Minneapolis City Council approves land sale of Nicollet Hotel Block to United Properties

After a few weeks of tense talks over last-minute design changes, the Minneapolis City Council on Friday approved the land sale of the Nicollet Hotel Block for redevelopment to United Properties.

The city will sell the downtown land to Bloomington-based United Properties for $10.4 million, but added a contingency to the term sheet in an effort to ensure the building's final design meets its expectations.

Sale and redevelopment of this city-owned block, currently a surface parking lot, has drawn significant public attention. The city granted exclusive negotiating rights to the Bloomington-based developer last February following a competition between four developers. After changing one of its project partners, United Properties also switched architecture firms in December, just two weeks before seeking City Council committee approval.

This required that the development team revise all of its project renderings since its previous architect, LHB Corp., owned the rights to the original design.

Its new designer, ESG Architects, submitted a rough model of its new design in public documents before it had time to fully detail its plans. Several city council members, including Lisa Goodman and Jacob Frey who represent the downtown districts, pushed back on the developer for what they felt was a lackluster appearance.

"For our Jan. 5 meeting with the city, we included in the public package a site plan, which showed an approximate scope of the building, but was not intended to show design details, which are forthcoming," said Bill Katter, president and chief investment officer for United Properties.

The blowback led to the formation of a city task force that met with the development team with the goal of coming to agreement on a new design.

The city task force has seen ESG's latest design renderings. Those won't be available to the public until the spring, Katter said.

But the city's contigency requires that the final design, which must gain approval from the Planning Commission, cannot stray too far from what the developer presented to Council members this week.

"We're not just concerned with money, we are concerned with design and build out. That's the difference between a public and private sale," Frey said. "We went form a block-like massing image a week ago to a tremendous urban design today."

United Properties original design called for a 36-story mixed-use tower that included apartments, hotel and ground-level attractions. It's final height is unclear, but the term sheet requires United Properties build at least 30 stories for a project it has dubbed "Gateway," Its project partners include Greystar (a national apartment developer) and JMI Realty (a luxury hotel eveloper).

Katter said his firm will also be working to select a hotel brand by the spring.