Major Uptown project snaps back to life

After years of debate, financing woes and retooling, the MoZaic is finally getting off the ground in Uptown with help from about $9 million in tax-exempt stimulus bonds.

Crews started work this week on the 10-story commercial building that will rise from part of the parking lots behind the former Walker Library and the Lagoon Cinema in the heart of Uptown in south Minneapolis. Part parking ramp, part high-end speculative offices on top, and with two restaurants and a public plaza built in, the $45 million project is scheduled to be finished in a year.

Supporters say they hope it will attract more daytime business and jobs to a neighborhood that's a little more party than paycheck.

"It's our 'thank you' to Uptown," developer Stuart Ackerberg said.

Ackerberg said he was born and raised in Uptown, and is dedicating the MoZaic to his father, Norman, an apartment developer and construction contractor who helped create the Ackerberg Group. His father was developing in Uptown before Calhoun Square was built, he said.

The group has massed major holdings in the area. Altogether it owns 22 projects in Uptown, including 320 apartments and condo units. That includes 1320 Lagoon Av., where the MoZaic will be, as well as the building next door that's home to Bar Abilene, an Uptown staple.

Ackerberg said he has plans for a phase II of MoZaic -- another 150,000-square-foot commercial building -- next to the one under construction, but that's currently just a concept.

The city's decision to issue $9.3 million in Recovery Zone Revenue Bonds for the six-level parking ramp in MoZaic sparked some controversy since the structure will only generate about two full-time jobs. The stimulus bonds enable the city to sell more-desirable tax-exempt bonds for projects, bonds that normally are only available for public interest projects such as building roads and bridges. The city is also issuing another $700,000 in regular taxable bonds to help the MoZaic parking ramp.

It's not just a parking ramp, Ackerberg argues. The parking, with space for 456 vehicles, was critical to making MoZaic happen, he said, and the project will supply badly needed top-flight office space, restaurant jobs and connect the area with the Midtown Greenway and bike trail, as well as to the residential neighborhood to the north.

Minneapolis City Council Member Lisa Goodman, chair of the community development committee, said she reluctantly agreed to giving the MoZaic's parking structure the $9.3 million in tax-exempt stimulus bonds. The city was in a "use it or lose it" position with respect to the bonds, she said. Goodman said she still thinks that parking in Uptown should be paid for by revenue from people who use it.

"If the revenue generated will not be enough to pay back the financing, then federal stimulus money is basically being used to subsidize parking, not something I am too excited about," Goodman said via e-mail.

Council Member Meg Tuthill, whose 10th Ward includes Uptown, said the area is desperate for more parking, and for more day jobs that require parking.

The rest of the Minneapolis share of Recovery Zone Revenue Bonds is going to build a new headquarters in the Mill District for the American Academy of Neurology ($15 million) and to renovate the former Honeywell Research facility in northeast Minneapolis for Open Access Technology International, a utility software company ($23 million.)

MoZaic is also getting private funding. MidCountry Bank is financing $10 million for MoZaic's first floor, the plaza and some work on the remaining surface parking lot. The Ackerberg Group is financing the remaining $24 million itself, bringing the total project, which Ryan Cos. is building, to about $45 million.

MoZaic's first floor has space for two restaurants. Ackerberg said he has a letter of intent from a prospective tenant that he would not name for a 7,000-square-foot restaurant. The restaurant "would be a new concept to the Twin Cities," he said.

Outside there will be a half-acre public plaza with art and seating that would connect the building to the Lagoon Cinema. The plaza would include a bridge over the Midtown Greenway, as well as a ramp down to the bike path.

Ackerberg said he doesn't have any tenants lined up for the 65,000 square feet of office space on the top three floors, but he feels confident he'll get them because the neighborhood is attractive and has so little large Class A office space to offer.

"I think Uptown rather desperately needs daytime population," Ackerberg said.