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MINNEAPOLIS-The Minneapolis City Council on Friday approved a $2 million bridge loan for the development of the Midtown Global Market, a key element to the Ryan Cos.' $190 million Midtown Exchange renovation project. The site of the former 1.1-million-sf Sears, Roebuck & Co. mall and mail order center, Midtown Exchange will include the headquarters of Allina Healthcare, a 136-room Sheraton Hotel, offices, 200,000 sf of retail, and more than 350 units of rental and ownership housing. According to City Council records, the development is expected to generate about 2,500 jobs. The grand opening is slated for March 2006.
The approved bridge loan from the city has a 2% annual interest rate with interest only payments through 2007 and 30-year amortization thereafter. The loan will be issued from Fund EDP-Defaulted Property Administration, the capital fund used to fund activities related to the former Sears property.
The Neighborhood Development Center, the nonprofit organization heading up the market component, conducted extensive primary and secondary marketing research to identify customer segments, food spending patterns and shopping preferences. The results of the market analysis shows a potential of $28.5 million in total annual sales, which includes: $16.9 million in groceries; $6.8 million in prepared food and restaurants; and $4.8 million in art, crafts and gifts.
The following nine pre-leases have been executed: Mapps Coffee, Golden Thyme Coffee, MN Meat Specialties, West Indies Soul, Salsa a La Salsa, La Loma, Northland Native, Holy Land and Jakeeno's. The NDC is currently in negotiations for the following 11 tenants: Udupi Café, Bymore Meats, Safari, Just a Taste, Everest on Grand, the Local, Los Ocampo, Victor Hugo Jewelry, West Indies Spices, Sushi Tango and La Perla. The nine tenants with executed pre-leases represent 25% of the potential gross rent and 25% of the potential rentable space. NDC will need to achieve 50% of the potential gross rent prior to closing.
Additionally, the city and NDC have submitted a pre-application for a $2.7 million Economic Development Administration (EDA) forgivable loan. According to city council documents, the Midtown Global Market is one of the top three Minnesota projects competing for 2006 dollars. . EDA funding is subject to 2006 congressional appropriations, which will be decided this fall.
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