RBC Gateway Tower Minneapolis opens as most expensive private project

Minneapolis’ newest skyline tower is the most expensive project completed without public funds in the city’s history.

Why is this important: The 37-story RBC Gateway Tower, which partially opened last month, will eventually pay about $6.5 million a year in property taxes that support city services, schools and parks.

Details: The Pohlad family’s real estate company, United Properties, developed the $480 million project at the high-profile intersection of Nicollet Mall, Washington Avenue and Hennepin Avenue.

  • The 508-foot tower has 531,000 square feet of office space, a 222-room Four Seasons hotel, and 34 luxury condos, all priced at least seven figures.

Yes, but: When construction began in 2019, no one had heard of COVID, and the downtown area was teeming with office workers and travelers.

  • With everything that has happened to the city over the past two years, Axios asked United Properties Chairman Bill Katter if he would continue with the project if he knew then what he knows now.

What he says : “If I could go back, I would add 10 more floors of office space,” Katter said during a tour of the building last week.

  • Businesses — wanting a nicer space to attract employees from home — have continued to inquire about availability, Katter said.
  • But there isn’t much left. The office space is already 95% leased, with RBC Wealth Management and the Pohlad Companies occupying most of it.
A conference room at the new RBC Wealth Management headquarters. Photo: Nick Halter/Axios

Condos and hotels face a tougher market. Downtown hotel occupancy ended 2021 at 30% and condo sales were slow post-COVID.

  • Katter said condos are selling better than expected, though he didn’t give specific numbers. An unfinished top-floor condo is marketed for around $10 million, he said.
  • The condos are under the Four Seasons brand, and buyers have access to hotel housekeeping and room service.
  • Katter said UP budgeted carefully for the Four Seasons to become profitable — it has a five-year plan.

Chuck Lutz, a long-time Minneapolis development official, served as resource person on the city project before retiring.

  • The only non-stadium project with a higher price tag that he remembers is Wells Fargo’s five-block redevelopment next to U.S. Bank Stadium, which cost $600 million but included public financial support.

What awaits us: The hotel opens in June. Even if you can’t afford the $525 rooms, you can still eat at the Four Seasons restaurant and visit the spa.

A view of Minneapolis from the top floor penthouse condo of the new RBC Gateway Tower.
A view of the penthouse condo on the top floor of the new RBC Gateway Tower. Photo: Nick Halter/Axios

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