A Michigan-based developer who three years ago proposed an 18-story, 293-unit apartment building at 10th Street and Marquette Avenue in downtown Minneapolis has returned with a new company and a new 16-story plan for the site.
The 307-unit project also has a new name, CBD Minneapolis, short for City Club Apartments - Central Business District Minneapolis.
Jonathan Holtzman, the former chairman, CEO and 50 percent owner of Southfield, Michigan-based Village Green Holdings, has spent the last two years making the transition to founder, chairman and CEO of City Club Apartments, based in Farmington Hills, just outside Detriot.
"Rightfully so, the Super Bowl and the Minnesota Vikings own the stage right now," Holtzman said in a statement prepared for Finance & Commerce. "We are planning a groundbreaking for not too long after the Super Bowl."
Mark Winter, a spokesman for City Club, said the company is moving ahead with the Minneapolis project but wasn't ready to share details about the new building plan.
A new rendering from Minneapolis-based BKV Group shows the latest design.
The difference is in the exterior finish material, said Craig John, senior project architect at BKV. The original used EIFS, a synthetic stucco finish, while the new one uses a metal panel finish made of aluminum composite material.
Holtzman has kept a low profile in Minneapolis, but is doing the paperwork needed for construction. A certificate of real estate value made public Jan. 5 reveals that in November a related City Club entity paid $5.689 million to acquire the 0.63-acre site at 1000-1016 Marquette Ave. S.
The sellers are two entities related to Vadnais Heights-based Pratt Ordway Properties, which is not involved in the new project. The property last sold for $1.495 million in 2012.
The project site is just west of the Minneapolis Hilton, with Target Plaza Commons and the WCCO-TV building making up the rest of the project block.
City of Minneapolis spokesperson Sarah McKenzie confirmed last week that the building permit is currently under review.
"Any changes that would have been made could not stray too far from what was shown at that time," she said.
The original plan on file with the city showed that two buildings on the site were to be demolished to make room for a new 20-story tower. The plan was later trimmed to 18 stories. The landmark three-story Handcrafted Guild Building, which shares the site, will be preserved and used for a mix of residential and retail space. The original plan called for apartments randing from studios to two-bedroom units, with five two-story units on the ground floor. The tower was to be topped by a roof terrace and "sky club" for tenants.
Holtzman held a ceremonial groundbreaking last Thursday for his $70 million City Club Apartments-Central Business District Detroit, a 288-unit mixed-use project under construction in his home-town. The company used the CBD format in 2016 for a luxury apartment project in Cincinnati and has indicated it will use it in Minneapolis.
The Detroit project will offer a hotel-style lobby, 24-hour concierge services, club room, business center, pool, furnished short-term rentals, a restaurant, gourmet market, pet store and dog park. It also is promising that 20 percent of apartments will be affordable.
Holtzman is returning to a different downtown market in Minneapolis.
"I think the market has certainly performed better than I expected and better than many other people expected," said Brent Wittenberg, vice president of Minneapolis-based Marquette Advisors, which researched the apartment market.
Wittenberg admits he has been pleasantly surprised by the continued success of new downtown multifamily projects, but he is concerned that demand finally may be waning.
"The question is, will the absorption continue with another thousand units coming on line in the next year to year-and-a-half?" he said.
Wittenbert thinks that with most of the new projects focused on luxury apartments, there could be a niche for tiny aprtments with more affordable rents.
"Three hundred square feet isn't much, but a thousand dollars a month to live downtown isn't bad," he said.
Holtzman brings experience and deep pockets to the game.
At Village Green, Holtzman ran the 50-year-old, $4.5 billion apartment company that his grandfather, Joseph Holtzman, started in 1919 as a mixed-use development company.
In 2016, Jonathan Holtzman sold his interest in Village Green's operating companies to Dallas-based Compatriot Capital and partnered with Canadian developer Alan Greenberg, according to information from CCA.
Holtzman sold his shares in the Village Green management company, but kept a $2 billion portfolio of 10,000 apartments in 30 communities and took over management of them. Including Minneapolis, the partners say they have $500 million in various stages of development, construction and lease-up in the downtowns of Chicago, Cincinnati, Kansas City, Pittsburgh and Louisville, Kentucky.
City Club's website lists ownership of two Twin Cities properties, the Village Club of Bloomington and Mill District City Club Apartments in Minneapolis.
"This is our eigth brand new development in Minneapolis since the early 2000s," Holtzman said in a prepared statement. "This development represents new thinking in development, construction, technology, green, amenities and services. Those details will be announced at the groundbreaking."
Village Green, under Holtzman's watch, completed the Soo Line Building City Apartments in Minneapolis in 2013, according to Finance & Commerce's online Twin Cities Apartment Development Tracker.
Village Green no longer owns any properties in the Twin Cities, but manages 11 apartment communities here. They include the Soo Line; The Burlington and The Penfield, St. Paul; Millennium Apartments, St. Louis Park, which just sold for $40.9 million; The Point at Cedar Grove, Eagan; Village Park of Bloomington and International Village, Bloomington; Parkway Estates of Burnsville; Grand Pre East, Little Canada; and White Pines, Shakopee.
Read full article by Anne Bretts for finance-commerce.com here.
