Cornerstone Group, based in Bloomington, MN, and longtime St. Paul developer Sherman Rutzick have started work on the 112-year-old historic building, creating condominiums that will be offered for sale starting from $165,000 and going up to $880,000. The 100,000-sf brick building at 281 E. Kellogg Blvd. has been vacant for about three decades, ever since the Burlington Northern moved out. Burlington Northern was the success to Great Northern Railway, the railroad company that was founded by James J. Hill.
Principals at Cornerstone "cut their teeth" in the commercial real estate market through a firm called Artspace, which converted a number of warehouses in Lowertown to artist lofts in the 1980s and 1990s, said Jay Nord, a real estate agent with Edina Realty who is selling the condominiums.
The building has been plagued by an unstable foundation in one corner that first revealed itself about 100 years ago when the railroad tycoon decided to add two floors to the top of the building.
"We've got a solution, but the appearance and nature of the problem had scared a lot of other developers away from it," Nord said.
Nord expects about half of the units in the project will be ready for occupancy in January or February of next year.
Units on the first through fourth floors of the seven-story building will be built around existing walls, but the upper floors will be custom-made for buyers, she said.
With a $642,000 loan from the St. Paul Housing and Redevelopment Authority, Rutzick and Carey bought the building this summer. The partners have about 90% of their financing in place, and are at "the point of no return," Nord said.
The project is the third Lowertown condominium development to get under way this year, showing the strength of the downtown residential market. The Essex on the Park, at Seventh Street between Sibley and Wacouta streets, is under construction, while units are being pre-sold for Sibley House, a 10-story development at Sibley and Fourth streets.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
