Costs in focus as North Minneapolis project advances

Thursday, July 16, 2015

Finance and Commerce

The costs tied to a grocery store rehabilitation project in North Minneapolis remained in focus at a Hennepin County Board meeting Tuesday.

Hennepin County Commissioner Jan Callison flagged a report about the price tag swelling from $5.5 million to $6.3 million for development costs and the first year of operations at 4414 Humboldt Ave. N, near the new Webber Park Library.

County staffers said they would look into the increase, but it’s not expected to affect plans to sell the property to Pillsbury United Communities, the Minneapolis-based nonprofit behind the project. Meanwhile, the parties will begin negotiating a land purchase agreement.

The beefed-up budget exposes a barrier for Pillsbury United, which will rely on an expansive fundraising effort to cover project costs. It expects to have funding lined up before it officially buys the property for $487,500, likely in early fall 2016.

“[The price jump] clearly poses a new challenge for Pillsbury United,” Callison said after Tuesday’s meeting. “It doesn’t change my view that if Pillsbury United feels confident that this is a project they want to take in, it looks like they’d be a good entity to take it on.”

Pillsbury United chief of staff Adair Mosley said last week the nonprofit is working on an “aggressive timeline,” but the foundation arms of several corporate giants – including General Mills, Cargill and UnitedHealth Group – have offered preliminary support.

None of the prospective donors has committed funding yet, but Pillsbury United is optimistic it can nail down required funding.

“Nothing has changed on this end, and we are excited to be officially moving forward with the project,” Mosley said Tuesday.

The project will transform a 15,000-square-foot former Kowalski’s grocery store, owned by Hennepin County since 2008, into a new grocery store and wellness center. County commissioners have largely supported the effort, but several have expressed skepticism that the new store can thrive where others failed.

Pillsbury United so far has had help from Oppidan Investment Co., a property developer with grocery-chain experience, and grocery mainstay Supervalu. North Memorial Health Care is gauging the feasibility of operating a second-floor wellness center, with a dietitian and other services on-site.

 

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