One suburban office park that was cool, then uncool, is slated to be cool again — at a cost of $500 million.
Hillcrest Development has started to transform Pentagon Park, an outdated, sprawling center at a key highway junction in Edina, into a complex unlike any in the Twin Cities metro area — one with distinctive features for the generation of young adults who, with the retirement of the baby boomers, will soon dominate the work world.
“Nobody has built anything in the southwest metro that addresses what people want today. That is our mission,” said Scott Tankenoff, managing partner at Minneapolis-based Hillcrest. “This is not your father’s or mother’s office park.”
Suburban office parks that surged in popularity in the 1960s and 1970s are now scoffed at by young adults. But Hillcrest’s vision for them at the Edina site is to blur the metaphorical line between work and play by blurring the physical line between the office complex and an adjacent park that will be formed from what was the Fred Richards Golf Course.
The developer, along with its brokers at Cushman & Wakefield/NorthMarq, will begin an aggressive campaign Monday to secure tenants for the 42-acre site, though without a single rendering or any specific site plans.
Instead, the firm threw out conventional wisdom in favor of a nonlinear approach to development. Hillcrest believes that to design something meaningful and innovative takes time, something developers lack at the breakneck pace that the industry now faces. So, the company rearranged the clock by getting the city of Edina on board early.
Hillcrest executives are tailoring the project to match the values of the swelling base of workers in their 20s and 30s, including sustainability, a seamless blending of work and life, as well as alternative transportation.
The firm looked at such cities as Vancouver and Santa Clara, Calif., for newer ideas, Tankenoff said. “There aren’t buildings in the Twin Cities that have taken the best of design today. They are renovating, retrofitting and tweaking as they go,” he said.
The overhaul is one of several major projects being talked about in the Twin Cities. Ideas are being floated for the former Ford plant site in St. Paul and north Prospect Park in Minneapolis.
The last major redevelopment to come to fruition was the 18-acre West End in St. Louis Park six years ago. While it focused on retail and entertainment, Hillcrest is focusing the Edina project on office users.
The Edina complex will be renamed the Link, a name chosen because of the site’s proximity to Interstate 494, Hwy. 100 and the Nine Mile Creek Regional Trail, which is under construction and will add 15 miles of bike trails that connecting three southwest suburbs to the region’s bike ecosystem.
“It’s the convergence of everything — roads, bike trails, cities, water,” said Bob Revoir, one of three brokers from Cushman pitching the project.
Tankenoff says the firm wants to reflect the ethos of New Urbanization, which de-emphasizes reliance on cars, while grappling with the recognition that “Edina is not a transit city.”
With the future bike path planned along the property’s north edge, Hillcrest expects a large bike repair shop and station will occupy a prominent spot in the complex.
The developer, buying the Pentagon Park site in pieces between 2010 and 2014, saw the possibilities of the adjacent Fred Richards site. “Basically nobody had cared for it and it was a sinking ship,” Tankenoff said. “Without redevelopment, it would continue to fester.”
Last year, Hillcrest demolished the most visible buildings facing Hwy. 100 and renovated five others in order to retain existing tenants, giving itself some financial breathing room while it plans a more dramatic redevelopment.
To overhaul such an expansive swath of inner-tier suburban land — a process expected to occur in multiple phases over many years — the developer decided to navigate potential barriers with the city before plans got too far.
In March 2014, Hillcrest received the Edina City Council’s approval on its planned unit development, which outlines height restrictions from two- to 12-stories and types of uses, like hotel, office, retail and medical. They did this without a single architectural drawing or potential tenant list. “It was a major leap of faith on their part to not know what it’ll even look like,” Tankenoff said. “They provided us a lot of certainty in a field that doesn’t offer a lot of that.”
The master vision includes 1.4 million square feet of Class A office or medical space, 60,000 square feet of select retail (no big box stores or drive-through windows), structured parking and green space integrated with the adjacent park. The city wants a residential component, but that remains uncertain.
“We’ve been through a long redevelopment discussion with Hillcrest,” Scott Neal, Edina’s city manager, said. “We are confident that when they begin to get clients and move through our regulatory system that — because they are well aware of our preferences and regulations — it will cut down a great deal on the time and trouble.”
The timeline for developments has shrunk industrywide as systems are streamlined and clients demand a quicker turnaround. Such growing pressures often force developers to simplify their vision in order to appease both government bodies and clients. But because Hillcrest is working lockstep with Edina officials, there are assurances that it won’t hit major roadblocks that can delay a project and dissuade potential tenants.
Hillcrest and Cushman can now court high-end office users that are looking “to do things basically at the drop of a hat,” Tankenoff said, and offer the clients the creative opportunity to design a space that works today with plenty of room for future expansions.
“The economic opportunity is massive. We think because of its location right off highways 100 and 494, it will attract high-end businesses and medical,” Neal said. “We think those businesses are spot on for the direction we want our local businesses to go.”
In return, Edina gains assurances and input on the project’s direction. It also will collect user fees from the tenants to operate the Fred Richards public park.
“Part of the major redevelopment around Fred Richards is going to be taking advantage of the Hillcrest redevelopment,” Neal said. “The faster they redevelop those north parcels, the faster we can get at the park redevelopment.”
The city has agreed to provide Hillcrest with tax increment financing on a pay-as-you-go basis. As Hillcrest adds investment, property values will rise, and the city will return the difference in tax value, up to $54 million.
The Metropolitan Council provided $1.2 million in grant funding for environmental remediation, primarily to remove asbestos from the 1960s buildings. The state economic development agency contributed $625,000 to demolish a tower on the site.