The historic status of the buildings attached to Nye's Polonaise Room is a new and significant wrinkle in the owners' plans to close the landmark night spot and replace it with a massive apartment building.

Two of the four buildings that make up Nye's were constructed in the early 1900s as a saloon and a harness shop — the latter use is still proudly emblazoned atop the facade. City staff say the structures help comprise the St. Anthony Falls historic district, giving them a level of protection held by few buildings in the city.

To demolish them, owners would need to prove they are structurally unsafe or that no reasonable alternatives exist for reusing them — a high burden of proof.

Developer Brad Schafer said Friday they are not sure whether the new development will include the existing buildings. Property owner Rob Jacob was less optimistic, due to existing structural problems.

"I don't know if they can be incorporated into the new project," said Jacob, noting the constant repair of failing parts of the building.

The issue is likely to pose a difficult test for a City Council filled with new members who have advocated for large residential housing developments along the city's key corridors. The council, however, sided with preservationists in February when faced with a similar decision over whether a new hotel should replace a one-story Dinkytown building, which was not part of an existing historic district.

"Any development that's going to go there has got to incorporate the historical character," said Council Member Jacob Frey, who represents the area. "And that harness building adds to the neighborhood quite a bit."

In his six years with the city, architectural historian John Smoley could not recall the demolition of another building that contributed to the significance of a historic district.

"It's already been identified as significant to our community's shared heritage," Smoley said. No one has yet applied to demolish these properties, however.

"If you allow somebody to just tear down buildings that contribute to a district, that sets a dangerous precedent for future development," said Elizabeth Gales, president of Preserve Minneapolis, a volunteer preservation group. "What's going to stop the next person from saying 'Well now I'm going to tear down this.' "

The St. Anthony Falls Historic District was one of the state's first such districts when it was established in 1971. It is both locally and nationally designated.

The district covers a section of the city's core surrounding the Mississippi River, including the North Loop, the Mill District, Nicollet Island and East Hennepin Avenue. It features the oldest church in the city, Our Lady of Lourdes, and the oldest commercial building, now the Aster Cafe, both just blocks away from Nye's Polonaise.

Denis Gardner, who oversees the national register for the State Historic Preservation Office, said the district was established so long ago that it did not feature a comprehensive list of which properties were "contributing." But Smoley said it is the city's opinion that it includes the two Nye's properties.

Nye's itself opened in 1950. The newer middle building — featuring an image of a piano player — and another to the east next to a parking lot are not yet considered contributing parts of the historic district. The two older buildings, which are recognized as historic, also feature eight apartments.

Jacob said the restaurant must close regardless of the development's fate, stressing that the decision to close came before his pursuit of the project. Despite packed houses on Friday and Saturday nights, when a seat around the piano table or a spot on the polka dance floor can be hard to find, he said weekday traffic is so low that the business is not viable.

"Two days a week does not keep a restaurant open [with] this particular kind of concept," Jacob said.

Schafer, who envisions a concrete and steel building up to 30 stories, said they need to analyze whether the existing buildings could be included in the new plans.

"At this point, some questions have been asked but no answers have been provided yet," said Schafer, a principal at developer Schafer Richardson, which recently signed a joint venture agreement with the property owners.

Demolishing part of the buildings and incorporating the street-facing facades into a new one — sometimes called a facade-ectomy — is not generally embraced in the preservation community, Gales said. "It's sort of fake … feeling," Gales said.

A significant alteration also cannot diminish the building or the district's historic character, under city rules.

If the owners apply to alter or demolish the buildings, the city's citizen-led heritage preservation commission will be the first to vote on the matter. Owners may then appeal that decision to the City Council, which has occurred several times in recent years.

But even if the council allows for demolition or substantial alteration of the buildings, an outside group could seek to halt the wrecking ball through the courts.

Such was the case in 2012 when two groups successfully stopped demolition of downtown's 1975 Peavey Plaza under the state's Environmental Rights Act, which protects historically designated properties.

Two decades ago, the same law stopped demolition of the 1935 Armory in downtown Minneapolis to make way for a new jail, leaving it to instead become a rundown parking lot.

"That doesn't necessarily mandate that the owners have to rehabilitate the existing building or keep it open," said Erin Hanafin Berg, with the Preservation Alliance of Minnesota, which pursued the Peavey Plaza case. "So there's kind of this [question of], Well, is that the outcome that you want?"

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