Glass still half-empty for St. Paul brewery site, as 3rd deal fails

The latest deal to buy the Schmidt Brewery complex in St. Paul has fallen through.

The property owners, Minnetonka-based BHGDN, canceled the purchase agreement last month with Brewtown, a partnership between a father-son developer team and the West 7th/Fort Road Federation. Brewtown had planned a $200 million project to redevelop the 15-acre site with artist lofts and mixed-use housing, retail, office and entertainment.

It was the third attempt in the past four years to sell the property, a neighborhood landmark. The collapsed deal doesn't come as a surprise given the economic climate. Credit has withered, and many businesses are cutting costs. Another high-profile deal in St. Paul, involving Ramsey County-owned buildings along the downtown riverfront, ended last month when developer Opus Northwest canceled its purchase agreement with the county because it couldn't land an anchor tenant.

Brewery property manager Dave Kreitzer, who represents BHGDN, recently met with city officials to discuss the site. He said he's forming a task force of about a half-dozen people that will look at different development possibilities and prioritize them. The group, whose members Kreitzer is choosing, will be made up of city officials and community members -- no developers.

"My first priority is to sell property, so I'm proactively trying to find a way to work with neighbors and the community and the city," Kreitzer said. At this time, he added, BHGDN, which has owned the site since 1991, isn't interested in being the developer.

He said people routinely inquire with the city about business opportunities or locations, and he wants to see whether any of those ideas would fit at the brewery.

Mayor Chris Coleman said that the discussion with Kreitzer went well and that he's committed to finding viable options for the site.

Council Member Dave Thune, who represents the area, echoed that sentiment. "I'm hopeful mainly because they took the initiative to say they didn't want to let the concept [of working with the community] go."

The brewery has been vacant since 2004, when Gopher State Ethanol, the only urban ethanol plant in the country, filed for bankruptcy. It was the target of a neighborhood lawsuit over its noise and odor.

Ed Johnson, executive director of the federation, said it's a shame the project couldn't work now.

"The good news is that the ball was moved forward quite a bit for getting development in place," Johnson said.

The city has drawn up a redevelopment plan for the property, and the city, state and Metropolitan Council have pledged about $2 million in cleanup grants.

Brewtown had lined up one partner, Dominium, to buy the 100,000-square-foot bottling house and turn it into 115 units of affordable housing aimed at artists. Dominium, which could still be a part of a future development project, also wants to build 16 rental townhouses.

The city Housing and Redevelopment Authority has said it's willing to help find financing for the $47.8 million housing construction tab.

In the end, though, it's going to take more than that one housing project to breathe new life into the brewery. Kreitzer said there's no telling how long that will take.

Chris Havens • 651-298-1542