Downtown Minneapolis' Northstar Center to reopen after millions in renovations, years of planning

When the Northstar Center complex opened in 1963, it was a beacon of efforts to reinvent downtown Minneapolis, attempting to lure shoppers and businesses back from the booming suburbs.

But as decades passed, and shiny new skyscrapers eclipsed it, the building slowly fell into disrepair. By the time Wells Fargo, one of its largest tenants, moved out in 2016, many viewed the property as obsolete.

Now, after years of planning and hundreds of millions of dollars in upgrades, the Northstar Center is reopening this month. Developer Matt Legge hopes the project — which fills an entire city block in the central business district — will again help propel a languishing downtown Minneapolis into its next chapter.

Legge is principal of New York-based Polaris Properties, which is transforming the 17-story Northstar Center West into a "hospitality-infused, flex-workplace product." By offering shorter leases and furnished offices; access to luxury event and meeting spaces; and culinary services from a chef with Michelin-star experience, the development team is betting the property's offerings will draw remote workers out of their homes.

"Years ago, all you had to do to make office buildings successful was install nice finishes," Legge said. "That's not enough anymore. This place is supposed to be a reason not to work from home and a compelling reason to want to be downtown in general."

The rest of the Northstar Center complex is undergoing an extensive transformation, too. Minneapolis-based Sherman Associates is wrapping up $97 million conversion of the adjacent 13-story east building into 216 apartments, and IHG's boutique Hotel Indigo opened in the former Crowne Plaza Hotel last year.

Legge's team invested more than $96 million to gut and renovate about 650,000 square feet in the west building and the parking ramp over the past year and a half. Remaining space, on floors 10 through 17, will be custom-built for future office tenants.

It's a tougher time to be marketing downtown office space. The vacancy rate in Minneapolis' central business district is 23%, outpacing the metro-wide average of 16%, according to a third quarter report from Colliers. Between that and high interest rates, office building construction in the Twin Cities has virtually stopped.

Real estate brokers, however, said recent leasing activity has been busiest for high-quality office space. And Legge is confident the new Northstar will wow prospective tenants: Those who remember the old building "will just need to see it to believe it," he said.

Nods to the 1960s

Homages to the Northstar Center's vintage are peppered throughout the renovated west building, which has a history of hospitality dating back to the 1960s, when the restaurants surrounding the seventh-floor hotel swimming pool were among downtown's swankiest destinations.

The complex, which spans the block between 6th and 7th streets and Marquette and 2nd avenues, is also considered the birthplace of Minneapolis' skyway system — though longtime commuters might hardly recognize the new passageway through the property.

"We've been cut off from this skyway for so long," said Clark Whitmore, who works in the neighboring Capella Tower. "I'm delighted that it's reopening."

A 12-hour playlist, dubbed "1960s on a Rainy Night," will serenade passersby with nostalgic tunes. Gone are many former restaurants: the Greek Grill & Cafe, Subway, Sorrento Cucina.

Developers widened the walkway to improve the pedestrian experience, Legge said, leaving skyway-level space for just a couple of retailers, an anchor tenant lounge, a management office and exhibit space that currently hosts a living museum designed to look like a 1960s household.

Dining is now concentrated in the first-floor atrium connecting the east and west buildings. The former Northstar Market is now a more charming general store that will offer UPS and dry cleaning services as well as sundries and takeaway meals.

The beloved Walkin' Dog hot dog stand will resume its decades-long tenure in the food court, where now-retired owner Dave Magnuson will license his brand and serve as a consultant.

Good Eating Company, the white-tablecloth arm of the global food services provider Sodexo, will run the building's food services, including the food court's Northstar Cafeteria. Alexandre Oliver, the company's district manager, said his team aims to bring the fine-dining experience to quick-service concepts, with a number of self-pay kiosks and grab-and-go options.

"We're leaning into that retro theme, so bringing out very classic stuff," said Nathalie Cassidy, general manager of hospitality services for the building. "Think: beef bourguignon, coq au vin, chicken pot pie, homemade sandwiches."

On the street level, the Krona Cafe (an ode to the old Krona Bar) will sell house-made doughnuts and St. Paul's SK Coffee.

Global security firm Prosegur will provide services and house its regional headquarters on site, hopefully mitigating safety concerns potential tenants might have about downtown, Legge said.

The property's 975-stall parking ramp, which had a reputation for being dark and cramped, received about $12 million in physical improvements and signage. The high volume of parking spots could also be key to luring back commuters, Legge added.

Competing with remote work

Polaris Properties' capital partner, New York-based Taconic Capital, purchased the Northstar Center in late 2017. It took years to line up the project's financing, which includes federal and state historic tax credits as well as a Property Assessed Clean Energy (PACE) loan, Legge said.

The long process might have been a blessing. After the 2020 COVID-19 outbreak, many companies decided to downsize or vacate their office space. As the building prepares to reopen, Legge said he's noticed an uptick of energy in downtown Minneapolis.

"We're pretty confident that we'll have a great audience of interested users as soon as we open these doors, and people can experience this place," he said. "And hopefully that just creates this great community and population of people that activates all the environment."

Floors seven through nine in the west building contain office lounge space and about 20 "skyboxes," which can each serve as private suites for a few dozen workers. Tenants won't have to lock into traditional long-term leases, making the offices a good option for larger companies that might want to try renting extra space for hybrid workers.

Individual memberships are available starting at $375 a month, a rate that includes Wi-Fi, printer access, dog-friendly workspaces and pantry service. Tenants will also be able to use an app to cater meals from the kitchen led by chef Randall Prudden, who worked in top restaurants like Spoon and Stable and Alinea in Chicago.

"You really aren't leasing a desk or a private suite," said Legge, who describes the building's amenities as its "hardware" and the hospitality services as its "software." "You are a member of a 100,000-square-foot experience, and you get to really roam around and find your places day-to-day that you want to be."

That includes the building's showpiece: The eighth floor, branded as "Northstar 8," holds a 260-person conference room and an outdoor terrace with capacity for up to 350 people. Retractable doors lead to a luxe bar and lounge area, dubbed the Rosewood Room, another nod to Northstar's past.

The area can be a venue for weddings, banquets and corporate gatherings. Guests also have access to other building amenities, like the golf simulators and nine-hole putting course on the seventh floor.

"What we're trying to accomplish is making this a place worth dressing up for," Legge said. "Like there should be such a high level of elegance and experience — and certainly culinary service — that you're excited to dress up and get down here. Because it's better than working from home."