The tallest office building in Dakota County is about to get a major makeover.
A Twin Cities developer plans to convert the 10-story Waterview Office Tower in Eagan into 112 rental apartments called City Vue Commons.
The conversion by Interstate Partners received preliminary approval this week and is part of a much larger mixed-use development that will have a second phase on adjacent parcels that will include a new building with an additional 90 apartments and 30,000 to 40,000 square feet of retail space along Yankee Doodle Road near Town Centre Drive.
Such transformations are rare because most commercial buildings don't have the footprint, infrastructure and window configuration that's suitable for housing. In 2006, St. Paul developer Jerry Trooien converted an office building in Minnetonka into Cloud 9 Sky Flats, an upscale condominium building.
Lonnie Provencher of Interstate Partners said the Waterview Office Tower is perfect for such a transformation and will be very appealing to renters.
"This happens to be one of the few office buildings that will lend itself very effectively to residential conversion," Provencher said. "And the views of downtown Minneapolis and St. Paul are amazing."
The sleek 10-story tower was designed by Twin Cities-based KKE Architects with sweeping bands of expansive windows and gray travertine cladding. Built in 1985, the building was most recently home to Blue Cross and Blue Shield of Minnesota, which paid $8.98 million for the property in 1992. Nebraska-based Open Space LLC bought the building in 2012 for $3.75 million. Provencher said that the building is under contract, but didn't reveal terms. He hopes the deal will close and construction can begin by this summer.
Eagan has had little new rental housing construction over the past decade, but is in the midst of a retail boom that's creating spinoff demand for new apartments and houses.
Lisa Moe, president and CEO of Stuart Management, which owns a 200-unit apartment building nearby, said the area has had little development over the past couple of years.
"And this market has been pretty solid," she said.
The site is near several burgeoning developments, including a redevelopment district called Cedar Grove that will include a hotel, a Paragon outlet mall and several hundred apartments. There's also a proposal to build a mixed-use project called the The Flats, which will have retail on the first floor and 190 apartments above. "Development begets development," said Tom Garrison, Eagan's communication director.
The City Vue Commons project received a comprehensive guide plan amendment approval from planning commission this week and is on the March 4 City Council agenda for further review.