Opus Development Corporation on Tuesday announced plans to build a nine-story downtown Minneapolis office building that would serve as the new headquarters for Xcel Energy, Inc.
The site is located on the southeast corner of Nicollet Mall and Fourth Street—across from Xcel’s current headquarters. The 212,000-square-foot office building would house approximately 750 of Xcel’s 1,500 downtown Minneapolis employees, the same number of individuals who now work in leased space in Marquette Plaza, according to Xcel spokeswoman Mary Sandok. The remaining employees will occupy the headquarters building at 414 Nicollet Mall.
Minnetonka-based Opus said pending necessary approval, it plans to begin construction in 2014, and the building will be ready for occupancy in 2016. Sandok said Xcel doesn’t yet know whether the new building will be connected by skyway to its headquarters.
“Downtown Minneapolis is our headquarters, and we plan to remain here for the long-term,” Xcel Chairman, President, and CEO Ben Fowke said in a prepared statement. “Leasing space in this new building is a prudent, cost-effective way to consolidate our operations, meet our future space requirements, and create a great environment for our employees. It also underscores our commitment to our partnership with the city and its business and community leaders to revitalize downtown Minneapolis.”
Terms of the expansion deal weren’t disclosed. But David Menke, senior vice president and general manager of Opus Development, told the Star Tribune that it has a purchase agreement to buy the parcel. According to the Minneapolis newspaper, Hennepin County property records indicate that it’s now owned by Baker Investments and has an estimated market value of $4.75 million. The site now houses a private parking ramp that was constructed in the 1960s.
“We are delighted to be working with Xcel Energy and the City of Minneapolis on this exciting development project, which will be instrumental in the continuing vitality of downtown Minneapolis and the redevelopment of the north end of Nicollet Mall,” Menke said in a statement.
The planned office building will be located adjacent to another project that Opus is developing—Nicollet Residences, a 33-story luxury apartment complex. Construction on that building is slated to begin later this year.
That project and the Xcel Energy building are proof that once-struggling Opus has staged a comeback.
Opus was once a real estate powerhouse that employed at least 2,000, and it reportedly had 35 million square feet of space in planning or under construction at its 2007 peak. But it was hit hard by the downturn in commercial real estate markets amid the recession. In 2009, three of Opus’ five regional subsidiaries filed for Chapter 11 bankruptcy and later liquidated—and in both 2009 and 2010, the company was engaged in messy legal battles with creditors and former employees. Opus has since reorganized.