Last of historic brewery buildings being sold for $1

Twenty years after acquiring the Grain Belt brewery complex in northeast Minneapolis, the city is poised to sell the last of the site's historic buildings.

Sale of the 1893 office building, which the City Council is expected to approve today, will finish the city's disposition of seven historic buildings listed in the federally recognized Minneapolis Brewing Company Historic District.

The city bought the sprawling complex from businessman Irwin Jacobs in 1989 after twice blocking his attempts to demolish the buildings. Jacobs used the office building as his headquarters for about nine years. The structure with vaulted ceilings was headquarters for the brewery, which operated from 1890 into the mid-1970s.

Developer Kristina Oman is buying the building for $1 and plans to rehab it for office space and a reception hall, according to city officials who negotiated with her. She operates several other rehabbed commercial spaces in Minneapolis, most recently refurbishing the Semple mansion at 100 W. Franklin Av., which includes a heavily booked reception hall.

Some council members questioned the token $1 price. "I think people would look at it and say that's a pretty sweet building for $1," Council Member Lisa Goodman said last week when the proposal came to the council's development committee.

But city project coordinator Judy Cedar said a recent appraisal concluded that the two-story stone-and-brick building's worth was significantly undercut by its deteriorating condition and significant drainage issues. A $650,000 appraisal in 2005 didn't fully take into account pollutants and water problems, and it would be tough for the city to raise the money to deal with those issues, she said.

"To be a custodian of an historic building is not a money-making endeavor," Cedar said.

Although the sale will complete the city's disposition of historic Grain Belt buildings, the city retains land and some more prosaic buildings within the complex. Some riverfront land has been sold to the Park Board for $400,000, while the city is banking other land in hopes of realizing long-delayed plans to construct close to 300 moderately priced owner-occupied housing units. It has demolished some more modern buildings with that end in mind, and plans to use the park payment to raze more this summer.

The most significant building in the complex is the iconic brewhouse. The castle-like building was sold with the nearby boiler house to Ryan Companies in 2001 for $1 to develop offices for RSP Architects, a deal heavily subsidized with public money. The city also sold two historic outbuildings in 2002 for a token amount for construction of the Bottineau library, now operated by Hennepin County.

The most significant income from the complex was raised in 2004 through the $2 million sale of another two buildings, the main warehouse and the bottling plant, to Artspace for quarters for artists.

But plans to sell much of the rest of the site for housing development have foundered.

Sheridan Development Co., a partnership of two Edina firms, was selected as the city's preferred developer in 2001, and the city set a $2 million price on the property. But state business tax cuts that undercut the usefulness of tax-increment financing as a development finance tool -- along with complications from the discovery of additional brewery foundations on the site -- kept a deal from being consummated for Sheridan's proposed $66 million housing-retail complex. The city ended Sheridan's development rights.