Madison Equities buys St. Paul's Alliance Bank Center, eyes more conversions nearby

Jim Crockarell, head of Madison Equities, has been busy. His company recently closed on the purchase of a St. Paul office tower, and Crockarell, one of the most prominent building owners in downtown St. Paul, is also working on converting several other office properties into apartments.

Madison Equities closed Thursday on the purchase of the 16-story Alliance Bank Center. The deal was worth $18.25 million. The building is located at 55 E. 5th Street and includes a 560-stall aboveground parking garage with a parking bridge that crosses Cedar Street.

All 200,000 square feet of the office space is leased with the building's major tenants being Alliance Bank and the Redpath and Co. accounting firm. The building includes 100,000 square feet of retail space with some smaller space available on the skyway level.

The building had been owned by real estate investors Jim Kelly and Dave Brooks, who bought the property for $8.2 million in 2014 and invested in it.

It was a fair price, Crockarell said, adding that the building is close to several other Madison Equities properties, which made the sale efficient from a management perspective.

Bryan Larson with Madison Equities represented both Crockarell and the sellers in the transaction.

Two blocks down, at the Degree of Honor Building on the corner of 4th and Cedar streets, construction is scheduled to begin next month to convert the approximately 100,000-square-foot office building into a 77-unit, market-rate apartment complex.

"It's really going to be the rebirth of a great building," Crockarell said.

Construction of the building was completed in 1961. It was the home of the Degree of Honor Protective Association, one of the largest fraternal benefit societies in the country at the time, which was run entirely by women. The building recently was registered on the National Register of Historic Places, and Madison Equities is receiving tax credits to help with the renovations, Crockarell said.

MP Johnson Construction is the lead contractor and Kaas Wilson Architects is designing the project.

The building will have an "ultra modern" interior design with amenities like a weight room, Crockarell said. Tenants will also be able to order food from the nearby InterContinental hotel.

The 10-story building has been empty since last year, when Madison Equities moved most of the tenants to its other office buildings in downtown, Crockarell said.

Crockarell expects renters to be able to move into the building in the spring of 2020.

At one of Madison Equities' other buildings, Park Square Court, which is located across 6th Street E. from Mears Park, Crockarell has canceled plans to convert empty office space into a 127-room boutique hotel. Instead, he plans to build 100 apartments from floors two to five, with furnished, extended-stay suites on the top floor.

Crockarell altered his plans because several other hotel projects were announced and there has been talk of a hotel as part of the development of the former West Publishing Co. and Ramsey County jail site.

Those discussions include a possible convention-center hotel, which is favored by some city tourism officials, and plans for a 185-room hotel on a nearby parking lot.

"All of the sudden, there's a lot of hotel units being built in downtown St. Paul," he said.

According to his company's data, residential leasing remains strong in downtown St. Paul, which can absorb 400 to 500 new residents a year, Crockarell said.

Madison Equities still plans to expand the Handsome Hog restaurant on the first floor as part of the Park Square Apartments project. Construction is expected to begin late spring.

Both the Park Square Apartments and the Degree of Honor renovations are expected to cost more than $20 million each.

Madison Equities also has plans to convert some of the offices in the First National Bank Building into 170 apartments. Construction for the project is expected to begin in the fall.

Nicole Norfleet • 612-673-4495 Twitter: @nicolenorfleet