North Loop landlord runs his building on a handshake

It was tax season 2009 when Andrew Eklund noticed an extra $86,000 on his company's balance sheet.

"What's this money for?" Eklund, chief executive of the digital marketing firm Ciceron, asked a colleague.

"We haven't paid rent all year," came the reply.

While Eklund knew finances were tight that year, he had no idea Ciceron had gone 12 months without paying a dime for their space in the Savoie Building in the North Loop district of Minneapolis.

All the while, landlord Chuck Gross continued responding to Ciceron's maintenance requests and maintaining a banter-filled relationship with Eklund. Gross never said a word about the late rent.

"Well, I know my tenants have their good years and their bad years, and I knew they would pay it back," Gross said.

And they did.

"I've never had a lease. This is how it works here: You have a handshake," Eklund said. "I'm indebted to this guy. That's the story."

Gross bought the building in the late 1980s when the neighborhood was still known as the red-light district.

The land and building were valued at $122,000 in 1988 and skyrocketed to $2.38 million by 2015, according to public records. He created 40 private suites ranging from 400 to 5,700 square feet.

While tenants have come and gone, the turnover rate has been low. That's due in part due to the rent he charges, around $12 a square foot, about half the rate for other buildings in the neighborhood.

"He's been very entrepreneur-friendly, charging much less than many neighboring buildings. I don't know why he does it," Eklund said.

In an interview, Gross — sporting a head of white hair and a fresh sunburn from doing some roof work — shrugs off the incredulity.

"I make money off the building. I don't need more of it," he said.

Gross had a successful career in financial planning and still invests in stocks. The Savoie is his only property because he prefers not to spread himself too thin.

He chose to stay content vs. the conventional wisdom of growth, acquisition and raising rents in a gentrified neighborhood.

His generous approach with tenants has worked well — mostly. "I've been taken before," he said.

Several tenants have gone out of business and left the building without paying their bill. Once, a tenant lost his business, and Gross not only forgave his rent but gave the tenant money to pay his legal fees for bankruptcy.

"I think it's a burden to have a lot of money," Gross said. "And this is my family."

Public relations firm McFarland Communications had its offices at Savoie until its recent acquisition by ad agency Gabriel deGrood Bendt (GdB).

"Chuck has been the best landlord," said Teresa McFarland, the firm's founder. "We are sad to leave but know there are people who already want this space."

Kristen Leigh Painter • 612-673-4767