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Monday, December 06, 2010

Developer taking big chance on old 3M site in St. Paul

Please click onto the COMMENTS for the story.


Anonymous Pioneer Press said...

Many challenges stand in way of reuse, but St. Paul's price is right: $1 for one year
By Frederick Melo
Updated: 12/05/2010 09:16:19 PM CST

Would you buy 3M's old headquarters for $1?

Given a host of conditions, many real estate firms would not, but a high-end developer has entered into an agreement to do just that — purchase and redevelop four buildings on the former 3M campus in St. Paul's Dayton's Bluff neighborhood.

Ironton Asset Fund, an affiliate of Exeter Realty, has a year to turn the buildings into centerpieces of the Beacon Bluff Business Center, the St. Paul Port Authority's long-term vision for the former home of one of Minnesota's most famous employers. The buildings sit on 4.3 acres toward the west end of the 61-acre campus, in a triangle bounded by Phalen Boulevard, Arcade Street and East Seventh Street.

No one's denying that getting them fixed up and leased to businesses, nonprofits or government agencies is a lofty goal in a sluggish economy.

"We have a year to basically figure out what to do with these buildings," said James Stolpestad, Exeter chairman and chief manager of the Ironton Asset Fund. "They're empty. They're in a part of town that's somewhat depressed. It's going to take some luck and ingenuity to come up with tenants and users. If we're not successful in that year, we're not going to complete the purchase."

He'll face a number of requirements. His firm's 10-year work-force agreement with the Port Authority requires that any employers occupying the site pay their employees at least $11 per hour plus benefits. The agreement urges, but does not mandate,
that 70 percent of employees live in St. Paul.

There's also a requirement of 3 employees per 1,000 square feet of useable workspace in the former 3M headquarters, and 1.5 employees per 1,000 square feet of useable workspace in the other three buildings. All told, Ironton has 475,000 square feet to experiment with.

8:40 AM  
Anonymous story conclusion said...

Stolpestad is hopeful but not making any promises. The first time his company looked at the property about a year and a half ago, he said, he "kind of put it aside as a real big challenge."

The Port Authority encouraged him to reconsider. The old 3M headquarters is "a classic building," said Port Authority spokesman Tom Collins. "It's in really good shape. The others are former tape manufacturing and storage facilities."

The headquarters likely would qualify as a historic building, putting it in line for state and federal tax credits equivalent to 40 percent of the cost of rehabilitation, and the purchase fits Ironton's goals of buying distressed or undervalued properties and making classics out of jalopies.

"If we can actually make something happen there, it will be good for the city, it's a satisfying intellectual exercise, and hopefully we can make some money," Stolpestad said.

The 61-acre campus is the largest redevelopment project the Port Authority has undertaken in more than 20 years. The campus is bounded, roughly, by Phalen Boulevard, East Seventh Street, Arcade Street and Johnson Parkway.

3M, now based in Maplewood, occupied 46 acres for a century but moved the last of its operations in 2008. The Port Authority bought the campus and adjoining parcels in stages, closing on the last 11 acres last December.

The goal is to guide its development into a business campus. HealthEast Medical Transportation, an ambulance company, recently became Beacon Bluff's first major occupant, with a new 46,000-square-foot building at the west end of the campus near Arcade Street and Reaney Avenue.

Baldinger Bakery, which supplies hamburger buns to McDonald's, is completing a 144,000-square-foot plant at the east end of the campus.

The Port Authority's Board of Commissioners approved the Ironton sale Oct. 26. Ironton's other projects include the redevelopment on an old furniture warehouse on University Avenue in St. Paul into at least 100 market-rate apartments.

Exeter Realty's projects have included the Highland Crossing retail center in St. Paul's Highland Park and the Lunds grocery store/retail center and its Cobalt Condominiums, a 93-unit complex, in Northeast Minneapolis.

Frederick Melo can be reached at 651-228-2172.

8:40 AM  
Blogger Bob said...

This will be great for the east side if they can get business to move there.

I would love to see the old power plant developed on the river. One would think this property has more potential than the 3M site.

8:47 AM  
Anonymous Anonymous said...

St.Paul can't even get the Kellogg Street ADC jail deal done so why houd anyone ever think this deal will pan out.

10:38 AM  
Anonymous Anonymous said...

10:38 - the jail is owned by the County not by the City... OMG its like talking to 3 year olds...


I do think that having a developer like this taking a serious look at the redevelopment of the site is a huge plus.

A part of the site has already been acquired by health east as their new ambulance refitting location. And like it said in the article there is a new industrial bakery just down the corridor being built. All with good paying jobs. All done by the Port Authority.

As to the old power plant. Two issues. First it is still in private hands... somebody owns it, so the City can't do anything unless the owner has a plan.

Second, most of the area there was designated in the flood zone. It is very difficult to develop on river front land unless the land itself is designated outside of the flood-way. Like the stuff they did along Sheppard, they had that land taken out of the flood zone and the City then has to show to the Fed's where the water will go.

Every time they build a levy to take land out of where the water goes during a flood, the City has to show who gets it.

I think Thune was able to keep the building itself out of the flood zone (so you may be able to do residential) but all of the land that surrounds it is in. So, to use the space for business you'd need levies and an approval of a new flood plan from the Fed's.


Chuck Repke

12:26 PM  

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