The vintage Schmidt Rathskeller building on W. 7th Street in St. Paul has gone into foreclosure.
Owner Rathskeller Holding LLC is in default on its mortgage, which has a current balance of $3.2 million. The Ramsey County Sheriff's Office will auction the property, near the intersection with Webster Street, on May 11.
St. Paul developer Craig Cohen led the redevelopment of the Rathskeller, which dates to 1935.
"The Schmidt Rathskeller is a very unique and special place for Saint Paul. We have worked hard to find ways to make it work as a business and are continuing to deal with economic challenges beyond our control," Cohen said in a statement. "The current situation reflects this reality, and we are hopeful the Rathskeller will continue be a place for the community to enjoy."
The Schmidt Brewery has been a longstanding icon in that area since 1855, when it was the Cave Brewery . There have been several stops and starts to the brewing operations throughout its history, with it ultimately shutting down for good in 2002. It briefly began producing ethanol before that endeavor also ceased in 2004.
The landmark's modern history began in 2012 when the bottle and brew houses converted into the Schmidt Artist Lofts. The former keg house then became Keg and Case Market, a retail and restaurant space, in 2018. Cohen is one of the investors who owns Keg and Case.
The Rathskeller was the next building on the property up for a re-imagining soon after Keg and Case opened. The city of St. Paul had sold the Rathskeller to Cohen for $1 in 2017.
St. Paul restaurant Mancini's Char House started doing business there in January 2022. The more than 70-year-old steakhouse, which sits less than a mile down the road, leases space in the Rathskeller as an event center.
"I had a need for banquet space," co-owner Pat Mancini said. "It's a great site."
Property foreclosures do not necessarily have any impact on a building's tenants, and Mancini plans to continue business as usual. He added he has fielded many inquiries about future bookings there.
"We aren't going to close," said Mancini.
The foreclosure sale notice indicates Cohen's group has a 12-month right of redemption, under which Cohen could retain the property if he pays off the total amount due. The St. Paul Legal Ledger published the mortgage foreclosure notice, dated March 23.
The Rathskeller isn't the only local commercial real estate property struggling to make payments. The Hilton Hotel in downtown Minneapolis sold for $225 million in a foreclosure auction earlier in March. The previous owners fell behind on their loan when the pandemic caused occupancy to plunge. The hotel is still in operation.