‘Upscale’ hotel to replace campus Radisson

A private equity firm plans to buy and renovate the hotel. The new lease will net the University of Minnesota millions of dollars.

Conor Shine

The Radisson Hotel is moving out of its spot at the heart of the University of Minnesota campus and a new, âÄúupscaleâÄù hotel is poised to take its place.

The new hotel will occupy the same building at 615 Washington Ave. SE, but will renovate the space into an âÄúindependent, upscale, lifestyleâÄù hotel, according to planning documents.

Renovations must be finished by spring 2014 when the Central Corridor light-rail line begins running through campus and the hotel will stay partially open during that time.  It will be owned by a California-based equity firm and Richfield Hospitality Inc., a hotel operation company, will manage the building. No substantial changes to the hotelâÄôs capacity are expected.

A 50-year lease for the land was approved Thursday at a University Board of Regents meeting. The deal will charge the new hotel a minimum rent nearly three times what the Radisson is currently paying, generating an expected $36 million over the life of the lease, with an additional $1.4 million transfer fee paid to the University up front.

The hotel might use University logos and branding, including in its name, but those discussions are still in early stages, said Susan Weinberg, director of real estate.

The Radisson moved into its spot along Washington Avenue in the 1980s, after the University of Minnesota opened up a bid to bring a hotel to campus, Weinberg said.

The RadissonâÄôs lease ran through 2033, but financial difficulties at the hotel prompted the sale. 

An on-campus hotel provides easy access for University guests, Weinberg said, and also hosts visiting athletic teams and patients at the nearby medical clinics. 

A Blue Ribbon Day

Reports more than a year in the making were summarized to the regents by Provost Tom Sullivan detailing each collegeâÄôs plans to make up for long-term budget shortfalls.

The so-called Blue Ribbon reports outline broad targets for cuts and new revenue streams in light of decreased state funding and economic pressures wrought by the recession.

Among the most common income-boosting suggestions across colleges were expanding profession-oriented masterâÄôs degree programs, admitting more undergraduates and offering more online courses.

Sullivan charged each of the University systemâÄôs academic units with producing the reports in fall 2009. The reports were submitted in February and are being used to help plan for next yearâÄôs budget.

New regents take office

Just 17 days after being appointed, three new regents were sworn in Thursday and jumped into their first round of meetings.

âÄúIt feels good to be back,âÄù Laura Brod, a University alumna and former legislator, said.

The new regents, chosen by the Legislature on Feb. 21, had little time to adjust to their positions and now find themselves at the top of the UniversityâÄôs decision-making hierarchy with the school in a precarious financial situation.

Brod said there is a learning curve with the job, so sheâÄôs focusing on asking questions and getting context on issues.

âÄúThe interrogative questions we teach kids in kindergarten, those are the kind of questions the board needs to ask more,âÄù she said.

New Regent Steve Sviggum said ThursdayâÄôs meetings reminded him of legislative committee meetings, something he is familiar with after his years as a legislator.

While adjusting to being a regent, Sviggum said he wants to avoid disrupting the boardâÄôs momentum and will use common sense when making decisions.

It was only an hour into new Regent David McMillanâÄôs first meeting before he was asked whether his executive role at Minnesota Power, a Duluth-based utility company, would bring any perks for the University.

âÄúI was so hoping when Regent McMillan raised his hand âĦ that he was going to provide free utilities for a couple years,âÄù Regent Dean Johnson joked.