Developer United Properties has a new, shorter plan for its tower on the Nicollet Hotel Block in downtown Minneapolis.
The Bloomington-based developer, having entered the city entitlement process, is seeking approval for the $10.4-million land purchase of a block along Nicollet Mall just north of the Minneapolis Public Library. New public documents on Monday revealed the contract terms between the land seller, which is the City of Minneapolis, and United Properties, the real estate arm of the Pohlad Companies.
United Properties originally proposed a 36-story, mixed-use project of 300 apartments, 182 hotel rooms and a four-story building that will include amenities for the housing and lodging components as well as retail, commercial and public space.
Under the new plan, United Properties is asking for leeway to drop the tower's height to 30 stories if — at the time of construction — the apartment and hotel market is weakening. As of Monday, the plan is for about 33 stories and there would be more hotel rooms, about 300, and fewer apartments, around 150.
The site was the subject of an unusually high-profile competition among developers last year. The city selected United Properties, citing its higher sale price offer and development costs of $161 million, which Minneapolis officials said would bring more money into its coffers than competing proposals would. Katter said this estimate will change depending on the final plans, but said he believed that it will be around the same or perhaps even higher.
The first public meeting on the contract terms is scheduled for Tuesday with the community development and regulatory services committee.
If the various committees and the full City Council approve the sales terms, United Properties must close the deal by July 2017, or at the latest by January 2018 — a delay that would come with a $400,000 penalty fee. United Properties will also pay the city more than $1 million in a "good faith" deposit at the time of council approval.
"We are hoping there is a groundbreaking this year but, realistically, it will most likely be the first quarter of 2017," said Bill Katter, president and chief investment officer for United Properties.
Some of the changes reflect the desires of United Properties' new partners in the project.
Last February, the city gave United Properties exclusive development rights for 12 months. Since then, the developer lost its hotel brand and changed both its apartment developer and architecture firm. Bloomington-based StuartCo backed out as the apartment developer, concerned about timing in the market cycle, and United Properties replaced the company with Greystar, a large national apartment developer based in Charleston, S.C.
One noticeable change to the building's exterior — in addition to a more translucent look on the shorter building and a more symmetrical tower shape — is the position of a future streetcar that's proposed to bisect the block. The streetcar's alignment took the most time during negotiations, said Katter.
"The path of travel through the site, the stop within our site and the alignment through the intersection," Katter said, were all details to be hashed out with their team's design.
The project's original architect, LHB Corp., proposed having the streetcar sweep beneath its 36-story tower. Images released by new designer, ESG Architects, show the streetcar passing on the plaza, but not under the actual building. ESG was brought on as the architect at Greystar's request.
United Properties and its partners also asked city staff to consider closing down Nicollet Mall between Washington Avenue S. and 3rd Street S. — but the city refused.
"We were championing our green space and Cancer Survivors Park by closing Nicollet Mall on that block," Katter said. The developer is also working to establish "skyway connection agreements" with both Hennepin County and the Opus Group, the owners for the two properties United would connect through to join the system. Hennepin County representatives believe there is support in the county for the connection and Opus has said, according to the documents, that it is also willing to accept a connection.
Kristen Leigh Painter • 612-673-4767
