Mpls Caf/ restaurateur would occupy Pantages Theater site; how do taxpayers fare?
Hennepin Avenue's Pantages Theater will be paired with an upscale fine-dining restaurant and a high-energy Latin nightclub under a new redevelopment proposal.
Local restaurateur David Fhima and a group of developers led by Tony Barranco, Tony Straus and Todd Schachtman have sold their idea to city officials who had been looking for takers for the city-owned Stimson Building, which wraps around the newly renovated Pantages at North 7th Street & Hennepin Avenue South.
The partnership has agreed to buy the building for $2.8 million, said George Kissinger, a senior project coordinator for the city's Community Planning and Economic Development department (CPED).
A City Council committee will review the proposal Aug. 24.
Last year, the city spurned a reported $2.5 million proposal from Block E developer Dan McCaffery. City officials said that offer was too low, and a Downtown neighborhood group criticized the tenants as too chain-oriented.
Barranco promises something different.
"What's been proposed is a very unique, iconic, one-of-a-kind restaurant experience that is going to leverage the synergies of Pantages in a common entrance. ... The corner is one of the intersections in the metro area."
The proposal calls for a 6,300-square-foot restaurant in the main floor with "dramatic views" of Hennepin, a 2,100-square-foot mezzanine level and a nightclub in the basement, Barranco said.
Fhima, owner and executive chef of Mpls Caf/, 1110 Hennepin Ave. S., recently opened the French restaurant Louis XIII in Edina's Southdale Shopping Center and has Fhima's, a popular St. Paul restaurant. The Moroccan-French restaurateur has an eclectic palette; his restaurants have Spanish, French, Moroccan and Asian influences.
Fhima said the Mpls Caf/'s fate is uncertain. He expects to decide within a month whether to keep the 12-year-old restaurant open and do extensive remodeling, or move it into the Stimson building.
The restaurateur described his unnamed restaurant as a "truly authentic" Mediterranean tapas bar that will be similar to places in New York and Chicago where patrons sit around a huge bar and pick a sampling fare from display windows.
"I think the project is going to be an incredible project. I think we are looking at being one of the premiere restaurants in Downtown Minneapolis," Fhima said.
Construction is expected to start in November with a grand opening planned late spring or early summer 2005.
The plan is the latest redevelopment along the Hennepin Avenue Entertainment District.
A new nightclub, Barfly, recently opened in the old Skyway Theatre, 711 Hennepin Ave. S. The Chambers, a luxury "boutique" hotel, and La Belle Vie, a gourmet restaurant, are slated to fill the old Fairmont Hotel, 9 S. 9th St., by next spring.
Developer Jim Graves, who did Block E's Le Meridien Hotel, has also floated the idea of a 50-story high-end luxury condo tower across Hennepin from the Pantages.
The Historic Theater Group manages the Pantages, an ornate 990-seat vaudeville theater built in 1916 and reopened in 2002. The city paid $11 million to renovate the theater and the Stimson Building, an 18,000-square-foot wrap-around space.
How will taxpayers fare if the Fhima group deal goes through?
The city borrowed $6 million to cover the Stimson's costs. Kissinger estimated that debt would drop to $1.7 million, after the city applies the $2.8 million sale price, plus unspent loan funds.
The city would repay the balance over 17 years with rent from a city-owned billboard atop the Pantages, Kissinger said.
The billboard earns the city $90,000 a year, or 50 percent of rental fees, whichever is greater, in a deal with Clear Channel Communications, Inc.
The $90,000 minimum wouldn't cover the new loan payments -- taxpayers would have to cover the difference. However, Kissinger said Clear Channel forecasts that rent-sharing will exceed the $90,000 guarantee, "meaning [the city] could break even or even come out ahead" after loan payments.
Kissinger said the city received three proposals for other restaurants in 2003, but he said they didn't pass muster.
"Some were speculative -- some the money wasn't right," he said.
Earlier, Block E's developer, Chicago-based McCaffery Interests, pitched a plan for a high-end restaurant on the first floor and live/work studios on the second floor.
The Downtown Minneapolis Neighborhood Association (DMNA), however, voted down the proposal, raising concerns McCaffery would put a chain restaurant in Pantages. Block E has several national chains, including Applebee's, GameWorks, Hard Rock Caf/, among others.
Tom Hoch, head of the Historic Theater Group, which also manages the Hennepin Avenue Theater District's State, Orpheum and Hennepin Stages theaters, said he's pleased with the proposal.
"It's great to see this space filled by a home-grown restaurant that will be operated by someone who understands and is actively involved in the Hennepin Theater District," Hoch said.
Hoch is also president of DMNA, whose Land Use Committee endorsed the Fhima group proposal Aug. 3.
Kissinger called the development team led by Barranco and Fhima a group with a solid track record. The partnership is behind the commercial development at 501 Washington Ave. S., which includes the new Rainbow Rooster Diner, a Subway shop, a Planet Beach tanning salon and a Caribou Coffee.
The area's City Councilmember Lisa Goodman (7th Ward) praised the proposal.
"I am delighted with the Barranco/Fhima proposal as it will bring yet another unique, independent restaurant to Downtown and really liven up an important corner in the Theatre District," said Goodman, who had also criticized McCaffery's plan.
"David Fhima has proven to be one of the most creative people in the hospitality industry in our community, and I have confidence that the sale of the Stimson Building will be placing the building into the hands of a team that is committed to the continued redevelopment of Downtown."