Hennepin County moves to acquire office building near HCMC for $8 million

An $8 million downtown Minneapolis office building is headed to Hennepin County's property portfolio, even though there's no clear plan yet on what to do with it.

A Hennepin County Board committee on Tuesday unanimously endorsed acquisition of the Parkside Professional Center, pending inspection, despite the voicing of some misgivings.

Given that endorsement, the entire board is expected to approve the step toward a purchase agreement at its meeting next week. The county would pay for the building with general obligation bonds, said David Lawless, the county's budget and finance director.

County officials see the Parkside building, at 825 S. 8th St. and 826 S. 9th St., as tied to the future renovation and redesign of the health care warehouse that is HCMC, the flagship hospital of the Hennepin Healthcare system.

The county and Hennepin Healthcare, which operates the hospital, agree that a master plan for redevelopment is overdue and the current campus is too big and too old. Commissioner Debbie Goettel, chairwoman of the board's Administration, Libraries and Budget Committee, said the plan would be to "hold" and operate the Parkside building until HCMC has a master plan.

Commissioner Jan Callison said that acquiring the Parkside property "preserves options in an area of town where options are limited." The building is bounded by HCMC, Elliot Park and the North Central University campus.

John Cumming, interim CEO at Hennepin Healthcare, said there's concern that HCMC is quickly being hemmed in by new apartment and condo developments. Acquiring the Parkside building would put it in the county's hands for patient care use or as a staging area during renovations, he said.

In a sign of changes to come, Hennepin Healthcare last year opened a six-story Clinic and Specialty Center in a glassy new building across the street from HCMC's emergency entrance. The new building brought together several HCMC ambulatory clinics. HCMC also has moved in recent years to decentralize by opening clinics outside of downtown.

HCMC is the state's largest safety net hospital and a Level 1 trauma center. But it's struggling to find visionary leadership and firm financial footing. The hospital ran a deficit in 2018 and is expected to do so again this year.

Earlier this year, CEO Jon Pryor abruptly resigned his position after six years in the job. No specific reason was given, but Pryor had encountered pressure over the hospital's research with the sedative ketamine, as well as his plan to use armed private guards instead of sheriff's deputies for hospital security.

Cumming was named interim CEO in February, but the former trauma surgeon is not a candidate for the permanent job. He said Tuesday that the board is hoping to winnow the candidates for CEO by the end of the year and possibly have someone in place by February.

Hennepin County Commissioner Mike Opat said Tuesday that he would vote "grudgingly" to acquire the Parkside building to give the "incoming CEO the runway they need" to develop a master plan for the operation.

"What is our plan? How do we get out of a building or two?" he asked, adding: "That's a lot of property not on the tax roll."

In addition to U.S. Bank Stadium, which opened in August 2016, the east end of downtown is abuzz with development, especially in the area south of the stadium where the hospital is located.