A dozen years in the making, North Loop Green could be model for languishing downtowns

The newest apartment tower in Minneapolis offers a perk others can’t: A bird’s-eye view of Target Field.

“You can watch a Twins game from your bed or deck,” said Bob Pfefferle, managing director for Hines.

The view of the stadium from a 15th-floor apartment at North Loop Green was more than a dozen years in the making. The mixed-use project is one of the city’s most ambitious — and complicated — developments in decades. The highest skyway in the city connects the project’s two towers, which house more than 1 million square feet of space. Offices, apartments, fully furnished short-term vacation rentals. There will be three restaurants, parks for people and dogs, a lawn big enough for yoga classes and outdoor movies plus more gathering spaces inside.

The project, completed just weeks ago, comes at an especially challenging time for downtown Minneapolis. There’s already a glut of empty office space in the metro, and building values are plummeting. But with apartments and offices in North Loop Green leasing quickly, boosters say it’s akin to a vertical neighborhood that will become a bustling downtown link between the flourishing North Loop neighborhood and the floundering Central Business District (CBD). North Loop Green could even exemplify how struggling metropolitan cities across the country can reverse their declines as hybrid work has leeched life from their streets.

“This is a vision of the future,” said Erin Fitzgerald, a commercial real estate broker and founder of volunteer group Minneapolis Renaissance Coalition that focuses on rekindling investment in downtown Minneapolis.

The apartments are already 60% leased after opening in February, and office space is even fuller. Still, the Urban Land Institute recently identified the Warehouse District as an area of “special concern.” The city had tasked it to work with industry leaders to come up with recommendations on how to breathe new life into the area. Fitzgerald said North Loop Green’s mix of places to live, work and play will be a perfect catalyst for urban renewal in that neighboring area.

”This is a model that cities can replicate all over the country to help revitalize downtowns,” Fitzgerald said.

Once known as the Rail Yard, timbered warehouses and crisscrossing rail lines dominated the North Loop Green plot during much of the 20th century. Sandwiched between the North Loop and the CBD, the area has long been a flyover zone for developers who have struggled to make sense of its historic buildings and tangle of roads and bridges.

While some developers saw challenges in the site, Hines saw opportunity. The Houston-based development company bought what was then known as the Rapid Park site, a neglected stretch of weed-strewn asphalt parking lots in the Warehouse District of downtown Minneapolis, in 2012 for $13.7 million. The towers are the third and final phase of the six-acre project.

“It’s at the confluence of all things transit in the city,” Pfefferle said, noting the site’s proximity to a key light rail station, a trio of major freeways and the Cedar Lake Regional Trail, a paved bike path that follows an old railbed from downtown to the western suburbs. “Our goal was to knit the grid of the city back together again.”

Phase one of the project was Dock Street Flats, an apartment building completed about a decade ago. That building was pioneering in its own right as it’s next door to Deja Vu Showgirls on Washington Avenue, not exactly the expected location for luxury rentals. Next, Hines developed T3, then the largest modern timber building.

For North Loop Green, Hines partnered with Chicago-based Marquee Development, another company of the family that owns the Chicago Cubs. That partnership, Pfefferle said, was key to making the park, known as the Green, successful because Marquee had already tackled Gallagher Way, an open-air event space next to Wrigley Field.

The project broke ground in the thick of the pandemic, causing much angst about spending hundreds of millions of dollars at a time when the future was so uncertain, and construction costs were soaring, Pfefferle said. Dozens of designers, planners and engineers worked remotely, but ultimately the designers only had to make minor tweaks.

Aaron Roseth, president and principal at ESG Architecture & Design, said the project was among the most challenging the firm has worked on because the buildings had to be designed around several immovable elements, including an underground creek and two elevated freeway ramps, all of which bisect the site. Designers tucked the Green under those elevated roadways, connecting the new North Loop Green buildings to the existing T3 building.

“It was daunting,” Roseth said. “How do you converge those things and make it feel like a special place and destination?”

The primary goal, he said, was to enable bikers and pedestrians to safely travel from downtown to the North Loop without having to brave Washington Avenue, a busy four-lane road that connects downtown from end to end.

“There is no better place in Minneapolis in terms of the convergence of transportation,” Roseth said. “In many ways, it’s like a little Grand Central Station for Minneapolis in terms of it being the nucleus for everybody coming and going.”

North Loop Green has been one of the few reasons for optimism in the commercial real estate world.

When Hines broke ground on the project in 2020, the office vacancy rate downtown was about 16.3%. Today, it’s double that. Still, the project is outperforming the broader market, said Brent Robertson, market lead and managing director of JLL’s Twin Cities office. Robertson said the office tower is already 70% leased, and restaurants and a bar will occupy all the retail space.

Several new tenants, including Piper Sandler & Co. and ESG, are relocating from other parts of downtown.

North Loop Green, Robertson said, is the second recently completed major mixed-use project downtown after RBC Gateway tower. Situated along Nicollet Mall, RBC has a hotel, condominiums and offices, which are fully occupied. The success of the office components in both projects, Robertson said, is a testament to the need for high-quality office space in the city.

“They each have four uses, which together create a neighborhood in itself, which we at JLL see as integral for all future urban developments,” he said.

Roseth agreed. North Loop Green, like the Fulton Market District in Chicago, are lively live-work-play destinations where market forces have dictated growth rather than restrictive zoning rules that would stifle it.

“It’s a beautiful example of the way cities should develop,” Roseth said. “A single use is not the right answer for the way to create a vibrant city.”