Sale of former MPS headquarters delayed due to title issues

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March 18, 2014
By: Ben Johnson
The 807 Broadway building now lies vacant
Ben Johnson
Ben Johnson
Negotiation over easement rights that could limit parking at future development has prevented final sale of 807 Broadway building

LOGAN PARK – The sale of the former Minneapolis Public Schools (MPS) headquarters has been delayed due to unresolved issues with the property’s title and deferred maintenance the buyer wants addressed before closing.

Last May the School Board picked Hillcrest Development over six other finalists vying to redevelop the 5.8-acre site at 807 Broadway St. NE. A purchase agreement was ready in September, but closing the deal hit a snag when Hillcrest identified problems with the property’s title along Jackson and Quincy Street.

Both streets are very narrow and the city of Minneapolis currently holds the right to expand them to bring them up to code. If the city ever decided to do so, it could significantly reduce the number of parking spaces at any new development, as well as other businesses along those streets.

“This isn’t about two stalls, it could impact dozens of stalls, and we absolutely have to be parking self-sufficient,” said Scott Tankenoff, managing partner of Hillcrest. Tankenoff noted that parking is already a major concern in a neighborhood that has a number of popular event spaces, tap rooms and churches.

Hillcrest initially hoped to begin pollution cleanup work on the property in early 2014 and have some spaces available for rent by this summer, but MPS says the extended negotiation has been nothing out of the ordinary.

“We’re still within the typical time period for closing a larger property, especially one that we’ve had in our custody for years,” said MPS Chief Administrative Officer Mark Bollinger.

MPS Assistant General Counsel Amy Moore, who has been negotiating with Hillcrest over the title issues, says she is optimistic an agreement will be reached.

“There’s lots of different variables right now and I don’t know what the end result will be, but there’s a lot of smart people at the table and the city has been very open,” she said. “It’s just that the city has to look at setting a precedent in one area that might adversely impact another area of the city.”

Tankenoff also said that his staff has identified some deferred maintenance that needs to be addressed before they can begin renovations.

“It’s surmountable, I don’t think it will take huge dollars to fix, but there is work to do to get it up to the point where I’m comfortable moving in,” he said.

Moore and Bollinger most recently met with Hillcrest on March 7 after the parties exchanged emails, but didn’t meet at all in-person during the winter.

MPS has owned 807 Broadway since 1930 and still had about 100 employees working there until mid-February. It spends an average of $25,000 per month on heat, water and electricity for the building.

While the negotiation runs its course neighbors are getting anxious to see redevelopment begin.

“We want stuff to happen, an empty building is not in anyone’s interest,” said Pat Vogel, co-chair of the 807 Broadway Task Force, a grassroots neighborhood group that has closely monitored the 807 Broadway redevelopment effort. “We understood in the fall that these things take time, but now everyone needs to focus and deal with this.”

Ben Johnson // 612-436-5088 // bjohnson@mnpubs.com // @johnsonbend