Eclectic lofts face surge in North Loop

The building served as a makeshift home for the artists who brought about the North Loop's 1980s renaissance. Minneapolis alternative rockers the Replacements played a party there that still lives on in a 1982 album. Now the Harmony Lofts' eclectic residents could soon be gone, forced out by soaring rents in a resurgent part of the city.

Residents recently got word that rents will nearly double over the next year, rising from $700 to $1,300 in one case, as part of a planned renovation. The landlord is installing granite countertops, new cabinetry and remodeling the exterior of the building, located just outside the North Loop's official boundaries on 3rd Street and 2nd Avenue N.

Tenants met on the stoop last week to commiserate, eyeing their options for taking a stand against the neighborhood transformation that has brought in waves of wealthy professionals seeking an urban lifestyle.

"Work with us. Have a heart," said Laura Preston, a resident who works at Fulton Brewery. "Do you understand that you're displacing 25, 30 people that live and breathe and love this neighborhood and this building?"

Jamie Heilicher, president of the building's property management firm Advance Realty Inc., said the building has not been rehabbed since his family bought it in 1989. Even at the new rates, he said, they will be charging between $1.25 and $1.40 a square foot. Market rates, he said, are upward of $2.

"We're not gouging. That is not our intent," Heilicher said. "Our intent is to put the building back into condition that isn't going to fall down. We've got bricks falling off the building." He added that the building is structurally sound.

The new, pricier units will fit into a rapidly evolving rental and residential landscape that once housed gritty warehouses, factories and a rail yard. The 109-year-old building remains one of the last islands of cheap rents amid the new high-end apartments and condominiums that have flooded the area.

About 1,263 apartment units have sprung up in the North Loop since 2011, in addition to 1,714 condominiums, said Mary Bujold of Maxfield Research. Average rents are about $2 per square foot.

"I feel really bad for them," Bujold said. "But … the world is changing very quickly over there."

The steep rent increase came as a shock to the building's current tenants, a close-knit creative group including musicians, painters, DJs and videographers. Some have lived there for nearly two decades and aren't sure yet what they'll do.

"It's hard to see your community break apart like that," said Zach Schaap, a designer at the Olson ad agency. "I literally consider all of my neighbors … extended family."

The building's exposed brick walls and high ceilings were originally home to Tibbs, Hutchings and Co., a dry goods wholesaler, in the early 20th century. Later named after an engineering firm, the Harmony Building became one of several fixtures in the 1980s resurgence of the area as a creative hotbed. When painter Don Holzschuh moved in during the early 1980s, the bottom three floors were still reserved for manufacturing purposes.

Holzschuh recalls paying $600 a month with two roommates for the entire fifth floor, about 10,000 square feet. Short on rent one month, they charged $3 admission to a kegger featuring the Replacements.

"I said … we're going to have a kegger and raise some money for rent," Holzschuh said. "Do you want to play? And [the Replacements] said 'Yeah.' "

Posters advertised the "art studio RENT PARTY" with a photo of feared Soviet ruler Josef Stalin and a drawing of a woman.

The elevator didn't work, so they lugged the kegs up five flights of stairs. "The place was packed," Holzschuh said.

Several hundred people were partying with the Replacements when the Minneapolis police arrived. "The party is over with," an officer announced in a recorded moment that would later kick off the band's album "Stink." "Grab your stuff and go, then nobody goes to jail."

The North Loop was then a haven for visual artists, whose other studios included the so-called "WeWa" building that would later become Sex World. The now-defunct New French Bar was the local watering hole for many of them.

"It was incredible," Holzschuh said. "All those buildings had artists down on 3rd Street. There must have been like 200 artists that lived around there in various buildings."

Most of that vibe had disappeared by the mid-1990s and some eventually moved to Northeast, said Kelley Lindquist, whose organization Artspace later bought the Traffic Zone building on 3rd Avenue for artist workspace. "There was an incredible, inspiring world in the North Loop those days," he said.

Schaap's unit on the fourth floor has its own, more morbid history.

It was where Andrew Cunanan began a five-victim killing spree in 1997 by bludgeoning friend Jeffrey Trail with a hammer. He eventually killed fashion designer Gianni Versace in Miami before committing suicide. The former landlord later held a "raise the spirits" party in the unit where the spree began to help the building's residents recover.

Heilicher said they plan to bring the building's exterior back to its historic state, and possibly rename the property Tibbs Factory Apartments.

"There's going to be a lot of work being done to the building and that's why rents are going up," Heilicher said.

Some residents said the steep increase is not warranted and that comparing the rents to other buildings in the North Loop is unfair because their property lacks amenities. The building lacks the rooftop patios, pool and gym found at some other locations. It also lacks central air conditioning and parking.

They also say they have to put up with a lot going on outside. The building is close enough to the 1st Avenue club scene that gunfights occasionally spill onto the streets below, where bouncers from an adjacent strip club keep lookout. After one such incident, Schaap said, police entered one resident's unit to remove a bullet from the wall.

Crashes are also a common occurrence at the intersection out front, where cars leaving downtown race to the Interstate 94 on a ramp running parallel with the building's walls. One of the crashes occurred while a reporter was visiting recently.

But there remains a palpable sense that the building's days as an affordable haven for artists and creative types could soon be drawing to a close.

"My reaction was, darn it, does that have to go too?" Lindquist said. "I understand it, but I'm very sad to hear it."

Eric Roper • 612-673-1732

Twitter: @StribRoper