United Properties says city conditions could put Gateway tower in jeopardy

A proposed tower that would include a luxury hotel, offices and condominiums on a high-profile downtown Minneapolis block could be in jeopardy because of several city-imposed design conditions, the developer has warned.

In a letter to city planning officials last week, two top executives of United Properties Development said the company could not proceed with the project as proposed without the reversal of a city decision to block a sign at the top of the tower for anchor tenant RBC Wealth Management as well as other key changes.

"The importance of each of these components has been known to city staff for over a year now, as we have shared progress designs long before submitting a final land use plan last fall," said the United Properties letter. "Our decision to appeal these conditions is, simply put, our only path forward for this project."

The appeal is scheduled to be discussed by the zoning and planning committee of the City Council on Thursday.

Minneapolis Mayor Jacob Frey said on Monday he supports United Properties' requests.

"It's a parcel that deserves to be highlighted with something more impressive than a surface parking lot," Frey said. "This project has been a long time coming, but we are on the precipice of finally getting it done."

United Properties wants to build what it has called its Gateway tower on a parking lot on the corner of Hennepin and Washington avenues where the former Nicollet Hotel once stood. After several delays and design changes, the project received preliminary city approval last November.

The building would include a Four Seasons hotel with about 280 rooms, more than 530,000 square feet of office space anchored by RBC and 22 condos. There would also be an underground parking garage for 455 vehicles.

However, in approving the project the planning commission included several conditions, including denying the RBC sign.

Earlier renderings of the Gateway tower showed the building with the yellow and blue RBC logo at the top. But city planners have said that signs for the development shouldn't be located higher than 50 feet above ground.

"The Minneapolis skyline does not have a proliferation of signage near the top of its tallest buildings," said Hilary Dvorak, principal city planner, during the Nov. 13 planning commission meeting.

She said approval of the sign, which would be more than 480 feet above the ground, could be "precedent setting."

According to plans reviewed by the city in November, the project would be one of the 10 tallest buildings in the city. United Properties has said the tower would have approximately 34 floors of habitable space in addition to a mechanical floor, though city staff has declared the building as 37 stories.

"The ability to brand our new building with a rooftop wall sign is critical to our company's future growth and success," wrote Michael Armstrong, chief executive of RBC Wealth Management-U.S., in a December letter.

Armstrong also said its lease agreement with United Properties is "specifically contingent upon approval of the requested wall sign."

Another key issue for the Gateway project is the fate of an entrance along Hennepin Avenue, called a porte cochere, that would allow vehicles to pull into the site and drop off guests. The planning commission approved the concept in November, but the city's public works staff has since denied it. United Properties officials said the feature is critical for the Four Seasons. Also unresolved is a proposed ramp to the underground parking garage.

United Properties has made design changes to comply with other city conditions, including added plaza space, a sidewalk and the relocation of an RBC bank branch.

United Properties' appeal includes letters of support from the Minneapolis Building and Construction Trades Council and the Minneapolis Downtown Council.

"For a project of this scope to be developed, it must attract financing," wrote Steve Cramer, president and chief executive of the Minneapolis Downtown Council. "To attract financing, the project must secure its tenants. And to secure its tenants, their business imperatives must be met. That's what is at issue. The Gateway can't advance otherwise."

The appeal needs to be reviewed by the zoning and planning committee of the City Council and the full City Council. The closing on the land sale is anticipated for the spring.

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