With new St. Paul Macy's developer chosen, construction could begin soon

Macy's and Walgreens in downtown St. Paul
The St. Paul Port Authority purchased the downtown St. Paul Macy's building, left, in 2014.
Jennifer Simonson | MPR News 2015

Construction could begin as soon as next month on the long-vacant downtown St. Paul Macy's. The St. Paul Port Authority approved a $60.6 million joint venture agreement Tuesday with the Hempel Companies to redevelop the old department store site.

Port Authority President Lee Krueger said his staff met with dozens of developers over the last two years but had little luck until recently.

"I think the key thing is uncertainty. A lot of developers didn't want to touch it with a 10-foot pole because they just didn't know what to do with it," Krueger said.

At one time proposals for the hulking structure in the middle of downtown included a parking ramp and offices to a Burlington Coat Factory, and even demolition to make way for a high rise.

Oppidan says in a statement it has "a thoughtful process when entering into deals" and does its due diligence "as expeditiously as possible." The company says its "incredibly disappointed in this turn of events."

Randy McKay, Hempel principal, said the company plans to speed up work in part by removing less of the facade.

"It will just have a little bit more of the existing light colored brick, and it will have a little bit less glass, but we think the end product will be just as good," McKay said.

A fifth-floor practice rink for the Minnesota Wild is still part of the plan. And McKay said his company is saving time by keeping the original floor structure.

Macy's closing
St. Paul Macy's in 2013.
Jeffrey Thompson | MPR News 2013

Hempel's proposal calls for $11 million in tax-increment financing. Hempel President Josh Krsnak says the bulk of the development cost — $46 million — will come from a loan. Krsnak says the company is still working out the details but has been in talks with lenders.

Krsnak and McKay say a half dozen potential tenants are interested in retail space in the building. And last year the Port Authority sold a piece of it to Walgreens, which plans to open a two-story drugstore.

But the most high-profile tenant is expected to be the Minnesota Wild. Jamie Spencer, vice president of new business development, said the team has long needed a regular place to practice.

"Right now our team practices when they're not at Xcel Energy Center literally all over the city," said Spencer. "It's tough on the team, it's tough on the equipment managers. We have to replicate the setup at individual rinks around the community."

Initial plans called for the Wild to use the rink part time. But the port authority said Tuesday that the team will use it around 100 times per year as its primary practice facility.

The team has not yet signed a lease. But Spencer says the Port Authority's deal with Hempel means the Wild are another step closer.

Port Authority President Lee Krueger says initial work on the building — including asbestos removal — could begin as soon as next month. The project timeline calls for the building to be move-in ready by September 2017, in time for the Wild's training camp.

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