After years of delays and months of speculation, developers have decided to build a mixed-use project that includes a hotel, office space and condos on the former site of the Nicollet Hotel in downtown Minneapolis.
Developer United Properties and partner JMI Realty Inc. plan to submit a land-use application to the city this week that shows their intention to construct what has been called the Gateway development on the vacant site, United Properties spokeswoman Sheila Thelemann said Monday.
While few other details were provided, the plan includes a "luxury hotel," a piece that has been up in the air as United Properties leaders wavered in recent months on its financial viability due to a softening Twin Cities hotel market.
When the city gave it exclusive negotiating rights for the project in 2015, United Properties had originally proposed to build a 36-story mixed-use project with apartments and a hotel on the prominent city-owned property, located at the corner of Hennepin and Washington avenues next to the Nicollet Mall. The City Council approved redevelopment terms and authorized the land sale to United Properties early the next year determining it would be a mixed-use tower of at least 30 stories with a hotel, residential, commercial and/or office uses.
Since then the project has changed multiple times in scale and in makeup as United Properties has had to ask the city for several extensions as it secured financing and partners.
In March, RBC Wealth Management confirmed it would be an anchor office tenant which solidified the office component of the project. In April, United Properties released new designs for a $330 million tower that in addition to the offices was supposed to include a Four Seasons hotel with around 275 rooms and about 20 condominiums.
But in just the last few months, the project has had several iterations.
By June, United Properties suggested an alternative that would be limited to apartments and offices. Company leaders have said its hotel proposal may not be feasible due to the local Twin Cities market garnering lower room rates than what they needed, among other market factors.
"We haven't finished our thinking about the hotel, but I would say it has been a challenge to get the investment community to accept the required hotel overnight room rates," Bill Katter, president of United Properties, said in an interview to the Star Tribune around that time.
In its last submission to the city, United Properties suggested a 30-story, primarily office option.
Still, United Properties leaders have said repeatedly that the hotel design was the preferable plan.
United Properties didn't disclose the breakdown or height of the project it plans to submit to the city this week, but the development company said it expects to announce more details within the next month.
The future of the Nicollet Hotel Block has been in flux for decades. The former Nicollet Hotel was demolished in 1991, and the site has primarily served as a parking lot since.