A New Orleans developer that recently bought the historic Plymouth Building in downtown Minneapolis has secured $65 million in financing from U.S. Bank to transform it into a hotel.
The bank’s announcement is the first official confirmation of the new owner’s plans to turn the 12-story building into a 290-room Embassy Suites by Hilton. It’s the latest redevelopment plan after several failed efforts, including attempts to turn it into apartments in 2013 and an ultraluxury Conrad Hotel in 2014, each by different developers.
Louisiana-based HRI Properties, which specializes in adaptive and historical reuse projects, purchased the 384,000-square-foot office building in May for $20 million, according to a public filing.
“This project is a tremendous undertaking, given the size and scope of the renovation. But it’s important to preserve Minneapolis’ history and flair by returning the Plymouth Building to active use,” said Michael Coolidge, chief investment officer of HRI Properties of Minneapolis, in a release.
Ryan Cos. of Minneapolis is the project’s general contractor.
The 105-year-old building, at the northeast corner of 6th Street and Hennepin Avenue S., is currently home to Lyon’s Pub on the ground floor. Its corner-facing front door is opposite the newly revamped Mayo Clinic Square, formerly known as Block E. It’s one block from where Mortenson Development Inc. is building a 244-room AC Hotel by Marriott.
U.S. Bank says the total acquisition and renovation cost will total $109.6 million. The lender is being partly repaid by $16.2 million in federal historic tax credits. The city of Minneapolis is giving about $1.5 million in environmental and transit-oriented district grants for the redevelopment.
“It’s a very strongly underwritten deal,” said Bob Von Hoene, vice president of U.S. Bank’s community lending. “We are a relationship lender and probably wouldn’t have done this particular deal with a brand-new client.”
U.S. Bank has invested more than $100 million in HRI’s projects across the country in the last decade, he said. This was the right client, the right location and the right property, “and it was definitely the right play in terms of the hotel brand,” Von Hoene said.
The bank’s front-end due diligence, as well as its familiarity with Minneapolis, gave the lender confidence in supporting an Embassy Suites on the site.
At the time of its construction in 1910, the Plymouth Building was among the world’s largest reinforced all-concrete office buildings, according to Preservation Design Works. This, along with other engineering advancements used in its construction, made the building eligible for the National Register of Historic Places. It was placed on the list in February 2014.