California Firm to Buy, Renovate U of M Radisson
Los Angeles-based Platinum Equity Advisors, LLC, is continuing to expand its presence in Minnesota with the purchase of the Radisson Hotel at the University of Minnesota's Minneapolis campus.
Susan Weinberg, director of real estate at the U of M, confirmed Monday that the university's facilities committee and board of regents approved a 50-year lease for the two-acre site, which is located at 615 Washington Avenue Southeast.
The university will receive an estimated $36 million over the term of the lease and an additional $1.37 million transfer fee from the current owner, Minneapolis-based Maddux Hotel Corporation.
According to planning documents, an undisclosed affiliate of Platinum Equity is the buyer and Denver-based Richfield Hospitality, Inc., will manage the hotel. Richfield Hospitality is also the company that Platinum Equity chose to manage the Sheraton Bloomington Hotel Minneapolis South, which it acquired earlier this year and plans to renovate and rebrand.
Platinum Equity will make a “substantial investment” in renovating the hotel, which will be upscale and operated independently from the university. Weinberg said that the renovation plans are still being worked out and negotiated but that they will be finalized by the time the deal closes in mid-April.
Weinberg said that under the lease agreement, the renovations must be completed by March 2014-the time the Central Corridor light-rail line is planned to start running through the U of M campus.
Although plans are still being finalized, Weinberg said that the new owners have indicated that they may rebrand the hotel using the university's name and logo.
Platinum Equity was founded in 1995 and has closed more than 100 acquisitions since its inception-including its purchase of Minneapolis-based Genmar Holding, Inc., in January 2010. A company representative reached by phone Monday morning said that the company does not comment on or disclose details about pending transactions.