Minneapolis rejects pitch for 80-story tower downtown

City of Minneapolis planners on Friday rejected a proposal for an 80-story tower downtown and revealed problems they saw in the efforts of its developer.

The move quashed the prospects for a building that would have surpassed the IDS Center to become the tallest in Minnesota and injected new drama into an unusual public contest the city created to redevelop a parking lot on Nicollet Mall.

In a letter to Duval Development, which proposed the giant tower, city planners cited five reasons it was being rejected in the contest's early stage.

They questioned the experience of owner Alex Duval, the company's operating performance and its ability to raise money, and expressed uncertainty over the housing developer that the firm identified for the tower. They also raised questions about the firm's study of the local real estate market.

"The information we got for evaluation was not complete," said Erik Hansen, principal project coordinator for the city.

After the city announced the rejection and released its letter to the media, Duval said he was surprised.

He added that he knew planners wanted more information from his company and requested a meeting with them to provide it.

"I don't understand why city staff won't meet with us to discuss the project when the overwhelming majority of the community says it is what it wants," Duval said. Surveys his firm conducted online suggest strong support for the new skyscraper, he said.

Three other developers are still under consideration by the city: M.A. Mortenson, United Properties and Doran Cos., all local firms with a long track record of projects in the Twin Cities metro area. They proposed buildings ranging from 30 to 36 stories for the site.

The rejection of Duval's tower came just over a month after the four developers first revealed their ideas and before any public hearings on them were held. City officials said they were acting within the rules they set for consideration of the proposals.

Even so, the move raised questions about the openness of the city to new developers and about the decision to hold a beauty contest for the site in the first place. City planners said they felt pressure to make a decision almost immediately after the plans were unveiled in mid-December. City Council members also started to be lobbied.

Duval's participation also carried a wrinkle: His wife, Kjersti Monson, has been the city's director of long-range planning since May 2013. She filed conflict-of-interest forms and has not taken part in the process of reviewing the proposals.

At stake is the development of a city-owned parcel bounded by Nicollet, Washington and Hennepin Avenues and S. 3rd Street. It is known as the Nicollet Hotel Block for a stately hotel that stood there until 1991.

The visibility of the site, and the audacity of Duval's super-tall structure, created a frenzy of both positive and negative reactions. "Council members were incensed that they were being lobbied about this," Hansen said.

City staffers and a City Council member said it was better to rule out infeasible plans before public support could grow and complicate the process later.

"If one project is really off the table for financial reasons, I don't want to give people the false impression that it's still in consideration," said Council Member Jacob Frey, who represents the Third Ward, which includes a portion of downtown.

Hansen said that there were too many uncertainties in Duval's proposal and that, under the rules of the competition, city officials would not meet any of the developers until later in the process.

The city required the developers to initially submit information on Dec. 11 and respond to a round of questions by Jan. 12. Duval sought the meeting after planners told him that his answers to those questions weren't sufficient.

The planners' chief concern was the uncertainty over Duval's financing. "We are really pushing on the market right now and we do not want to miss the opportunity," Hansen said. "Therefore, since he can't provide any more information, we have to deem it insufficient."

Duval said he was working this week to get a guarantee of financing from a major institution. Ultimately, it wasn't fast enough for the city's timeline, which calls for planners to make a recommendation in April.

None of the costs or financing for any of the four proposals have been announced.

Duval had proposed that 50 stories of the tower would be used for apartments, with the rest a mix of a hotel, offices, retail and restaurants.

The 42-year-old developer, a relative newcomer to the Twin Cities, previously designed super-tall buildings in China for a firm run by one of his graduate school classmates. After returning to the United States, he worked for John Portman & Associates in Atlanta, first as a project manager and then in its capital markets group for real estate development.

Hansen said the city is eager for new developers like Duval and pointed to a national advertising campaign it conducted to attract proposals for the Nicollet Hotel Block.

"We want to see Mr. Duval develop this, if he can," Hansen said. "There's nothing keeping him from buying a private piece of land and developing it."

Frey also said he hopes Duval will consider building the tower elsewhere in the city.

"I love the height and the excitement generated by the design, and while financial concerns were too great for the city's most precious piece of real estate, I sincerely hope that Mr. Duval aims to enact his proposal on other parcels in our city," Frey said. "So in other words, keep at it."

The first chance for members of the public to formally express their opinions on the proposals for the Nicollet Hotel Block will be next month, when city planners present however many options are still on the table to the Downtown Minneapolis Neighborhood Association.

Kristen Leigh Painter • 612-673-4767