The developer of the eight-story Reserve project is negotiating to restart construction without any presales, according to Magellan Development Group.
Brian Gordon, Magellan’s vice president of development, told the North Loop Neighborhood Association Jan. 24 that they have finally found a bank that might be willing to provide financing for the project. The parties have drawn up a term sheet that lays out the terms of the financing proposal, and they are negotiating a commitment letter. Magellan has spent the past year working to obtain financing.
Magellan plans to build about 131 units in an eight-story brick building with underground parking. The design has not changed from what was originally proposed for the site at the corner of 1st Street and 3rd Avenue, Gordon said.
“I wish we could say that we are getting ready to start, but it’s still up to the banks,” Gordon said. “It is a very soft market for condos in Minneapolis, especially one with a tainted past.”
Construction on the site began in January 2003. A lawsuit between Bejco Development Corp., the former developer, and lender Lehman Brothers ended construction in the summer of 2003 and Lehman took control of the property. Chicago-based Magellan Development Group took over the project in the summer of 2005, and Gordon said the city extended zoning approval for an additional year on Dec. 28.
“The problem now is the market is soft, and construction prices have gone through the roof,” he said.
Once financing is obtained, the developer will need to finalize site drawings and obtain necessary permits from the city. When construction begins, Gordon said, site work will continue for about 12 months.
“It won’t be big news until we have the loan,” Gordon said. “We’re just happy to get someone to say yes.”
North Loop Planning & Zoning Committee members said they are happy the project is moving forward. A neighbor to the development asked Gordon about management of the construction site, noting that fencing around the site needs constant repairs.
Gittleman Management Corp. is currently overseeing the site and repairing fencing.
In other North Loop development news, developers of the Pacific condo/hotel project said they are resubmitting plans that p comply with historic district guidelines.
The project on the 200 block of Washington Avenue consists of a hotel constructed in the Northwestern building, two condo towers on Washington Avenue and 2nd Avenue North, and the rehabilitation of the Lowry-Morrison building. The Zoning & Planning Committee decided in mid-January that proposed 18- and 28-story towers are too tall to stand in the Warehouse District, sending the developer back to the drawing board.
An 18-story condo building fronting Washington Avenue is now reduced to 10 levels. The proposal no longer includes a parking ramp over an alley, and three floors of underground parking below the L-shaped 10-story condo building will now accommodate parking for the hotel guests and residents, Minn said. The condo building no longer features a setback from the street on upper levels.
A new submittal to the Heritage Preservation Commission could take place as early as this week, Minn said. Plans for the Gehl-Dolphin building, originally the site of a proposed 28-story condo tower, are a bit more uncertain.