Hotel moves as U buys a block

An area once slated to be an extended-stay hotel could become a medical facility as part of the school’s master plan.

by Barry Lytton

The University of Minnesota marked an entire block in Stadium Village as “future University ownership” on its master plan in spring 2009.

The institution just began acquiring that land by purchasing three of 14 land parcels for $6.6 million on Jan. 29. By September, it’ll own the entire 2.29-acre block for a total of $26 million.

CPM Companies had planned to build an extended-stay hotel on the land. Now, it will move the project across the street, displacing a decades-old chow mein bakery.

According to the University’s 2009 campus master plan, the block was slated to be under the school’s ownership by 2019.

Board of Regents Chair Richard Beeson said the master plan helped guide the decision to purchase the block, but the acquisition itself was because of a real estate opportunity.

“Cleared land and land assembly is really tough to accomplish in an urban setting,” Beeson said. “When those opportunities 
come up, our view is that we want staff to try to secure those in the University’s interest.”

Though Beeson said the University can’t definitively say what will be built on the newly acquired block, he said it’s possible that the University will turn part of the land into a medical facility.

Monique MacKenzie, director of planning for the University’s Space and Architecture Capital Planning and Project Management office, said there are no immediate projects planned for the land.

Daniel Oberpriller, president and owner of CPM, approached the University to sell the land in November, despite his investment in building the new hotel on it.

“We ordered the steel; we ordered the concrete pre-cast planks. We were about to start construction,” he said. “That’s why the purchase price on that property was so high.”

Oberpriller said CPM had to get the property rezoned from an institutional zone to a commercial one so it could build the hotel.

“We knew that the block was designated in their master plan,” he said, “but they didn’t put up a fight, so we did proceed and get entitlements for the development.”

When Oberpriller first informed the University of his development, the school’s director of real estate, Sue Weinberg, said it expressed concern over the planned hotel.

“We told them, ‘Well gee, the University really anticipated that we would be acquiring that property at some future time and developing [it],’” Weinberg said.

By the time CPM offered to sell the hotel’s original location in November, the company had made purchase agreements on the 11 other parcels and was ready to sell the entire block.

The Board of Regents approved a deal in December to buy the land from CPM in two installments — $6.6 million for the three parcels where the hotel would have been, and $19.2 million for the other 11.

The deal stipulated that CPM would demolish all structures on the block before the University bought it. Oberpriller said his company will clear the rest of the block when current leases end on or before Sept. 1.

Across Erie Street Southeast from the newly acquired block, the University is building the M Health Clinics and Surgery Center, which Weinberg said is the project previously called the Ambulatory Care Center.

CPM now plans to build its extended-stay hotel across the street from the original planned location. However, Oberpriller said it will be a different size and shape because of the new land’s dimensions.

Currently, that space is occupied by the Everfresh Food Corporation.

Everfresh’s vice president George Edgar said the business — a chow mein noodle producer with nearly 25 percent of the U.S. market share — has been there for over 50 years.

“At some point, something works out for all the parties,” he said.

Everfresh Food plans to move, Edgar said, but he declined to say where or how much his land sold for.

Oberpriller said CPM will begin construction of the new hotel in June with an opening date slated for a year from then.