business

The reinvention of Galtier Plaza appears to be taking another step forward with the news that Cray Inc. will likely move its headquarters to the downtown complex.

No lease deals have been signed yet, but last week the St. Paul City Council, acting as the Housing and Redevelopment Authority board, approved a $400,000 loan that Cray would use to move its offices from Mendota Heights to Galtier Plaza. The supercomputer company, which has about 230 employees, would take about 48,000 square feet at the 220,000-square-foot office and retail complex.

Cray's move would boost the building's occupancy rate to 90 percent, according to Mike Marinovich, a senior vice president at the Twin Cities office of CB Richard Ellis, which has been handling leasing at Galtier for about a year. That's significantly higher than the average occupancy rate of about 72 percent for office space in downtown St. Paul and the 82 percent average rate for the Twin Cities area, according to figures compiled by the Twin Cities office of Collier Turley Martin Tucker.

It's also considerably better than the 62 percent rate Galtier had about a year ago before another large tenant, Nacel International School, moved in. The school, which changed its name to St. Paul Preparatory School, relocated last August from facilities on the Hamline University campus.

The school is among the largest tenants at Galtier. Others include the Springsted law firm and several government agencies.

Struggle over the years

Created as a mixed-use center and financed in part with subsidies from the city and the St. Paul Port Authority, Galtier struggled from the outset. Before it even opened in the 1980s it was taken over from the original developers by Chemical Bank.

The office and retail complex, which sits between two residential towers, has struggled over the years to attract and retain tenants. The non-residential portion of the property was only about half-full when Naples-based Wasmer, Schroeder & Co. acquired it in 1999.

Wasmer converted most of the retail space to office space and gradually built up occupancy. National Equity Advisors Inc. of Los Angeles (NEA) acquired it and the complex's parking ramp in 2006.

Marinovich attributed Galtier's failure to take off as a retail center to a general lack of success in downtown retailing in the Twin Cites. "Both Town Square and the World Trade Center in St. Paul wound up turning their retail space into office space," he said. The same is true in downtown Minneapolis, where the Conservatory failed and was torn down and most of City Center and parts of Gaviidae Common have been converted from retail to office use.

Meanwhile, Marinovich said Galtier's converted retail space offers some unique digs for office tenants, with high ceilings and large windows overlooking Mears Park. Some multi-level office space is available, he said.

Susan Feyder • 612-673-1723