Dominium Plans $80M Rescue of “Endangered” Minneapolis Property
- Jun 23, 2011
Minneapolis–The National Trust for Historic Preservation recently released its “America’s 11 Most Endangered Historic Places” list for 2011, and the Pillsbury A-Mill section of Dominium’s Pillsbury Lofts adaptive-reuse project in Minneapolis is on it. But the century-old complex, home to the Pillsbury Co. for more than 100 years until 2003, will be protected from sinking into oblivion by multifamily developer Dominium, which plans an approximately $80 million transformation of the Pillsbury site into a 240-unit affordable housing complex.
Endangered? Yes. Failure to rehabilitate the multi-structure complex would mean the loss of a most vital part of the history of the city of Minneapolis. The Pillsbury Lofts redevelopment endeavor will result in the creation of much-needed affordable housing residences in the structures known as South Mill Complex, Warehouse No. 1, the Wash House, the Red Tile Building and A-Mill, which is the most iconic of the structures. “The A-Mill building was once home to the largest mill in the world,” Owen Metz, senior development associate with Dominium, tells MHN. Pillsbury first began churning out bread and biscuits and the like when the A-Mill building, the first structure in what would become a production compound over the years, opened in 1881. At the time, it was a state-of-the-art facility that, as the National Trust describes, “set a new standard in both production and design.”
Dominium is well aware of A-Mill’s historical prominence, which is taken into consideration in the developer’s plans. “It has a very industrial, economic significance to the area,” Metz notes. “It is very important to the history of Minneapolis.”
It is that very importance, the vital history of the site along the east bank of the Mississippi River, that prompted the Minneapolis Department of Community Planning & Economic Development to nominate A-Mill for the endangered list last winter. It was during that time that fear set in about the complex’s future as a result of it being foreclosed upon by BNC Bank, lender to the previous owner and developer, Schafer Richardson Inc.
Now, it’s Dominium to the rescue. “These are cool structures, they have a great presence,” he says. “It’s going to be a great opportunity for people. There are not a lot of artist live-work affordable housing properties in Minnesota; this will be the first of its scale.”
While the credit market has begun to warm up to the multifamily sector, securing financing for projects remains a challenge for developers. However, the nature of the A-Mill project will go a long way in addressing funding issues. “We can leverage affordable housing credits and historic preservation tax credits. It would be harder if we did it as market-rate apartments. That’s the driving force behind being able to complete the project; the equity generated by credits makes the project feasible. But it’s very complex and complicated to redevelop and save the buildings. It’s going to require flexible and creative financing, so our partnership with the city is going to be extremely important to make sure the development is successful.”
BKV group is on board as architect for the adaptive-reuse endeavor, but design particulars for the A-Mill building and the handful of additional structures that will comprise the Pillsbury Lofts complex have not yet been written in stone. “This is such a high-profile site so a lot of eyes are on it,” he explains. “We want to be sensitive to the neighborhood but we don’t want a huge taskforce determining the specifics. We’re fairly limited in terms of design by the Secretary of Interior’s Standards for Treatment of Historic Properties guidelines.”
The remaining buildings at the mill property that will not be part of Dominium’s project will have to adhere to the same guidelines. The grain elevators facility will not be converted, but will remain as is and unused given the elevators’ historical significance. Dominium plans to sell the remaining structure, the machine shop, for commercial mixed-use redevelopment.
Before work can get underway on any facet of the plans, Dominium must complete the acquisition of the mill property from BNC Bank. The company anticipates closing the transaction in the first quarter of 2012 and commencing construction soon after.
Pillsbury will be a momentous project even beyond the historical symbolism. “This is an opportunity to bring vitality to the neighborhood,” Metz says. “There is other developable land in the area, so we hope our project will be a stepping stone.”