Three years after a low bid put his company out of the running to purchase Calhoun Square, local developer Stu Ackerberg is getting a second chance.
Ackerbeg, CEO of Southwest development company The Ackerberg Group, submitted a bid this month for the Uptown shopping center at Lake Street and Hennepin Avenue, which owner Principal Real Estate Investors of Des Moines put on the Market in March.
“Calhoun Square is an important property in the Uptown area, and we think we have some fun ideas for it,” Ackerberg said.
Principal paid more than $28 million for the property in 2004, according to Hennepin County property information. The company also spent millions of additional dollars acquiring nearby properties.
A $75 million condominium and retail revamp was originally planned to begin last spring, but a slow housing market and subsequent development revisions delayed the project.
The Minneapolis office of CB Richard Ellis is marketing Calhoun Square. No asking price was formally set, and bids were due April 13. George Good, an executive vice president with CB Richard Ellis, declined to comment on buyer interest, offers or the method of selecting a new owner.
The asking price for Calhoun Square is rumored to be around $50 million.
Jeff Herman, president of commercial real estate company Urban Anthology, said the value of the property is really dependent on the buyer’s intent.
“On the surface, the property does not justify a $35-$40 million investment,” Herman said. “But it all comes down to the aggressive plans for development and how realistic those plans are for the property and the neighborhood.”
Ackerberg said he was unsure how the “winning” bidder would be chosen.
“I don’t know if they simply look at the price or if they say ‘who is the best buyer to really get this building back in service,’” Ackerberg said.
Ackerberg said the mall is in worse shape today than it was when it last sold. Many of the center’s retail spaces are vacant, including the large former Borders Books space, and some existing tenants have complained about languishing retail.
If he purchased Calhoun Square, Ackerberg said he would “immediately get back in front of the neighborhoods” to create a development the community was happy with. He would also adjust the development plans so they were more compatible with the market, he said.
“There’s no question the condominium market has changed,” Ackerberg said. “We need to really understand all the market segments and come up with a mixed-use project that will really work.”
The Ackerberg Group is also involved in Mozaic, a large condominium, hotel and retail development planned for Lagoon and Fremont Avenues. Owning Calhoun Square would strengthen the center’s synergy with Mozaic and other Ackerberg Group properties in the area, Ackerberg said.
Many community members support an Ackerberg-owned Calhoun Square.
“I think it’s good that somebody local who knows Uptown very well is in the running,” said Aaron Rubenstein, Calhoun Area Residents Action Group (CARAG) board member and zoning committee chairman.
Rubenstein said the community has to be prepared to look at making significant changes in Uptown to reinvigorate the area, and what happens at Calhoun Square is a major part of that.
Darrel Besikof, owner of longtime Calhoun Square store Bay Street Shoes, said out-of-town ownership has been a problem for the mall, and Ackerberg has earned a reputation in the area as a builder of “thoughtful and appropriate” developments. He said he would be glad to have the developer own Calhoun Square.
“I was disappointed when he didn’t buy it last time,” Besikov said.
City Council Member Ralph Remington (10th Ward) said Ackerberg has been a good partner in the community and “one of the most pleasant people to work with.”
Ackerberg said being able to afford Calhoun Square and make it work in the community and real estate market is a hefty challenge, but he’s not shying away from what he sees as a great opportunity.
“I’m glad I have another bite at the apple,” he said. “And it’s like my dad always said, ‘I’d rather be wrong than nothing.’”
During the last 40 years, The Ackerberg Group has developed, owned or renovated more than 4,000 apartment and condo units and more than 7 million square feet of retail, office and industrial property, according to the company’s website at www.ackerberg.com.
Reach Jake Weyer at 436-4367 or [email protected].