Fate of Century Plaza Shifts from Hotel to Office

Fate of Century Plaza Shifts from Hotel to Office

Century Plaza Sale Approval ExpectedThe massive building constructed by the WPA at the edge of downtown Minneapolis that began life in 1932 as Miller Vocational High School is likely to be reborn as offices, according to those in the know. Once slated for the wrecking ball, the building known as Century Plaza was occupied most recently by Hennepin County Human Services. That department completed its move to new quarters in early May, after decades at the same address.

Sale Approval Expected

Century Plaza's fate was sealed on June 6, as the county is expected to give final approval for sale of the property to DEHL Properties LLC. The sale price of $9.4 million for the three-acre property comes with a proposal to renovate the building as market-ready offices and "flexible space," and proceeds are expected to be added to the Hennepin Country Human Services Fund. 

Four separate proposals and one letter of interest were presented. The DEHL proposal won out over competitors and received committee recommendation early in May. County documents had previously cited the "high cost of redevelopment," hence the decision to sell rather than refurbish. Its proximity to the Convention Center and its history as a Minneapolis landmark apparently were enticing to local developers.

The building's architecture is Art Deco, in the Streamlined Moderne style; in the 1940s, it was known as a progressive modern vocational school and offered classes in nursing, typesetting and dressmaking as part of its curriculum, training as many as 2,300 students in its various programs each school year. The school closed in 1976.

Despite its interesting past, however, a consultant concluded that the building is ineligible for inclusion on the National Register of Historic Places because of alterations made three and a half decades ago. When Hillcrest Development bought the building in 1980, it converted classrooms to offices, removed original recessed windows and made way for retail space. A parking ramp took the place of the school's auditorium in the mid-1980s. The county subsequently acquired the building in 1996, with an ultimate employee count of approximately 600 at the site.

The Best Use

At one time, Hennepin County held a vision of a 1,000-room hotel on the site. The idea returned again and again, but those plans never saw the light of day, despite a county expenditure of $48,000 for a feasibility study in 2012, and the continuing belief that a "mega hotel" represented the "highest and best use" for the property adjacent to the Convention Center.

In November 2016, an article in The Journal noted that 2,400 new hotel rooms were being tracked in various stages of development, one reason perhaps that the county was so quick to act on a proposal that would flow cash to the coffers and offer an alternative plan for Century Plaza. 

At least two other bidders proposed converting the building into residential units, generally deemed to be a higher-cost renovation than office conversion. Details of the DEHL proposal have not yet been made public, however, so there is still some question about the "flex" space part of the proposal. Many building conversions underway in the Twin Cities include a mix of office, retail and living space. Whether or not this might be a possibility for Century Plaza remains to be seen. 

Minneapolis-based DEHL Properties, LLC also closed on riverfront property in Milwaukee, Wisconsin, in February of this year. The paved lot sold for $5.6 million and is reported to be a potential site for a high-rise hotel or a mixed-use multi-family and office tower.

Downtown Trends

Downtown Minneapolis development trends have increasingly been moving towards office space and apartment and condominium development. High demand for housing and the vibrant urban lifestyle that the city offers have spurred a growth cycle that shows no signs of slowing. However, the recent closing of the iconic Macy's at Nicollet Mall and takeovers of other existing space to provide new offices points to health of the downtown business core. While new office towers are not on the drawing boards at present, even when existing structures are demolished, the conversion of existing square footage into modern offices is "big business." 

The building itself contains approximately 500,000 square feet and is located across the street from the Convention Center that not too long ago was treated to its own renovation in order to boost bookings and enhance the experience for event sponsors, exhibitors and attendees. While hotel space across the street may once have been advantageous, downtown Minneapolis is considered compact and quite walkable, and the city enjoys good public transportation facilities. 

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