Schafer: Northrup King's success with artist community shows that capitalism works

Last week there was news that the nonprofit Artspace Projects Inc. has agreed to take over and thus "preserve" the Northrup King Building in Minneapolis by keeping this home for artists out of the hands of for-profit developers.

Yet no one quite got around to pointing out that for decades Northrup King was owned by one of the most hardheaded and gutsy developers this region has maybe ever seen, the late Jim Stanton. He shouldn't get much credit for envisioning an artist community, yet Stanton kept his money tied up for years in the project.

And you have to wonder, again, exactly what is wrong with trying to make money or why a nonprofit has to step in when even this building seems to be evidence that there is a market that still works.

With the Northrup King Building, Stanton eventually offered exactly what a segment of the Twin Cities market really valued — abundant space about as cheap as it gets for a building that is still standing.

Stanton was already a veteran developer when, with partner Keith Harstad, he invested in the Northrup King project in 1986, although Harstad soon had other problems and left the project.

The Northrup King facility is actually 10 buildings, dating back to 1916. It is just north of downtown Minneapolis in an industrial area served by two freight lines. Northrup King & Co., once well known in the region for its catalogs of seeds for gardens and farms, had moved its operations.

As Stanton later recounted, Harstad had a simple idea: to buy 780,000 square feet of industrial space for roughly $2 million. At that price, why, they are practically giving it away.

In the mid-1990s, Stanton considered letting the building go instead of paying property taxes, said Debbie Woodward, the longtime building manager and Jim Stanton's daughter.

"So instead my dad called me," she said. "And he showed it to me, and he said, 'Just fill it up.' "

Their approach was creating empty shells for the artists to paint and finish as they chose, without investing in any building amenities. The marketing became less about a building for lease and more about the benefits of joining a thriving community, a place for artists to raise their profile and generate more interest in their work.

Stanton decided not to borrow money for a top-to-bottom redevelopment of such a big property. Woodward instead renovated parts of the facility out of cash flow.

Artspace became involved because Woodward called, and the family never actively sought another buyer. Developers had approached them from time to time, even before Jim Stanton died in 2017. Did these prospective developers hope to change the use to maybe offices or residences? "Absolutely," Woodward said. "Right? Isn't that what people do?"

Visitors from the rest of the region who come into the neighborhood, perhaps for an art crawl, see how undeniably cool it all is and think, maybe this wouldn't be so bad as a place to work or live.

Not far from the Northrup King Building these days is another World War I-era building called Highlight Center, a one-time light bulb factory that Minneapolis-based Hillcrest Development turned into upscale offices for technology and other firms. Right next door to Northrup King is a renovated building that includes a Fueled Collective co-working space.

At least four craft breweries lie within walking distance from Northrup King, and Tattersall Distilling for the harder stuff is just across some railroad tracks.

What has happened to this neighborhood is an old story, of course, as artists become a neighborhood amenity and an accelerant for gentrification.

Kitty-corner from the Target Field baseball stadium, for example, is an upscale office called the Ford Center. It once was an assembly plant for Model-T Fords, a Honeywell facility and later the home of a small business consultancy I had co-founded. The big transition came in the 1980s when Hillcrest Development took over. It didn't take long for artists to find it.

All that changed, of course, in a gentrifying neighborhood with a new stadium and transit hub close by. In 2011, affiliates of the Pohlad family completed a $42 million renovation of Ford Center. Of course, by then, the artists were long gone, some maybe moving across the river to the Northrup King Building.

Just guessing, but bringing the Northrup King Building up to the standard of the current Ford Center might be a $100 million job, and that is provided there is a good business case for doing it.

If that were to happen, the tenants there now would have to find somewhere else to go, and that is after investing a ton of their own time into making their corner of this neighborhood more attractive. As to where, the argument of the nonprofits is that artists face the same problem as lower-income families — there is a regionwide shortage of low-cost real estate.

In a way this suggests that Northrup King is the last good place left, that there is not much opportunity anymore to make studios out of funky old buildings in districts zoned for industrial uses.

It would be worth doing a thorough property search to find out if there really aren't any more for-profit industrial landlords still around who might welcome someone willing to pay a little rent.