Mortenson pays $4.8M for site of future hotel

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Golden Valley-based Mortenson Development paid $4.8 million for a downtown Minneapolis property that will be developed for a hotel, according to a certificate of real estate value that became public Tuesday.

The property at 401 Hennepin Ave. S. has been used as a commercial parking lot since 1986, according to city documents. Previously, it was site of the 10-story Andrews Hotel.

As Finance & Commerce has reported, Mortenson plans a $48 million, 244-room AC Hotel by Marriott there.

Earth work at the site begins next week. Mortenson will use a lot of the same crew members from another Mortenson project, the 30-story 4Marq apartment tower under construction at 400 Marquette Ave. S., because it’s also a concrete building.

“We’re hoping it will create new vibrancy on Hennepin Avenue,” Bob Solfelt, vice president and general manager for Mortenson Development, said Tuesday.

The new hotel is scheduled to open in 2016.

According to the CRV, the property buyer is 401 Hennepin Property Owner LLC, an entity connected to Mortenson. The seller is UGP-Nicollet LLC, an entity related to Urban Growth Property Trust in Chicago.

The property has a taxable market value of $3.323 million, according to Hennepin County property records. No additional sale information was on file for the property.

Mortenson announced its plans for the nine-story AC Hotel by Marriott in November.

“AC Hotels by Marriott cater to the experiential traveler, providing a sleek and sophisticated hospitality design with customized service,” Mortenson development executive Nate Gundrum said in a statement. “We believe this brand is a natural fit for the culture and vibrancy of the downtown Minneapolis market. At the crossroads of the downtown core and the Warehouse District, this location will empower guests to experience and feel the city.”

Designed by ESG Architects in Minneapolis, the hotel will be the first AC Hotels by Marriott in Minnesota, and the second downtown hotel ESG has designed for Mortenson, the company said at the time.

The first was the Hampton Inn & Suites at 19 N. Eighth St.