Hennepin County Board approves purchase of landmark Thrivent Financial building for $55 million

The Hennepin County Board expanded its downtown Minneapolis footprint on Tuesday with the purchase of the Thrivent Financial building.

In addition to the $55 million Thrivent purchase, approved on a 5-2 vote, the board also approved an $11.5 million deal for 332 parking stalls at a nearby property that is slated for mixed-use development.

The 17-story dark pink building, at 625 4th Av. S. near the county's Government Center, is expected to be filled mostly by employees of the Family Justice Center and Hennepin County Medical Center (HCMC).

Commissioners Mike Opat and Jeff Johnson have vigorously opposed the deal and voted against the purchase. They argued the county didn't need more space and that it couldn't afford such a costly expenditure.

"I think this is a bad deal," said Opat. "It's a disservice that staff is putting this before us. It is a solution to a problem that doesn't exist."

But County Administrator David Hough said buying the building showed a long-term vision for county services and employees. The move would dramatically improve the county's ability to serve citizens more efficiently and consolidate several properties the county leases or owns, he said.

With the purchase of Thrivent, officials said, the county can shift about $25 million in planned capital projects to finance the deal. The parking stalls will also provide revenue to the county, they said.

A newly constructed building, Hough said, would have cost the county about $335 per square foot to build. The purchase price of the Thrivent building, plus renovation expenses, will be about $200 per square foot, he said.

"We are taking advantage of an opportunity," said Commissioner Peter McLaughlin. "This is a rationalization of the space we have. And owning land in downtown isn't a bad thing."

The last significant downtown building bought by Hennepin County was the 18-story 701 Building across the street from Thrivent, which it purchased in 2011 for $25.8 million.

The county recently sold the Century Plaza building for $9 million and plans to sell its Family Justice Center for about $5 million. The county also will drop leased space at the Grain Exchange Building, a mental health clinic at 1801 Nicollet Av. S. in Minneapolis, and some office space for community corrections officers.

Johnson said he understood how the Thrivent purchase might create some efficiencies and more of a downtown campus. However, he said, "We can't afford this. This is about raising people's property taxes."

Thrivent plans to build a new headquarters across the street that will include a skyway connecting to HCMC, another bonus for the county, said Hough. The company will pay the county $11 million in rent while its headquarters is built in the next 2½ years.

To get a better handle on the county's space needs in the future, Commissioner Marion Greene suggested that a use plan be developed in the period that Thrivent leases the building back from the county.

Board Chairwoman Jan Callison, like several of the other commissioners, admitted that approving the deal was difficult. But she said the board "had a ton of information" on the issue, and she was convinced it was a fair price for a large, unique downtown building.

"You don't want to be in a crisis mode when you made these kind of decisions," she said.

Opat said that buying the building was not as high a priority as covering rising employee health care costs, jail needs and road improvements. "It's a sad day," he said.

David Chanen • 612-673-4465