Karen Althen runs Station K Marketing in the Brin building in the North Loop. Below her was team assistant Alex Waters.
Glen Stubbe, Star Tribune
The Brin building’s exterior at 600 Washington Av. N.
Glen Stubbe, Star Tribune
Mass transit leads to a big transition
- Article by: DON JACOBSON
- Special to the Star Tribune
- October 11, 2012 - 7:28 PM
It's only a few miles between a pair of spots along Minneapolis' Washington Avenue, but the quick jaunt between them marks two very different eras in the business lives of building owners Darrin and JoAnn Mercil.
Darrin Mercil was the third-generation owner of Mercil's Campus Auto Repair at 630 Washington Av. SE. before light-rail construction and a student housing boom near the University of Minnesota's East Bank told him it was time to hang up the lug-nut gun for good.
This summer, he and wife JoAnn left behind the now-demolished family car repair business and invested their futures farther up Washington in an area that's hosting another kind of transit-oriented boom.
The Mercils in August closed on their $3.65 million purchase of the 93-year-old Brin building at 600 Washington Av. N. It's in the heart of the North Loop, a mixed-use conversion of the former home of the Brin Northwestern Glass manufacturing and distribution company.
Darrin Mercil said the purchase and the couple's new role as landlords in the quickly redeveloping North Loop was made possible when the Opus Group paid his family a healthy sum for the car-repair parcel, which the developer is using for its new, six-story Station on Washington apartment project.
"The whole Southeast Washington Avenue area has changed over time, and I think we finally got to a point where we could look ahead 10 years and say, 'You know what? This is a great location for a service shop but being right on the light-rail line, it just isn't what's being envisioned in the city plans,'" he said.
The Brin building's seller was St. Paul-based Times Ventures Corp., another family real estate company. According to Hennepin County records, Times Ventures bought the property in 2000 for $1.18 million.
The Mercils' move is an illustration of the evolution in the city's real estate patterns as new modes of mass transit are being brought online. Their 85-year-old repair business was a victim of the changes -- its location on what will soon be a U of M light-rail transit mall made a car-oriented business there untenable.
But the 100-percent-leased Brin building should benefit greatly from the coming of the $79.3 million Interchange transit hub near Target Field. The project, which was approved this year by Hennepin County, will serve the same light-rail trains as well as the Northstar commuter rail service.
"We've really come full circle," Mercil said in a bit of irony. "It's a really nice property and a real solid building. It looks like something that we'll enjoy and is just as solid as what we had. It's constructed really well, and the uniqueness of the layout is attractive."
The family is not inexperienced when it comes to owning multifamily properties. In addition to the former car repair business, the Mercils have also owned a handful of rental buildings over the years, but nothing like the four-story Brin building.
In the early 2000s it was one of the first loft conversions in the North Loop. Its former owner created retail spaces on the first floor and carved out 17 upstairs units, which were originally intended as residential condominiums but later marketed as live-work rentals. Some of the upstairs live/work tenants have since turned their units into pure work spaces.
Among its commercial tenants are Black Sheep Pizza, Station K Marketing and Perfect Getaway Day Spa.
The deal was accomplished as a "1031 exchange," a commonly used procedure in which commercial real estate owners who roll the profits from the sale of one qualified property into the purchase of another can defer the capital gains taxes on the transaction, said Ted Abramson, a multifamily property specialist with CBRE Group who facilitated the transaction.
"What the previous owner did was pretty unique in bringing some commercial tenants in the first floor and mixing office with some residential in the upper floors, which has made this kind of a 24/7 living atmosphere," he said.
Don Jacobson is a St. Paul-based freelance writer.
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