In a time when high demand for apartments has skewed new development in Minneapolis toward residential high-rises, Peter Remes and his company, First & First, have been making waves as a newcomer in the slowly recovering Twin Cities commercial development market.
Remes (pronounced rem-ish) founded First & First in 2010, and since then he has undertaken several high-profile commercial projects in the Twin Cities. In all, First and First owns 10 properties in the Twin Cities, most of which are adaptive reuse developments involving the renovation of old industrial sites.
He’s established a reputation for creatively rehabilitating old rundown buildings to attract small creative, design and tech companies. He has also earned a lot of local support for his commitment to providing public, pedestrian-friendly parks at his developments.
“The idea is to give people a place to sit and relax and have a conversation and a cup of coffee in an urban outdoor setting,” said Remes. “The Twin Cities doesn’t have enough spaces where you don’t have to pay an admission fee, you don’t have to buy a ticket, you can just participate and hang out and enjoy each others’ company. That’s a very valuable thing.”
The Ice House Plaza on Eat Street is one of those places. The 7,000-square-foot space features a small lawn containing a sculpture by renowned artist Zoran Mojsilov and many spots for people to relax. It opened on May 18, 2012 as a complement to Remes’s Ice House Court development on 26th & Nicollet, which includes Vertical Endeavors and several restaurants. Remes decided to demolish a building on the property he acquired to create the public park.
He hopes to complete construction on a similar urban park by mid-summer at The Broadway, a 60,000-square-foot former mattress factory in Northeast, which houses 612Brew and will soon be home to Spyhouse Coffee, an office furniture company and several digital design firms. That park will include an amphitheater, a fountain, sculptures, native plants and boulders salvaged from the old Metropolitan building, which have been languishing at a gravel pit in Delano since the Metropolitan’s demolition in 1961.
“We looked at sites all over Minneapolis but in the end Peter’s vision for the building – the outdoor amphitheater, the courtyard, the artwork and all of that green space ended up being a huge factor,” said Robert Kasak, one of the founders of 612Brew.
“It’s awesome. There’s nothing like this in the Minneapolis, that I know of,” added Adit Kalra, another partner at 612Brew.
Although Remes has been hailed by many for his progressive development model, questions remain regarding the long-term economic viability of his projects. There has been a virtual renaissance of urban adaptive reuse projects in Northeast lately — The Broadway, the Casket Arts building, the Solar Arts building, and the Van Buren building have all been renovated in the last decade. But for better or worse, they appeal to smaller companies that don’t offer the long-term stability of housing or larger corporate tenants.
“If you’re building on a green field you can pretty much create what you want for the user, for the market, whereas in an urban adaptive reuse situation you’re saddled with a lot of obstacles that may make it more difficult to obtain the necessary cash flow to make the project viable in the long-term,” said Tom Musil, a professor at the Shenehon Center for Real Estate at the University of St. Thomas. “It’s a tough market out there right now for office space, and if [Remes’s] projects are successful in the long run I take my hat off to the guy.”
Remes acknowledges that urban adaptive reuse projects are more difficult than a traditional suburban commercial development, but so far he has had little problem filling his properties. The Van Buren building was his first adaptive reuse project and that is near capacity with 12 tenants occupying the former factory. His Ice House Court development is full, and The Broadway has over half of its space rented out, despite the fact that renovations are still ongoing, according to Melissa Gorman, a project manager with First and First.
Remes has been an entrepreneur for most of his life. He grew up in St. Paul’s Highland Park neighborhood, working at his dad’s corner drug store and delivering the Pioneer Press as a child. He attended the University of Minnesota Duluth for two years before transferring to the Twin Cities campus for his last two years.
He started his first company, Midwest Outdoor Advertising, in 1983 while he was still attending the University of Minnesota. He ran that company for 16 years before selling it in July of 1999, and then he bought, consolidated, and sold another group of advertising companies in the years following.
The 807 Broadway building is Remes’s latest target. The former Minneapolis Public Schools (MPS) headquarters sits a block away from The Broadway, and First and First is one of seven developers who submitted bids for the property.
Neighborhood residents are vehemently opposed to residential development at the site, so First & First’s usual small business friendly, tech and design centered proposal — complete with a public plaza much larger than the Ice House Plaza — was one of the favorite proposals of the 807 Broadway Task Force, which was formed to ensure the Logan Park community had a voice in choosing a developer for the site.
All seven developers have been invited to present their proposals to the community on March 20 at 7 p.m. at the Logan Park Community Center. Remes says that his renovation of the Van Buren building brought 200 jobs to Northeast, he expects 500-700 jobs to be created when The Broadway is fully occupied and even more than that to be created if his bid is chosen for the 807 Broadway site.
Despite those rosy projections, residential proposals by well-respected, established developers like Dominium and Sherman Associates are sure to offer much more cash to MPS, which just moved into its new $41.7 million headquarters in north Minneapolis.
“It’s a David versus Goliath situation, no question about it, and my guess is that housing will have to be at least some part of that site,” said Musil. “But the trajectory [Remes] is on is good … overall he has a favorable reputation so far.”