“We went for a home run, and we struck out.”
That’s how Erik Hansen, the City of Minneapolis project coordinator for Broadway Plaza, described the latest chapter in what he calls the “high risk, high reward” story of redevelopment along West Broadway.
On Sept. 15, Hennepin County seized the property at 800 West Broadway because of delinquent property taxes. Once the centerpiece of a proposed $70 million development that would have included a YWCA fitness center, retail shops, offices and off-street parking, it’s now among several contiguous properties to change hands because of unpaid debt.
The developer on the project, Great Neighborhoods! Development Corporation (formerly American Indian Neighborhood Development Corporation), has a 30-year history of successful city partnerships, developing a shopping center and other business property in South Minneapolis. A Great Neighborhoods subsidiary had purchased all the property on both sides of Aldrich Avenue N between West Broadway and 21st Avenue N. The 800 building, which would have been the site of the fitness center, was owned by a corporation that was co-owned by the Great Neighborhoods subsidiary and the YWCA of Minneapolis. The YWCA withdrew from the project in 2009.
Hennepin County property records indicate that the Great Neighborhoods subsidiary still owns some of the properties, others are now owned by Franklin Bank in Minneapolis, and Drake Bank and Highland Bank in St. Paul.
Great Neighborhoods filed for bankruptcy protection in June, 2010.
“The developer wanted to build a 24-hour YWCA fitness center in a very important corridor of the city,” Hansen said. Such endeavors have “a lot of up-front costs—holding costs, assembly costs. If you have deep pockets, you can withstand” changing economic conditions, but “it got away from them,” and “lenders wanted their money.”
“This is an organization that did have success. Its projects have had a positive impact on the community,” he said. Broadway Plaza was “one of the higher risk, higher reward” development projects. Other recent West Broadway-area redevelopment projects have gone well, he said, including the 1101 building, Juxtaposition Arts, the 1200 building, the Five Points building, the Minneapolis Public Schools headquarters, Cub Foods and the Emerge Technology redevelopment near Emerson and West Broadway.
With 800 West Broadway now owned by Hennepin County, the City of Minneapolis will get a chance to acquire it for redevelopment purposes. Hansen said he is not certain what the City will do.
The City’s financial participation in the Broadway Plaza project includes $732,000 in grants and a $136,000 Empowerment Zone loan.
“The City has the option [to acquire the property],” he said. “We are evaluating our options. We do have a strong interest in what happens there. We’ll have a role,” he said.