Dinkytown developers open Pandora’s box: Grocery, apartment building out; hotel and mystery tenant in


In the continuing saga of Dinkytown development, Kelly Doran is now planning a hotel instead of an apartment building and the grocery store that the Marshall project developers promised the neighborhood may not materialize.  These are major changes for two of the three large developments underway in the heart of Dinkytown, the four-block business district adjacent to the University of Minnesota’s Minneapolis campus.

As construction continues on two six-story buildings and Doran plans a third, the Dinkytown Business Association, the Marcy-Holmes Neighborhood Association and the Minneapolis City Planning Department are also moving forward with a small-area plan. Developers and some other property owners in the Dinkytown area have organized to protest what they claim is neglect of their interests in the creation of this plan. For details, see Small area, big plan as Dinkytown balances preservation, development.

Kelly Doran, CEO of Doran Companies, says he has a purchase agreement to acquire two buildings on Fourth Street Southeast between 13th and 14th avenues to build a six-story hotel where he had earlier proposed a six-story, mixed-use apartment building.

“We will have retail space on street level with five stories of hotel above it,” Doran said.

Doran said he’s “in discussion” with the businesses in the existing buildings, except the tattoo parlor, whose lease will expire within the year. A couple of the businesses, he said, are thinking of closing temporarily and reopening in his new building.

Doran, owner and developer of Sydney Hall at the corner of Fourth Street and 14th Avenue, has defended his record at bringing back previous businesses on the site, even though Erbert and Gerbert’s Sandwich Shop is the only one that remains from the previous building. A bookstore also returned, but it has since gone out of business.

The CVS Pharmacy in Sydney Hall, he said, was one of the top-performing stores in Minnesota for CVS. “Therein lies the question as to what the customers in Dinkytown really want,” said Doran. “Ma and Pa businesses are great, as long as they’re catering to their market.”

“Our hope is to go through city [for approvals] early next year and hopefully start construction by summer next year with delivery of the building and hotel in summer 2015,” Doran said.

A hotel, he said, will help Dinkytown. “The hotel will drive people to businesses, bring in dollars, and help the existing community. We will have very little opposition that I’ve heard. Then the issues are what it will look like and how it will work.

“Hundreds of people every day could be staying in a hotel – people who will be buying goods and services in the community. They’ll be coming to the University to consider attending; parents will come to visit children attending the University; and some attend educational events at the University.”

Other hotels near the University are in Stadium Village and on the West Bank. They are The Commons Hotel (formerly University Radisson) at 615 Washington Ave. S.E. on campus; Days Inn Hotel, 2407 University Ave. S.E.; Courtyard Minneapolis (formerly Holiday Inn at Seven Corners) at 1500 Washington Ave. S.

Doran’s hotel will provide one level of underground parking, and a street level that would actually have more retail space than the current buildings, Doran said. Five floors of hotel above the retail would make his building the same height as the Opus Development under construction on the north half of the block, and the Marshall development now under construction on the other side of Fifth Street, on the former Marshall High School/UTEC site.

The Marshall project is being developed by BKV Group, which had told the neighborhood the six-story mixed-use building would have a grocery store as the major ground-floor tenant.


In May, the Marcy-Holmes association supported variances for large trucks to make deliveries to the proposed Fresh City Market owned by Fresh Madison Market of Wisconsin – a company that had planned to expand into Dinkytown and the neighborhood of Purdue University in Indiana.

Jeff Mauer, owner of Fresh Madison Market confirmed that negotiations with BKV Group’s Realtor have broken down after “many months.”

“It was all about the cost,” said Mauer, who would not say how far apart they were on the price of rent. “I thought the students and the neighbors were excited to have us come, but the economics just didn’t work for us.”

Mauer, who has roots in Minneapolis, said he still hopes to open a store here. “We will continue to look for another site. It would be a great spot for us to be, and we could provide a valuable service. There’s so much building going on, so it’s certainly a possibility.”

BKV Group officials referred questions to their Realtors, who would not comment on specific tenants or say whether they’re still considering a grocery store.

“Our goal is to provide a retail opportunity that is valued and appreciated by our future residents as well as our Marcy-Holmes neighbors,” said an email from Scott Barton, vice president of real estate acquisitions at EdR, a collegiate housing developer in Memphis. “Unfortunately, we are unable to confirm or deny any specific entity or use with which we may or may not be negotiating. We hope to be able to comment more specifically soon regarding retail tenants at the Marshall.”

Doran will go to the Marcy-Holmes Land-Use Committee at 5:30 p.m. on January 14 at the University Lutheran Church of Hope, 601 13th Ave. S.E., with his request for a demolition permit to tear down his buildings on Fourth Street.

In September 2013, he proposed a mixed-use apartment building on the site instead. At that meeting, he said he had warned that approving the Opus development would open a “Pandora’s box” of development in Dinkytown.

After his presentation, committee member and architect Larry Prinds asked, “Did you say you came out of Pandora’s Box?”

“I did,” Doran replied.

Coverage of issues and events that affect Central Corridor neighborhoods and communities is funded in part by a grant from Central Corridor Funders Collaborative.