01.28.25

MinnPost: Could the Northstar Center be a ‘poster child’ for future office-to-residential conversions?

The MinnPost article highlights the transformation of the Northstar Center in downtown Minneapolis into Groove Lofts, a 216-unit mixed-income apartment complex, as a “poster child” for office-to-residential conversions in the post-pandemic era. With downtown cores struggling due to increased remote and hybrid work, repurposing vacant office buildings is seen as a critical strategy to revitalize these areas. Such projects are often complex and require favorable conditions to succeed. Groove Lofts at Northstar Center, completed by Sherman Associates, took three years to convert the largely vacant Northstar Center into a mixed-income residential building. Forty-four of the units are reserved for tenants earning less than half of the median wage. The project benefited from historic tax credits, a central downtown location, and a building structure suitable for conversion. The $98 million development was made possible through significant subsidies, with approximately $35 million coming from federal, state, and city sources. The converted building features unique designs, with over 40 different floorplans due to its original office layout. It also boasts 10,000 square feet of amenities, including a fitness center, media lounge, arcade, coworking spaces, and a rooftop deck. Additionally, Groove Lofts is connected to Minneapolis' iconic skyway system, linking residents to key downtown destinations like Capella Tower and Wells Fargo Center. Experts emphasize that successful conversions depend on factors like floorplate size, building framework, and access to natural light. Older buildings, which often have smaller, more straightforward floorplates, are typically better suited for residential adaptation. In contrast, newer buildings with larger or irregular floorplates present more challenges, often requiring extensive structural modifications. Carole Mette, senior developer for the project with Sherman Associates, and Bill Baxley, a Minneapolis-based principal at architecture firm Gensler, agree that such conversions provide economic benefits beyond revitalizing downtown areas. They generate more labor than new constructions and increase the tax base, even if residential buildings yield lower tax revenue than fully occupied office spaces. However, both stress the importance of financial incentives and strategic experimentation to ensure these projects are viable. Groove Lofts demonstrates how thoughtful planning, financial support, and creative design can turn underutilized office spaces into thriving residential communities, providing a roadmap for other cities grappling with similar challenges. Read the full article: https://www.minnpost.com/metro/2025/01/could-the-northstar-center-be-a-poster-child-for-future-office-to-residential-conversions/