by Dan Rafter
One of the largest developers and owners of parking lots hopes to bring a big change to a key corner in downtown Minneapolis.
InterPark LLC — which owns, develops and manages parking facilities across the United States — is now working with Jones Lang LaSalle to choose a developer to create a mixed-use development at the corner of Fourth Street and Hennepin Avenue in Minneapolis’ CBD. InterPark already owns the 25,000-square-foot site.
The goal? InterPark officials hope to see a mix of residential, hotel or office space on the site.
“When we bought the property 10 years ago, we thought that it would be in an area of progress and development activity,” said Marshall Peck, chief executive officer of InterPark. “That was our rationale when we bought the property. What’s happened is that this end of downtown has seen some strong development activity. It seemed like the time was right to see this property developed with a mixed-use project.”
Peck is right about the development activity near the site. Opus Development Corp. plans to begin construction this year on a nine-story 212,000-square-foot headquarters for Xcel Energy Inc. on the corner of Fourth Street and Nicollet Mall. Grocer Whole Foods in September of last year opened a downtown location at nearby 222 Hennepin Ave. on the ground floor of the newly built 222 Hennepin Apartments project developed by Ryan Cos. US Inc. and The Excelsior Group.
InterPark will keep the 600-car parking garage, which offers access to Minneapolis’ Skyway, that is adjacent to the site. This will allow the site’s future developer to offer parking to future tenants.
“A developer won’t have to spend money to satisfy the parking needs of tenants,” Peck said. “The cost to build that parking would be unnecessary, with us providing parking for this site.”
Chuck Murphy, senior vice president with InterPark, said that the downtown Minneapolis market is a strong one today. This helped convince InterPark that this is the right time to offer the site for development.
“We feel that there is pent-up demand for development of several types,” Murphy said. “That could be hotel developers. The multi-family market has improved. We are hearing from developers that their new developments have gone well, that they have attracted a lot of attention from tenants. We think that we are still early in the development cycle. There are fewer lots available in this part of the market.”
InterPark’s site hit the market on Jan. 28, so it’s still early in the process. But Peck said that interest is already high. The company had already received an unsolicited offer for the site that it decided not to accept.
Jones Lang LaSalle’s Brent Robertson and Jon Dahl are leading the marketing efforts for the property.
Robertson said that with vacancy rates around 3 percent in downtown Minneapolis, demand will be high for a mixed-use project in a highly visible location.
“The timing is right for development, whether it be office, residential or hotel,” said Robertson, in a written statement. “Downtown Minneapolis is an extremely attractive market for mixed-use commercial development.”
This isn’t the first time that InterPark has made one of the lots it owns available for development. Murphy is now managing a property along downtown Baltimore’s harborfront area that InterPark is also hoping to turn into a mixed-use development.
Such projects, Peck said, are an important part of InterPark’s strategy.
“We always want to secure attractive urban parking lots that can be used for future development,” Peck said. “We are always looking to secure urban properties that are in the path of progress.”