Grande Market Square, a three-story office building built as part of Burnsville's ambitious Heart of the City redevelopment project, has tumbled into foreclosure.
The largely vacant property was developed by Sherman Associates Inc. at Burnsville Parkway and Nicollet Avenue -- an intersection once considered the city's downtown before losing its luster after Burnsville Center was built near County Road 42. The Heart of the City development was designed to revitalize the area with offices, stores, restaurants, housing, a park and a performance center.
Grande Market Place, a retail and apartment complex next to the office building that also was built by Sherman, is not included in the foreclosure.
Founded in 1979, Sherman has had a role in several high-profile developments in the Twin Cities, including the Midtown Exchange apartments and loft condominiums in Minneapolis' former Sears, Roebuck building. Representatives of the Minneapolis company, including founder George Sherman, declined to comment on the Grande Market Square foreclosure.
Dakota County property records show a foreclosure sale Aug. 9 for $2 million to a business entity of Rialto Capital Advisors, a New York investment firm. Sherman owed more than $4.6 million, including principal, interest, taxes and other fees, on the original mortgage of $3.5 million.
Completed in 2004, the office property has struggled to attract and retain tenants. Its ground floor has two tenants, Jensen's Cafe and Ficus & Fig, but a third space once occupied by a floral shop is empty. Only about half the third floor is filled by a title company.
Meanwhile, the second floor is totally vacant. Two tenants have occupied and moved out of the space, which was designed to serve as a cooking school and banquet facility.
Skip Nienhaus, Burnsville's economic development coordinator, said he believes the building's woes aren't that unusual, given the economic downturn that sapped demand for commercial space. "Sherman faced the same thing that just about every developer in the Twin Cities has faced in the last few years," Nienhaus said.