After four years of renovations and no shops, the Dayton’s Project building in downtown Minneapolis opens to the public this week with a new 35-vendor makers market and the return of beloved holiday window displays made popular by the site’s former Dayton’s department store.
The historic 12-story building was scheduled to reopen last year, but the coronavirus pandemic delayed the project and also caused several tenants to back out of leases. A 45,000-square-foot food court is still delayed, as well as long-term retail and restaurants planned for the first floor and skyway levels, said Brian Whiting, president of the development and leasing firm Telos Group.
Still, developers reached a milestone this week with Ernst & Young moving into the Dayton’s Project. Scores of city officials and downtown boosters gathered Monday evening in the renovated 1902 building to see the finished space and to welcome 35 Minnesota arts and crafts artisans and food makers into the temporary pop-up space.
Fifteen of the vendors are Native American and are showcasing Indigenous beadwork, woven goods, clothing and food products in the former JB Hudson Jewelry store on the first floor.
Mich Berthiaume, curator of the newly dubbed Departments at Dayton’s, told Monday night’s crowd that she was immensely proud to showcase Minnesota makers and to honor “every inch of this grand old dame” of a building.
“Dayton’s has always been enmeshed in the community, [and] it was important to bring that focus back to the building and celebrate the remarkable diversity of the local makers across Minnesota,” said Berthiaume, who has curated similar spaces at the Mall of America and for Super Bowl LII.
The Dayton’s building for more than a century was the center of shopping downtown, first with the namesake department store and Macy’s after that.
The 35 vendors in the makers’ market include Jason Kaping’s Pig’s Eye Pottery; Handmod paintings; Molly Pepper sleepwear, handmade Grass Lake Furniture, Steve Wewerka Photography, plus skin care product firms Herbal Alchemy and SJC Body Love.
The artisans and local brands will sell their wares in the newly restored Dayton’s Project building for the next four months.
After a $350 million renovation that spanned four years, the public this week gains access to the first-floor shops as well as Dayton’s basement and the skyway level. The top nine floors of the 1.2 million-square-foot tower will remain private.
Ernst & Young (EY), the building’s only office tenant to date, gave tours Monday night of its new gleaming and open 30,000-square-foot space.
Hundreds of EY workers moved in earlier in the day from their former digs just blocks away at U.S. Bank Plaza. They now have access to Dayton’s indoor winter lounge, outdoor terrace, library and fitness center.
“They are happily now settling into the fifth floor of the building,” said Whiting, of the Telos leasing firm. “I was up there today and it was abuzz with activity.”
In addition to welcoming EY and shops, Dayton’s Project owners announced they will unveil completed Christmas windows on Thursday morning, reviving a Dayton’s tradition.
Thousands came downtown each year to see the windows and shop at Dayton’s for the holidays. Macy’s also decorated the building until it closed in 2017.
One of the largest of this year’s displays — on 8th Street near Nicollet Mall — will feature more than 70 authentic and costumed Dayton’s Christmas bears from Christmases past. People who had saved the bears over the years donated them for the display.
“I think it’s really important and big and very much ‘on brand’ for the Dayton’s Project to bring back an [event] for which people have such fond memories,” said Minneapolis Downtown Council President Steve Cramer. “Of course when my wife and I had kids, we religiously went to theseventh floor to see the huge displays every year. It was an annual rite.”
In 2017, New York-based 601 Minnesota Mezz, 601W, Mark Karasick and Michael Silberberg bought the shuttered Macy’s store and set about a massive renovation to convert it into a tower of commercial offices with retail on the bottom three floors.
While city officials in attendance Monday were excited to see the project moving forward, they concede that Dayton’s hunt for more office tenants comes at a tough time.
COVID-19 remains a problem. Downtown’s office vacancy rate hit 23% in the third quarter, so competition for tenants remains tight, according to commercial real estate firm Cushman & Wakefield.
“I just think the world changed in March of 2020, and all of our expectations have to be recalibrated based on [the COVID-19] reality,” Cramer said. “This [building] is a high-quality property. It isa perfect location and a storied building. Those fundamentals will carry it through.”
Earlier this year, the building’s ownership fell into question when one project lender, Monarch Alternative Capital, accused the building owners of defaulting on their loan. The new owners had failed to find tenants to lease 20% of the building by May 9 and failed to pay the accompanying penalties, according to the loan agreement.
The volley of lawsuits that followed ultimately were resolved in August. 601W and 601 Minnesota secured $208 million in new financing through Winthrop Strategic Real Estate and the Fortress Investment Group.
Monarch Alternative was paid off and is no longer involved in the property.