18 minute read
The numbers show just how important the RBC Gateway office, hotel and residential development has been to the Twin Cities.
from MREJ Feb 2023
by REjournals
First, consider 508. RBC Gateway, developed by United Properties, stands 508 feet tall, making it the tallest mixed-use tower to be built in the Twin Cities in nearly 20 years. Then there’s 222, the number of rooms in the Four Seasons Hotel Minneapolis that serves as one of the centerpieces of the tower.
Finally, there’s 34, 531,000 and $480 million. RBC Gateway is home to 34 luxury condos operated by Four Seasons. The building offers 531,000 square feet of office space. And that $480 million? That’s how much the development cost, which makes it the most expensive Minneapolis commercial project ever developed without the use of public dollars.
It’s little wonder, then, that the RBC Gateway project has generated so many headlines and so much praise since opening last year. The building, located at the intersection of Hennepin, Nicollet and Washington avenues in the Nicollet Mall area of downtown Minneapolis, has brought new life to a long under-used parcel of land in a key location.
The building serves as the U.S. headquarters of RBC Wealth Management and is also home to seven of the Pohlad family of companies and JLL’s Minneapolis office. The Four Seasons hotel located in the property is Minneapolis’ first fivestar hotel. And the building, which was nearly five years in the making, now ranks as one of the 10 tallest in downtown Minneapolis.
To say that RBC Gateway, then, has transformed this slice of downtown Minneapolis? That’s an understatement.
Bill Katter was president and chief investment officer with United Properties when the company was developing RBC Gateway. Today, Katter is partner with Eden Prairie, Minnesota-based Interstate Development. But he still looks back fondly at the time in which he spearheaded the construction of what became the tallest new skyscraper in downtown Minneapolis in 20 years.
Katter says that he is proud of what United Properties and all the companies working on the RBC Gateway project have brought to the city’s downtown.
“RBC Gateway delivered some key benefits that were needed in downtown Minneapolis,” Katter said. “It increased interest and activity and solidified the north end of Nicollet Mall. This project showed that with the right set of occupants in a building, you could create a tremendous, exciting plan. Before RBC Gateway, this was a parking lot. It was a place nobody went to.”
Today, this stretch of Nicollet is a busy one. As Katter says, the mixed-use RBC Gateway building is a 24/7 property. People live there. A steady stream of hotel guests check in each day.
“This property doesn’t go dormant at night. It is always alive and on,” Katter said.
Nick Kreutziger, project manager at St. Paul-based McGough, the project’s general contractor, said that location matters when talking about RBC Gateway. The plot of land on which the new project stands has an important history in the Twin Cities.
A new Nicollet Hotel, though, opened in 1924 at the cost of $3.2 million. This version offered 637 guest rooms in a 12-story building. Again, notable figures stayed here, including John F. Kennedy, Dwight Eisenhower and Harry Truman. Musicians such as Glenn Miller, Tommy Dorsey and Artie Shaw played in its Min nesota Terrace lounge.
This land once served as the home of the Nicollet Hotel, originally built in 1858. Named for Joseph Nicollet, a French geographer famed for mapping the upper Mississippi River basin during the 1830s, the hotel quickly became a Minneapolis landmark. It provided lodging to such notable figures as John Pillsbury and William Washburn, a U.S. Senator serving Minnesota.
In 1922, Minneapolis city inspectors ordered the hotel’s owners to install a sprinkler system. The owners decided that this was too expensive. One year later, construction crews demolished the hotel.
Over time, though, the hotel began to age and become obsolete. In 1991, it was demolished for good.
When McGough began building RBC Gateway, the former home of the hotel was a parking lot with a bus station. It was hardly an inspiring transition point from downtown to the North Loop neighborhood.
RBC Gateway, though? That has revitalized this important piece of land. It’s also a much more welcoming transition point between the busy hubs of downtown and the North Loop.
“I remember being there the day they knocked down that big bus station,” Kreutziger said. “At the time, we weren’t even sure what we were going to build. I think the name ‘Gateway’ reflects both the nature and location of this project. You are right there on the river. The Hennepin Bridge is there. To the west, you have the North Loop neighborhood, a prestigious place to hang out. This project is such a nice bridge between the business district and North Loop.”
A beacon in downtown
Kreutziger said that RBC Gateway, with its shimmering glass facade, has already become a landmark on the north side of downtown. The property also acts as an extension of the Minneapolis skyline, Kreutziger said.
The location, and the views it offers, are a prime draw to office tenants, Kreutziger said.
“There is not a bad view from that building,” Kreutziger said. “You can see the river. You can see the downtown skyline and the sports stadiums. There’s not a bad view in the house. Then there’s the fact that this is a state-of-the-art facility with highend finishes. You walk through those lobbies and it just feels clean and new. If you work in an office, your space is associated with other great names such as Four Seasons. It’s a nice, clean, upbeat and stylish place to go to work every day.”
The office market has been struggling since COVID-19 first grabbed headlines in early 2020. Companies are still trying to bring their workers back to the office. Others are puzzling out how much office space they need today.
Kreutziger, though, said that higher-class buildings with top amenity packages, such as RBC Gateway, are performing well today, despite the challenging office sector. Companies that are looking for new office space are more frequently choosing Class-A buildings in walkable neighborhoods that offer a host of amenities for their workers.
That description fits RBC Gateway. It’s why as of the writing of this profile, most of the office space in the property has already been leased, with namesake tenant RBC taking up much of it.
“Everyone expects that buildings like this will bring workers back to the office,” Kreutziger said. “We are starting to see it already in downtown. We were down there through the thick of the pandemic. It was extremely quiet. Now you already see more of the hustle and bustle returning. The Skyway is getting full again. You’re grabbing lunch and it is flooded with people. It is an exciting, energetic vibe, and RBC Gateway is contributing to that.”
Why has the office space in RBC Gateway leased up so quickly? Katter points to its quality. The space features 10-foot ceiling heights and floor-to-ceiling windows. Conference rooms are equipped with the latest technology.
Location matters, too. As Katter says, RBC Gateway is located near plenty of restaurants. A public park is nearby. Monthly parking spaces are within a short walk of the building.
This combination of amenities and a walkable neighborhood makes RBC Gateway an attractive destination for office users.
“It’s just good office space,” Katter said.
Katter said that the timing of RBC Gateway mattered, too. It was important to bring a new office, hospitality and residential project to downtown Minneapolis during the height of the pandemic. It was important to do this, too, following the protests surrounding the murder of George Floyd.
“We were having a tough time. The whole world was having a tough time,” Katter said. “Having this property delivered during that timeframe didn’t resolve any of those other problems. But it did help create some positive energy in the community. It was a source of energy during the pandemic seeing that building go up. It inspired me to get to work during the pandemic.”
Kreutziger said that the Four Seasons hotel portion of RBC Gateway is a draw for downtown Minneapolis, too. Kreutziger and his team worked on the Four Seasons portion of the building when construction moved to the interior phase of the development. This meant that he worked daily with the Four Seasons staff.
What he saw from these staffers was impressive, he said.
“It is impressive when you see what they do to take care of their guests and to make sure that the hotel is functioning at the level they expect,” Kreutziger said. “Their standards are amazing. They offer a whole new perspective on hospitality.”
The Four Seasons’ amenity deck is especially impressive, Kreutziger said. During a grand-opening event, the construction and development teams celebrated on the deck. The outdoor pool, spa tub, greenery, fire pits and lounge chairs bring a true resort feel to downtown Minneapolis, he said.
Overcoming the challenges
Now that RBC Gateway and the Four Seasons hotel are open, Kreutziger can look back at the challenges that the construction and development teams both faced. The biggest was working through the height of the pandemic and dealing with the materials delays that this brought.
“Coordinating 500-plus people on the job site every day with a global pandemic going on was a challenge in itself,” Kreutziger said. “Making sure we were running a safe and clean site was not easy. I credit our superintendents and field staff. They were all over it. We never faced any shutdowns.”
And not only did McGough and United Properties have to work through materials delays, they also had to navigate the challenging process of getting these materials to a worksite in downtown Minneapolis.
The RBC Gateway job site spanned roughly one city block. That’s a small working area. Getting materials to the site entailed planning truck deliveries down to 10-minute intervals to make sure that the site’s tower cranes could efficiently move materials from one side of the job site to the other.
“What it came down to was planning, planning, planning,” Kreutziger said. “Every morning, the field staff would meet. We would walk through the big deliveries we were expecting. What is the tower crane going to be doing throughout the day? Everyone knew daily what was scheduled to be happening. At the height of construction, we got into evening deliveries. Guys were working night shifts. That was the best time to keep things on schedule and on track. You get creative with the process and develop a plan to make it work.”
The importance of connectivity
One of the key amenities that office tenants demand today? Connectivity that never fails. That’s where Andrew Masur, owner of Minnetonka, Minnesota-based Mobili-Fi, LLC, comes in.
He was tasked with designing the Distributed Antenna System -- better known as DAS -- that provides voice and data connectivity for the tenants of RBC Gateway.
The key here is that A DAS network isn’t the same as Wi-Fi service: A DAS is a network of antennas that sends and receives cellular signals. This means that workers and guests at RBC Gateway will be able to make and receive calls, search the Internet and text their co-workers and friends without worrying about less-reliable Wi-Fi going down. As mobile connectivity becomes ever more important, A DAS network provides a more consistent, reliable and secure wireless service, one in which tenants and employees are far less likely to experience disruptions.
United Properties was so committed to providing the best wireless service that the developer commissioned Mobili-Fi to serve as the consultant on all mobile aspects of RBC Gateway.
This included making sure that RBC Gateway was fire-code compliant with the wireless needs of emergency responders such as the local fire and police departments. As Masur says, public-safety officials will rely on RBC Gateway’s public safety DAS (aka ERRC or ERRCS) once they enter the property. It’s important, then, that their two-way radios and other communication systems function properly on the site. A public safety DAS ensures that this will happen.
Just as important, though, is the cellular service that tenants receive on site, Masur said. It’s both a public safety issue from the perspective of being able to call 911, but also almost a must-have for future prospective tenants.
“It was important to United Properties that there was a Class-A cellular experience at this building,” Masur said. “Most developers today view cellular coverage in a building as a utility, not just an amenity.”
When designing RBC Gateway’s DAS network, Masur held extensive discussions with cellular carriers, brokering the contract language for all three major carriers to participate in the system. This included working with them to make sure that each carrier was happy with the design of the network.
This involved sending the carriers the specifics of the network design, making adjustments as requested and coordinating all onsite vendors to install the final product. The carriers then reviewed the network design, bring in their own group of preferred vendors and require a signal test sight walk and closeout before deeming it acceptable.
“At the end of the day, we built out a distributed antenna system that would serve both public safety officials and the tenants of the building,” Masur said.
What’s unusual about RBC Gateway’s DAS is that one network serves both local public-safety entities and the tenants and guests of the property. This is rare because the public-safety AHJs, or authorities having jurisdiction, often don’t want to share DAS networks. Masur, though, educated the local AHJ about how RBC Gateway’s network is unique in architecture, and showed them that the public safety DAS could remain fully functional even if the cellular/carrier DAS providing service were to lose functionality.
This saved significant money for United Properties: Instead of having to install two separate DAS antenna networks, the developer now only needed to focus on one.
This doesn’t mean that getting the DAS network designed and approved was an easy task. Mobili-Fi faced some significant challenges. For one, construction on RBC Gateway started in 2019. Then the COVID-19 pandemic hit. Shortly after that, protests and violence broke out in downtown Minneapolis following the murder of George Floyd.
Because of these issues, the cellular carriers with which Masur was negotiating lost their focus on indoor coverage and in this case, the RBC Gateway project.
“The carriers weren’t as interested in making sure we had in-building coverage,” Masur said. “They were worried about people working from home and providing additional outdoor service. We solicited the carriers in 2019. We didn’t hear a thing from them after COVID hit.”
But Masur was persistent, as was United Properties. Construction of the building continued throughout the pandemic. And Masur continued reaching out to the carriers. Eventually, the local cellular carriers approved the DAS network. Today, that network is functioning as it was designed, providing uninterrupted coverage to the building’s tenants.
“It was definitely a battle, but the carriers did come in and participate,” Masur said. “It was a unique situation with the politics, the riots and COVID all happening in the middle of the project.”
Building tenants now have reliable connectivity throughout the RBC Gateway property, Masur said. And this coverage remains consistent no matter where on the property employees and guests roam.
“With regular Wi-Fi service, you typically don’t have problems when you’re on the main floor of a building,” Masur said. “It’s when people get on the elevator or go into the parking garage. That’s where you lose coverage if you don’t have a DAS network in place. You’ll drop a call in the elevator lobby or when you’re walking to your car in the parking lot. We all know the pain of being on a Wi-Fi call and suddenly that call drops off. If building owners want reliable service, they need redundancy. If Wi-Fi is failing, the cellular service can take over.”
A first-class hotel
RBC Gateway is more than an office building. It’s also home to the Four Seasons Hotel Minneapolis and private condominium residences operated by the Four Seasons company. This portion of the tower is important, too, providing both top-class living and lodging facilities in this section of downtown.
Florian Riedel, general manager of the Four Seasons Hotel Minneapolis, says that this lodging is more than just a hotel: He says it is a beacon, one that draws people together.
It also draws people to downtown Minneapolis. The Twin Cities’ urban core offers plenty of quality hotels. But the Four Seasons brand is different. It signifies luxury. And it’s a declaration that downtown Minneapolis now offers a world-class hotel, one that wouldn’t be out of place in any international destination.
“We are so happy to be here, and we’re filled with a great sense of possibility for the future,” Riedel said. “Even before opening our doors on June 1 of last year, we made a commitment to our community to be the change we wish to see in Minneapolis and the world. This starts with being a great neighbor.”
Riedel said that the Four Seasons is also targeting new business that has previously gone to other cities.
“We are very confident about what we can do, and we have a great story to tell,” Riedel said. “One of the very best urban Four Seasons Hotels in our portfolio is in a vibrant community with wonderful people, an incredible food scene and world-class activities. This is a winning combination. We will be bold in telling our story. It’s how we elevate our market, boost tourism in the area and attract new business to the Twin Cities.”
What amenities set the Four Seasons Hotel Minneapolis apart from competitors? Riedel points first to its location.
The hotel sits close to the Mississippi River, sports stadiums, concert venues and the always busy North Loop neighborhood. As Riedel says, guests are a short walk away from countless activities.
It helps, too, that the hotel is in a mixed-use building, Riedel said.
“That makes it a great place to bring people together,” he said. “Residents, guests, office tenants, neighbors, visitors to our restaurants, cafe and spa, they are all gathering here.”
The hotel is a go-to location for area businesses, too. Its entire second floor is ded icated to event and meeting space, and each room on this floor comes equipped with high-end technology. This second floor connects to the Minneapolis Skyway System, weaving the hotel into the heart of the city’s downtown.
The hotel is also home to high-end dining options, another perk. The Mara Restaurant & Bar offers the culinary creations of chef Gavin Kaysen, a native of Minneapolis and a James Beard Award winner.
Through April 1, guests can also dine at the seasonal Nordic Village at Riva Ter race, which the Four Seasons’ website describes as “Minnesota meets the Italian Alps.” The Socca Café provides a third dining option at the Four Seasons. This casual space offers high-end carry-out items ranging from pastries to grain bowls to Sicilian pizza squares.
Of course, the Four Seasons isn’t just a hotel. It also offers private condominium residences. These, too, are another boost to downtown Minneapolis. These resi dences are filled with the higher-end amenities designed to bring people back to live full-time in the city’s urban center.
As Riedel says, residents of these condominiums have access to all the amenities offered by the Four Seasons Hotel Minneapolis, including a spa, indoor and out door pool, state-of-the-art fitness center and security staff.
“Above and beyond that, our residents have the best views in the city from their own heated terraces and the best staff in the business,” Riedel said.
This staff is led by Mark James Syputa, director of residences at the Four Seasons Hotel Minneapolis. Before taking this position in Minneapolis, Syputa worked at Four Seasons hotels in Abu Dhabi and Riyadh and the Ritz Carlton in Chicago, among other high-end lodges.
What led the Four Seasons to Minneapolis and this location? Riedel says that it started with the vision of United Properties and the Pohlad family.
“At Four Seasons, our mission is to put into practice the Golden Rule, treating people as we want to be treated,” Riedel said. “We felt a kinship with them there. You could say that before we aligned on the business side, we were aligned in terms of our values. Our companies abide by the same principles.”
Riedel said that he is also excited about taking part in the rejuvenation of downtown Minneapolis. He says that the urban center of the city is fortunate to be supported by a strong business community.
“There are so many local leaders with a growth mindset, people who truly care about making a difference and embodying our state motto, ‘The Star of the North,’” Riedel said.
RBC Gateway
Developer: United Properties
General contractor: McGough
Design consultants: Kimely-Horn and Associates, Inc.
Architect: Smallwood
Hotel: Four Seasons Hotel Minneapolis
Mobile solutions: Mobili-Fi
Geotechnical
Construction
What’s behind the success at this building? A $7.5 million renovation, completed at the end of 2021, helped. So have the amenities, everything from a high-end on-site fitness center to the refurbished lobby with fireplace. And the location, in the highly desirable Edina community, has been a bonus, too.
But Eric Anderson, executive vice president with City Center Realty Partners, said that the bulk of this leasing success can be traced back to planning: The owners of this building put in the work to make the space as attractive as possible to tenants and their employees.
“We were pretty methodical in our strategy for The E,” Anderson said. “We set out to buy an asset in a really good location. And we knew we were going to invest in common areas and shared amenities. The amenities we put in create a third workplace. I hate that term, ‘third workplace.’ But we really did focus on creating areas where our tenants can come down and utilize seating that is not in their office. We created these comfortable other spaces for them to work.”
A growing roster
The E’s new tenants are Addison Group; Therapy Suites; Tressler Law Group; and Edina Chamber, Explore Edina and Innovation Lab. Relievant Medsystems and Mitsubishi HC Capital America were the first tenants to move into the building, having completed their tenant improvements last fall.
Other previously announced tenants are Spell Capital and Employer Solutions Group. City Center anticipates that all eight tenants’ offices will be fully built-out and occupied by late spring.
And according to a press release distributed by City Center Realty Partners, the new tenants are not only happy with their space, they are seeing it bring about a steadier stream of employees back to the office.
“It’s fantastic to see our team motivated and excited to come into the office,” said Jim Teal, president and chief operating officer at Mitsubishi HC Capital America, Vendor Services, in a statement. “We’re very happy with Mitsubishi’s new workspace at The E, and also with the well-designed collaborative spaces and terrific amenities. There’s great energy and vitality here already.”
The E’s amenities include an outdoor gathering space; a tenant lounge with multiple seating areas and fireplace; training and conference rooms; a fitness center; and a patio bar.
The E is also home to murals by local artists, a chef-prepared meal program from The Wandering Kitchen and a fleet of shared e-bikes.
“City Center and Contrarian came up with an excellent formula for The E and it’s attracting companies from throughout the greater Twin Cities,” said Brent Erickson, senior managing director at
Newmark, which manages leasing for the property. “The E’s tenants come from the surrounding communities of Edina, Eden Prairie, Bloomington, the West End and downtown Minneapolis. This is bona-fide good news for commercial real estate in the region.”
Anderson pointed to The E’s on-site fitness center as an example of an amenity designed to encourage employees to return to the office. The center boasts spin bikes, a yoga studio, treadmills and rowing machines. The locker rooms include shower areas. The gym even provides towel service for building tenants.
In short, it offers everything that a standalone gym would provide, and might be an enticement to those workers still debating how often they want to return to the office.
“We wanted to create a boutique environment,” Anderson said. “We wanted to give tenants access to the amenities that their employees are looking for today, and we wanted to do that at an attractive price point.”
Anderson said that the results speak for themselves. As he says, tenants are looking for a healthful office environment that fosters team morale.
“The office sector is going through an era of change,” Anderson said. “Employers are looking to bring their employees back to the office. They want and need something that provides energy, something that will make their employees excited.”
Anderson said that The E’s location in Edina is a key, too. This suburban area provides a good quality of life. And The E is located near the top shopping destinations and attractions in the Twin Cities, Anderson said.
“We had looked at a number of other facilities, but The E is a perfect fit for our needs,” said Chris Geyen, chief financial officer with Relievant Medsystems, a new tenant at the Edina building. “The combination of a new corporate office with the building’s shared workspaces and amenities really helps to foster a positive work culture for our employees.”
The office sector still faces challenges, in the Twin Cities and across the country. But Anderson says that he is slowly starting to see more activity in this sector. Yes, vacancy rates are still too high. And, yes, companies still haven’t decided if they’ll need smaller footprints in the future.
But Anderson says that projects like The E prove that buildings that offer the right mix of amenities and location will still attract tenants.
“Remote and hybrid work will be a part of the future,” Anderson said. “But it won’t be as common as what we’ve seen over the era of the pandemic. I think people want to be back in the workplace. Employers want employees back in the workplace. As we start to come into the spring and summer here, I firmly believe that we are going to see greater demand for office space, not less.”