennepin and Washington Avenues at the site of the former Downtown Jaguar, Milliken said.

Originally planned as a condominium and retail complex, the project went to an all-retail project last year when the condo market soured. About six months ago, the plans were revised again, with about 247 apartments added to the mix. Milliken said minor design changes still are being made.

"It can get complicated [to secure financing] when the elements of a mixed-use project change," Milliken said. "Lenders tend to focus on specific product types."

Milliken said that tighter credit markets also have prolonged the process of nailing down financing. "The whole process has become a lot more cumbersome in the last several months," he said.

Milliken has discussed the revised plans with city planners, but final review by the planning commission has been postponed several times while design details and financing are being worked out. The delays have sparked speculation that the project might be canceled or that Whole Foods will back out.

Milliken insists that's not true. "Whole Foods signed a lease in 2005, and it's eager to open a store in the development," he said.

Kate Klotz, a spokeswoman for the Austin, Texas-based grocer, confirmed last week that Whole Foods still plans to be a part of the project.

Milliken's most recent plans call for seven floors of apartments atop a 55,000-square-foot Whole Foods on the ground level. The store is somewhat smaller than the original plans, because Whole Foods recently decided to downsize stores nationwide.

In addition to the grocery store, 28,000 square feet of mostly service-oriented retail space will be built, Milliken said.

Sale in Wayzata

Wayzata-based Steiner Development recently completed the sale of the 121 Main Street Exchange Building in downtown Wayzata to White Cap Real Estate, a Wisconsin real estate investment firm. The price was not disclosed.

Steiner will continue to manage the 20,161-square-foot property built in 1990. The building is fully leased to two tenants -- the law firm Melchert Hubert Sjodin and Ridgeview Medical Center.

Susan Feyder • 612-673-1723