Kraus-Anderson moves into new headquarters in Minneapolis

From his new corner cubicle, Al Gerhardt, president of Kraus-Anderson Construction, has a bird's-eye view of his company's latest work.

With a turn of his chair, Gerhardt can review the progress on the roof of the nearby brewpub, a hotel and an apartment complex — all of which are rounding out the block it has long owned on downtown Minneapolis' east side.

The company just completed a new five-story headquarters on the block. On Friday, the last of about 270 workers moved into the new building, which brings together people from its previous office on that site and those from offices in Circle Pines and Bloomington.

"Downtown Minneapolis is the center of commerce for us," Gerhardt said in an interview. "There would have been a lot of other choices that maybe would have been more economical for us to locate, but there is a certain amount of presence and image that goes along with having your own facility in downtown Minneapolis."

The new building is its third headquarters at 8th Street and 5th Avenue. Founded in 1897, Kraus-Anderson, or KA, is one of the largest construction firms in the region and has a record of prominent work. In 1902, it built the ornate building on Nicollet and 7th for Goodfellow Dry Goods Co., which not long after took the name Dayton's. That building, and two others later added to it, is now under a $250 million redevelopment. KA also worked on the Miracle Mile Shopping Center in St. Louis Park, and ­headquarters for ­Control Data in Bloomington and Cargill in Minnetonka.

In remaking its own headquarters, KA is transforming a block that previously had its old two-story office building and surface parking lots. In addition to its bigger office, it is building a 17-story, 307-unit apartment complex called HQ; an eight-story, 165-unit hotel called Elliot Park Hotel and part of the Marriott Autograph Collection; and a microbrewery called Finnegan's. The apartment complex and brewery are to be finished in the spring, with the hotel done by next fall.

KA's original plan was ­simply for a new office building, but city officials prodded it to develop the entire block at once.

"We would like to think that this development that we did here will be a catalyst for other development in Elliot Park, East Town neighborhood," Gerhardt said. "We're bullish on this side of town. We've been here a long time."

The development seems to have the enthusiastic approval of neighborhood advocates.

"The neighbors including myself are really excited about the variety of uses," said Jerry Dustrud, an Elliot Park resident and member of the board of directors of community group Elliot Park Neighborhood, Inc.

He said residents are especially anticipating the brewery and the hotel, which also will have a restaurant.

Dan Collison, executive director of the East Town Business Partnership, applauded KA for being receptive to feedback.

"It's an example of how a private investment is paying attention to public planning and city process and being a sterling example of how you can do this deep, dense urban development in a way that's paying attention to everything," Collison said.

One of the biggest challenges to KA and other construction companies' success has been the war for talent, which is why the new modern headquarters space is so important, Gerhardt said.

The new headquarters expands the current downtown staff and allows for future growth. The new office provides such modern features as collaborative spaces on each floor, a "KAFE" for employees to eat together, "bid rooms" that turn into war rooms for staff to work on bids, and expanded meeting and training space. Instead of separate offices, most of the staff is stationed at open ­cubicles. KA currently employs about 800 workers including seasonal employees, the largest the staff has been, Gerhardt said.

Some of its most recent projects have been the T3 mass timber building in the North Loop, the new headquarters and practice facility for the Minnesota Vikings in Eagan, and the Ironclad mixed-use development in downtown Minneapolis.

For contracts awarded over the last two years, KA has seen a 30 percent average annual growth in sales. Construction management work continues to be a large part of its business with $1.3 billion in sales last year.

Gerhardt, who was promoted to president last month and continues to serve as chief operating officer, has a goal to have the company grow 10 to 15 percent in revenue each year.

Nicole Norfleet • 612-673-4495

Twitter: @nicolenorfleet