Lofts on tap at Schmidt Brewery

After two decades of seeking a suitable new use for St. Paul's vacant Schmidt Brewery, city officials exchanged high-fives Friday after a Plymouth-based developer purchased the complex's iconic structures with plans to convert them into nearly 250 rental lofts for artists by 2014.

The redevelopment is likely to spur associated plans already underway for offices, retail and event space at the historic brewery complex -- possibly even a new spot for brewing beer.

Dominium, which develops and manages properties nationally, bought the old Schmidt bottle house and the brew house -- commonly referred to as "the castle" -- for $6.2 million Friday. Its planned $123 million development will include 147 units in the brew house and 100 units in the bottle house, many of them affordable to low-income tenants. In addition, Dominium will build 13 new townhouses adjacent to the bottle house.

"We're excited to get started and turn the lights back on there. The brewery's been dark too long," said Owen Metz, senior development associate for Dominium. He added that workers will be there Tuesday to begin the process of cleaning the site of pollution.

Leaders with the city and the West 7th Street neighborhood surrounding the brewery property were ecstatic, not to mention relieved, when word came at 4 p.m. that the deal was done.

"We're closed!" yelled City Council Member Dave Thune, who has worked on possible reuses for the site since the 1990s, including several controversial years when it was used to produce ethanol.

The brewery is a neighborhood landmark -- not coincidentally, the name of one of the last beers made there -- and one of St. Paul's most familiar sights. Dominium's plans ensure it will remain standing and provide in-demand affordable housing as well.

"This project has been sitting there, begging to happen for so many years, and it's finally happened," Thune said.

Cecile Bedor, St. Paul's planning and economic development director, credited Dominium's tenacity and the state's historic preservation tax credit for sealing the deal. Total tax credits for the project, which include low-income housing, come to about $70 million.

"Historic preservation is really hard to do but St. Paul is a historic city, and advocates have always touted the economic impact of historic preservation," Bedor said. "I think this tax credit brings it to life."

Dominium's decision to proceed with construction, after considering such a project for nearly six years, clears the way for the site's two other property owners to move ahead with their own plans.

City officials gave credit to the West 7th/Fort Road Federation, the local community council that last year purchased the brewery's Rathskeller and keg house with a no-interest city loan. Executive Director Ed Johnson said they want to find commercial uses for the space and convert the Rathskeller into an event center.

The property was sold by businessmen Bruce Hendry and Glen D. Nelson, who held onto a warehouse on a corner of the 15-acre site that might be used for a new brewing incubator, Schmidt museum and taproom, said Dave Kreitzer, who represents Hendry and Nelson and used to run the ethanol plant.

"We think there's an opportunity to do contract brewing for the Twin Cities" and provide a space for aspiring brewers to get a start, Kreitzer said.

Dominium officials first looked into converting brewery space into artists' lofts in 2007, when a project was announced with then-development partner Brewtown. The plan was for up to 100 lofts and gallery space. Dominium had played a role in redeveloping two Midway-area warehouses into the highly successful Carleton Lofts housing project on University Avenue.

Metz said that the financial markets worked against the project at first. Even now, he said, it wouldn't have been possible without the combination of the city's help, cleanup funds from the state, Ramsey County and the Metropolitan Council, and the assorted tax credits.

Metz said that gallery, performance and studio space will be provided in addition to apartments. Some units may be ready to move into by late 2013, with completion of the project expected by summer 2014, he said.

"We've done similar projects, but this is the largest project our organization has ever done by sheer dollar amount," Metz said.