The Commutator/West Hotel project on Second Avenue in Minneapolis’ North Loop has been sitting, unfinished and seemingly untouched, for over two years now. Its complex of historic buildings is wrapped in a Tyvek-like material, waiting for additional construction financing on the complex redevelopment. What was envisioned as a 123-room boutique hotel and lifestyle complex (spa, restaurants), with a $62 million budget, became a financial albatross for its developers, David Wilson and John Gross (dba Commutator LLC), who may lose their investment altogether.

The duo began work on the development—which was to mesh two 19th-century buildings with a new-build modern structure—before the pandemic. That was during a stable interest-rate period, when downtown Minneapolis was not viewed as a high-risk lending environment. One of the buildings, the historic Commutator Foundry, had to be relocated off its foundation for a period of months by an out-of-state specialist contractor.

The financial institution that made the mortgage loan was sold to an entity that no longer wanted the loan, which pushed the developers back into the financing market in the post-pandemic period. At that point, a lender could not be found, and the project fell into foreclosure in 2023. Then, local real estate firm Onward Investors stepped in to carry the mortgage while the developers sought the remaining construction financing.

In early 2024, Gross and Wilson believed they would resume construction at midyear, but a construction loan never materialized. Onward subsequently foreclosed on its mortgage, which was sold for roughly $30 million in a September Hennepin County Sheriff’s sale. The buyer: Onward. Because Commutator has until Nov. 29 to “redeem” the project from foreclosure, Onward declined comment other than to confirm the details in the public record. (Onward is actively accumulating property in the city; it recently bought the Wells Fargo Tower and Ameriprise Tower in downtown Minneapolis.)

In a brief interview, Wilson said the developers continue to work to obtain new financing and redeem the property before it passes to Onward on Nov. 30. Should Onward take ownership, it will have the option to finish the project, rethink it, or find another buyer, though the project’s challenges in attracting completion financing would perhaps render that option remote. (The developers did propose shifting part of the project to apartments in 2021 to better attract financing.)