Owner may auction historic St. Paul Athletic Club building after it loses its last tenant

With the last tenant leaving the old St. Paul Athletic Club earlier this month, the owner of the property wants to turn off the lights and sell it, creating even more uncertainty for the city’s central business district.

John Rupp, who restored life to 340 Cedar St. after it narrowly avoided the wrecking ball in the 1990s, said he’s in talks with two potential buyers. If he doesn’t reach a deal by mid-September, Rupp said he will auction the property to the highest bidder.

Rupp owes more than $10 million to lender M360, according to a Ramsey County District Court ruling that he defaulted on his mortgage. He owes additional money to vendors and $526,000 in delinquent property taxes for 2022 and 2023, plus $180,000 in taxes and late fees this year.

The property has been for sale for nearly five years. The county estimated the building’s value at $3.8 million this year, down nearly 60% from its 2019 assessment.

Rupp said he and M360 agreed to auction off the building, avoiding the foreclosure process. An attorney for M360 declined to comment Monday.

“The lender ends up with very little, and I lose my investment — which I can tell you was very substantial,” Rupp said.

Though the pandemic added challenges for the 13-story property — which included a fitness club, office space, banquet halls and a 56-room boutique hotel — Rupp said problems downtown began before 2020. The St. Paul Athletic Club is next to the Central Station light rail stop, considered a hot spot for crime for several years.

“This thing was designed so that it would facilitate economic development,” Rupp said of the light rail. “And what’s happened is that it’s become, in many locations, a blight — it has destroyed investment rather than enhancing it.”

The St. Paul Athletic Club was designed in 1915 by Allen Stem, one of the architects behind New York’s Grand Central Station. Thousands of members paid to join the club, which housed a bowling alley, barber shop, squash courts and sun deck.

The club thrived for decades, even after the Twin Cities suburbs drew retail out of downtown. But aging facilities and dwindling membership in the 1980s caused the club to file for bankruptcy. A local developer agreed to purchase the building hours before it was stripped for parts in 1992.

Rupp took over shortly after and brought in Life Time Fitness as an anchor tenant from 1996 to 2010. After Life Time left, the property went into bankruptcy again, but Rupp worked out a deal with his lenders, renovated and opened a privately run health club.

That club closed in 2021. Rupp said the event space recently stopped taking bookings. Half of the hotel rooms have been used as a shelter for homeless women and children since 2020, but the nonprofit Union Gospel Mission moved its guests earlier this month to a property on the city’s East Side.

Rupp told city officials he planned to turn off the building’s lighting and heating. The property has been the source of complaints about maintenance over the years, mostly in the skyway level, according to city inspection records.

City Council Member Rebecca Noecker, who represents the area, said that she would like to see the property repurposed, though she hasn’t heard of any interested buyers. Noecker noted that the city and Metropolitan Council are seeking proposals from developers interested in the Central Station site, which could be combined with the St. Paul Athletic Club.

“I could see a future in which that becomes, say, the front door to a larger development,” she said.

Noecker, along with Securian CEO Chris Hilger, is chairing a downtown real estate working group looking at the future of St. Paul’s vacant office buildings, including those being marketed by Madison Equities. The group may recommend the city acquire some properties, and it may recommend the demolition of others.

Officials said it was too soon to know what they’ll suggest for the Athletic Club. Rupp said he thinks demolishing the building would be “a tragedy.”

“My objective is to find somebody who will respect and make use of that building,” he said. “And help protect it.”