Couple aim to build hotel on their parking lot near Vikings stadium

Michael and Ann Roess have owned their commercial retail and office building and adjacent parking lot at 903 Washington Ave. since 2004. They want to build a 10-story, 136-room hotel on the parking lot, two blocks north of the U.S. Bank Stadium in Minneapolis. Staff photo: Bill Klotz

Couple aim to build hotel on their parking lot near Vikings stadium

By: Hank Long Hank Long December 23, 2015 6:50 am

Michael and Ann Roess directed tailgaters into their parking lot for hours on Vikings game days when the Metrodome was still open.

They considered it a family affair, with their two daughters also guiding fans to the lot next to the Roesses’ 903 Washington Ave. retail and officebuilding in Minneapolis. The property is two blocks north of the future stadium.

Now with the U.S. Bank Stadium nearing completion on the former Metrodome site, and the Ryan Cos.-led $450 million Downtown East project well underway, the Roess family has new plans for the lot.

They want to build the Stone Arch Hotel, a 10-story, 136-room proposal they’ll submit to the city in the first quarter of 2016.

The Roesses expect the hotel, a half-mile south of the historic Stone Arch Bridge, to open by the 2019 NCAA Men’s Basketball Final Four championship. By then their hotel could be just one of several existing and new hotels in and around Downtown East, including the Aloft Minneapolis that sits across the street. More than 600 new hotel rooms are planned or are under construction in the neighborhood.

Even so, the Roesses aren’t fazed by the competition.

They plan to connect the future hotel to their building, which now houses the Fusion and Sanctuary restaurants on the southwest corner of Washington and 10th avenues. The new project would also include a first-floor 5,500-square-foot restaurant, separated from the restaurants in the 903 Washington building.

They want to break ground on the boutique-style hotel byfall 2016. While it’s possible the hotel would open in time for the Super Bowl in February 2018, Michael Roess said he won’t take short cuts on a property his family plans to own for a long time.

“We want this to be a legacy building for us,” Michael Roess said. “Initially, we were focused on the Super Bowl, but we really just want to do this right.”

Since they purchased the 15,000-square-foot building in 2004, the Downtown East neighborhood has undergone a dramatic real estate transformation – and it’s not just the new stadium driving it. Wells Fargo is moving workers next year into more than 1 million square feet of new office space built by Ryan.

This is the couple’s first hotel project. In 2007, Michael Roess converted the former Whitney Hotel into Whitney Lofts condos at Portland Avenue and Second Street, just west of the Mill Street Museum. They own several commercial properties in the Twin Cities, including office-retail properties in Woodbury and Burnsville.

The Stone Arch Hotel project comes at a time when the competition has already teed up other “soft brand” hotel projects with national banners. Graves Hospitality plans to build a 150-room Marriott-brand Moxy Hotel at the southeast corner of Chicago and Washington. To the west, Mortenson is planning a 188-roomHyatt Centric hotel at 800 Washington Ave. S. Carlson Rezidor is building a 164-room Radisson Red at 609 Third St. S., which is expected to open by fall 2016.

The Roesses are in the process of securing an independent hotel operator that will help the Stone Arch Hotel stand out as a locally owned property that connects guests with the history and culture of the area.

“We have been in Minneapolis pretty much all of our lives. We know this city very, very well and we want to our guests to feel like they are part of that story,” Ann Roess said.

The project has received a letter of support from the Downtown Minneapolis Neighborhood Association. She recently joined the organization’s land use committee, after the project was reviewed.

While city officials are in early talks with the couple on the hotel project, no planning application has been submitted, said Matt Lindstrom, city spokesman.

As of November, hotel occupancy in downtown Minneapolis was nearly 75 percentand is projected to continue at healthy levels through 2017 despite the addition of hundreds of rooms, according to a Downtown East market study the city commissioned from Minneapolis-based Perkins + Will.

While the study projects the Downtown East market will be a “hotbed” for hotel development and consumer demand over the next few years, that market might soon be overbuilt, said John Sheehan, principal of Blaine-based Commercial Realty and Consulting.

“When everything that is planned for that area comes on line, I think it’s going to become an extremely competitive market, to the point where rooms are almost going to become a commodity,” Sheehan said.

The city’s Community Planning and Economic Development Department has seen a cluster of hotel projects proposed in and around Downtown East in recent years, but not every project has come to fruition, said Beth Elliot, a long-range planner for CPED.

“We’ve seen a lot of renderings of hotels,” Elliot said. “We are just going to continue to watch and see what is proposed.”

Michael Roess believes the hospitality demand in Downtown East will continue to grow, well beyond game days at the new Vikings stadium.

“There is so much that is happening here with new office development and the new stadium; so, in terms of long-term demand, we think there’s a lot to be excited about,” he said.

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