Ecolab reaches agreement to sell former headquarters in St. Paul

Ecolab Inc. has reached an agreement to sell its former corporate headquarters in downtown St. Paul to a team of local developers who plan to revamp the building into "modern office space."

The group is led by St. Paul-based PAK Properties, which was behind several other St. Paul redevelopment projects, including the conversion of the Medical Arts Building and the Pioneer-Endicott buildings.

"St. Paul is a wonderful place to do business," said Rich Pakonen, head of PAK Properties, in an interview Wednesday. "Ecolab is a fantastic community partner. [We've] got a great team. … We are super excited about the project."

Terms of the deal were not disclosed, and Pakonen declined to give more details on plans for the 280,000-square-foot building at 370 Wabasha St.

Ecolab, a longtime booster of development in downtown St. Paul, has moved to the former Travelers Cos. 17-story north tower. That landmark structure with the pyramid-shaped roof sits a few blocks from the Ecolab building.

About 2,500 Ecolab employees, who were spread among three buildings in St. Paul, have been moving to the new 882,000-square-foot tower for several months. Most of the moves will be completed by 2018. Ecolab makes cleaning, sanitizing and water treatment chemicals. It has $13 billion in annual revenue and about 47,000 employees.

The company's commitment to downtown St. Paul has been hailed by Mayor Chris Coleman and others who are trying hard to keep the city a vibrant home for businesses, sports, the arts, festivals and residents. The decision to sell to the PAK Properties redevelopment team was in keeping with the corporation's past promises.

The company reached an agreement with Haddington Associates, which owns the Ecolab Corporate Center, to solicit development proposals with the help of real estate adviser group NTH Inc.

There had been several developers who submitted proposals for the building, including St. Paul landlord Jim Crockarell, who had intentions of converting at least some of the space into housing.

"We believe that increasing the availability of attractive office space and ultimately attracting new businesses is the highest priority for downtown St. Paul," Bjorhus said.

St. Paul's office market has been in a state of flux. The occupancy rate for competitively leased buildings increased in 2016 to 83.4 percent, according to a report released last October by the Greater St. Paul Building Owners and Managers Association.

But the study didn't reflect the losses of software company When I Work, Inc., which moved last fall from St. Paul to the North Loop of Minneapolis, and Cray Inc., which had operated out of Cray Plaza since 2009 and will have its grand opening at a new office tower at Mall of America in June.

Local entrepreneurs and investors Scott Burns and John Bergstrom also are part of the group. Burns last fall sold for $153 million his company GovDelivery, which provides digital communication services to government agencies. Bergstrom is a partner at Riverpoint Investments of St. Paul.

Nicole Norfleet • 612-673-4495