Mortenson eyes key parcel next to Surdyk's in northeast Minneapolis for mixed-use project

M.A. Mortenson is looking to develop a residential and retail project on a key parcel along East Hennepin Avenue in the heart of northeast Minneapolis' bustling commercial district, the developer confirmed Tuesday.

The developer is talking with the city of Minneapolis and the Nicollet Island-East Bank Neighborhood Association about a mixed-use development at 333 East Hennepin Av., said Bob Solfelt, vice president and general manager of Golden Valley-based Mortenson Development, in a ­statement.

The half-block site, located on 4th Street between 1st and Hennepin Avenues, is owned by U.S. Bank. Currently, a bank branch and customer surface parking lot occupy the ­majority of the site, and a Papa John's sits at the east corner. The current market value for the property is $1.3 million and $1 million for the land, according to Hennepin County tax records.

Surdyk's Liquor and Cheese Shop and West Photo fill the remainder of the block. The initial project plan — still being refined by Mortenson — does not include these two businesses.

Mortenson has met with city officials and representatives of the Nicollet Island-East Bank Neighborhood Association (NIEBNA) to work out any potential resistance or hurdles a project on the site may face.

"Every developable parcel in our neighborhood is going to have interest. We've talked to them and it's very preliminary, but I think they are thinking 250 units of housing in a 20- to 25-story building," said Victor Grambsch, NIEBNA president.

The neighborhood group is pro-density and supports a tower on the site, he said. The group's main concern is whether or not Mortenson plans to build aboveground parking and how that aesthetically affects the street.

"Our goal is to provide a thoughtfully designed, pedestrian and neighborhood-friendly development in this active, well-established corridor of the city, Solfelt said in a statement. "We look forward to providing more information as the project becomes more defined."

If Mortenson pitches a tower for the site, it would be the latest in a series of residential tower proposals in the neighborhood, including a 20-story building just across 1^st Avenue NE. on the former Superior Plating site by Miami-based Lennar Multifamily Communities. Minneapolis-based Alatus submitted a proposal to the city last year for a residential building up to 40 stories on the Washburn-McReavy Funeral Home site and Minneapolis-based Schafer Richardson hopes to build a 30-story mixed-use tower where Nye's Polonaise Room currently stands.

"Just because there are four proposals doesn't mean that four projects will be the result," said Jacob Frey, Minneapolis City Council member representing the neighborhood. "There are several hurdles."

Schafer Richardson has faced considerable resistance despite the neighborhood association's support for density. However, the majority of the pushback has come from Our Lady of Lourdes Catholic Church located next door over concerns that construction would cause significant damage to the 158-year-old historic structure.

The U.S. Bank site is farther from river, falling just outside the St. Anthony Falls Historic District.

"I think this is an excellent opportunity to transform a building that is extremely unfriendly for the pedestrian, enhance the public realm, and re-purpose an underutilized block all while retaining the character of the neighborhood… not to mention it's just an ugly building," Frey said. "I haven't seen any final plans, but at this point we are interested and hopeful."