The Soap Factory, an alternative arts space in Minneapolis, will see its 130-year-old building go up for auction in a sheriff's sale Tuesday in an attempt to repay approximately $2.5 million in debt.
In face of $2.5 million debt, Soap Factory's Minneapolis home to be sold in sheriff's sale
Minneapolis art center hopes refinancing will allow it to regain ownership of the building.
December 14, 2018 at 4:09PM
The nonprofit organization still hopes to retain ownership of the building, a hub for experimental artists that has been on hiatus for the better part of three years.
The sale is at the request of RJM Construction, a Golden Valley-based firm that was renovating the former industrial space at 514 SE. 2nd St.
When planning began two years ago, an investor in a restaurant envisioned as part of the project loaned $1 million to the Soap Factory. The investor asked for the money back, and RJM stepped in to assume that debt and another $1.5 million in renovation costs, according to the Soap's board chairman, Roy Close.
Meantime, construction has halted.
"The last three years have been very difficult for us financially," Close said in a statement. "We have not been able to secure the financing we need to pay RJM for the work it has already done and to complete the project. RJM has been more than patient, and we are grateful, but it cannot wait any longer."
RJM marketing director Mindy Bohumolski said the company is "working in cooperation with the Soap Factory, and we are hopeful that they will be able to provide financing."
The sheriff's sale doesn't mean the Soap Factory will lose the building, "but now the clock is ticking," said Close. It has six months to match the highest bid — which it expects to be in the $2 million to $3 million range — and reclaim title.
An unnamed bank is considering a mortgage request from the nonprofit, said Board Member Rosemary Williams.
The building's prime location near the downtown riverfront makes it ripe for redevelopment.
Another Minneapolis arts stalwart, Intermedia Arts, was forced to sell its building this fall after accumulating a significant deficit.
The Soap Factory stopped paying its employees last summer and has suspended all programming.
"We all have our eyes wide open, that this is not a sure thing after what we have been through," said Williams.
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