Miller Bag building to become commercial space

Its days as a factory for lawn mower bags and burlap potato sacks behind it, the brick-and-timber Miller Bag Building in Minneapolis is headed for its next life as renovated office space.

Owner Mike Miller, whose family founded the Sam Miller Bag Co. 97 years ago, has teamed with the Ackerberg Group on an $8 million effort to renovate the four-story, 32,000-square-foot building at 861 E. Hennepin Av. Also, three other buildings behind it would be demolished and replaced by an 11,160-square-foot office-warehouse facility, aimed at tenants seeking modern commercial space close to downtown but without the high rents and parking hassles that are common in areas such as the North Loop.

"Our plan is to take the best of what's already there and marry the old with the new," Miller said. "We're pretty excited about the opportunity to breathe new life into an old facility that we've been in since 1948."

Miller's grandfather founded the Sam Miller Bag Co. in 1918 in north Minneapolis, and it was housed in several locations before coming to the Hennepin Avenue building in the 1940s, where it produced potato sacks, seed bags and feed bags for the agricultural market, later adding a production line for bags for Toro lawn mowers.

In 1999, it merged with Susan Shields' Bags and Baggage/Coverdown Co. to form Airtex Design Group, and now concentrates on producing high-end home textiles such as bedding, window treatments and pillows for retailers such as Restoration Hardware, Pottery Barn and Crate and Barrel.

It also continues to make specialty cases and bags for the medical, industrial and education markets.

The company decided in August leave the old complex for modern production facilities at 1620 NE. Broadway.

"We've been an ongoing concern for nearly 100 years in the cut-and-sew business, but we're not making feed bags anymore," Miller said. "The lawn mower companies sent their bag-making work overseas and to Mexico, so we had to reassess our manufacturing options."

The move has left the old building about 80 percent vacant, prompting the redevelopment plans. To make them work, one of its key elements is replacing three smaller buildings on the lot with a structure that would include nearly 8,500 square feet of high-bay, multiuse warehouse space.

Ackerberg's Josh Floring said the project is unique because it would combine elements of historic renovation — which could attract a restaurant or brewpub in an area that's brimming with them — with construction for light industrial use.

One possibility discussed for the older building is a start-up business incubator, while the new structure could be a "build-to-suit" for one or more tenants, with more the 100 potential parking stalls available on the 1.3-acre site.

"We don't have an anchor tenant yet, but we've got a couple of relationships we're working on, which we're trying to nail down," Floring said. "Once we do, hopefully within a few months, we'll probably move forward with the redevelopment."

In the meantime, the Miller-Ackerberg team has applied for $275,000 in state, Hennepin County and Metropolitan Council brownfield grants to remediate the soil at the site and for hazardous material abatement in the 111-year-old building. Should they sign up anchor tenants, the proposal would have to go through the city site plan review process. Planning officials have already indicated they feel it would be an "appropriate use" for a spot deemed to be a "transitional industrial area" along a major transportation corridor.

Don Jacobson is a freelance writer in St. Paul and former editor of the Minnesota Real Estate Journal. He has covered Twin Cities commercial real estate for about 10 years.