Twin Cities developer Bob Lux has signed a purchase agreement to buy most of Block E and plans to close on the property by late summer. Current Block E owners Union Labor Life Insurance Co. (ULLICO) confirmed the deal yesterday.
The agreement includes 213,000 square feet of space on three levels plus 550 underground parking spaces. The Graves 601 Hotel Wyndham Grand, which is owned separately, is not part of the deal.
In a prepared statement, Lux said, “With the opening of Target Field, there is significant excitement on Hennepin Avenue, and Block E is at the center of it. We intend to significantly invest in Block E to attract tenants that complement the neighborhood’s new energy.”
Sources have suggested that Lux is attempting to lure big-name local retailers to Block E, namely Richfield-based Best Buy and Edina-based Lunds. Lux has courted Lunds several times in the past, most recently to incorporate the grocer into development plans for the parking lot located on Hennepin Avenue between 10th and 11th Streets. He reportedly received a letter of intent from a Lunds store, but the project appears stalled.
Many see the ownership change as a positive step forward for Block E, which has suffered through a recent spat of misfortune, beginning with GameWorks’ sudden closure on March 29 and continuing just days later when Hooter’s filed for Chapter 11 bankruptcy. The former Borders bookstore has also been empty for over two years, leaving another high-profile vacancy in the complex.
Still, the nearby Twins stadium has stirred optimism for Block E, as has the complex’s newest tenant, Kieran’s Irish Pub, which has signed a 10-year lease for the former Bellanote space.
Lux’s involvement is also welcome news, as his Downtown track record is a successful one. He played a key role in developing the Carlyle, a luxury condo tower at 100 3rd Ave. S. The tower’s units are all currently filled, with the last available condo selling in late 2009. In addition, Lux was one of the principal developers of the Grant Park condo tower, at 500 E. Grant St., which many consider a kick-start to the condo boom in the early 2000s.
Lux also brings a hyper-local sensitivity to Block E, as his development company Alatus keeps offices in the Bancorp Center, at 8th St. S. and Nicollet Mall. ULLICO is based in Washington, D.C., and Block E is currently managed by Chicago-based McCaffrey Interests. It is not yet known if McCaffrey Interests will continue to manage the property. Spokesman Dan McCaffrey is traveling and could not be reached for comment.
Still, Lux is not immune to the still-tight credit market and the limping economy. His high-profile St. Paul project, an apartment-and-grocery-store development (also involving a Lunds store) called the Penfield, has been stalled, and the city of St. Paul is reportedly making plans to take over the project.
Lux did not respond to requests for comment.