Posted: 7:40 am Wed, January 4, 2012
By Burl?Gilyard
Tags: Cindy Sherman, Dan Fasulo, Gresser Cos., Mike J. Gresser, Real Capital Analytics, Steve Hoyt, Ted Bigos, Ted Gonsior
Developer Steve Hoyt previously controlled an 89-acre Brooklyn Park site but lost control of the land to TCF Bank, which just sold it to a new owner. A Hoyt Properties sign still stands there. (Staff photo: Bill Klotz)
Amid the tough times in commercial real estate, developer Steve Hoyt lost control of a large development site in Brooklyn Park to TCF Bank. Now a group that includes some of Hoyt?s former investors has paid TCF $4.75 million for the 89-acre site at the southwest corner of Highway 610 and Highway 169 in Brooklyn Park.
The sale closed last week.
The new owner is an entity called Re-Load Investments LLC. The LLC is listed to an Eagan address matching the address of contractor Gresser Cos. Inc. Hoyt, who filed for Chapter 11 bankruptcy in May, listed Mike J. Gresser as a creditor and identified Gresser as an investor in the Stone Arch Fund I, a fund that Hoyt assembled to buy the Brooklyn Park land.
On Tuesday, Gresser could not be reached for comment about the deal. Hoyt, the chief executive officer of Minneapolis-based Hoyt Properties Inc., did not return phone calls seeking comment.
It remains unclear when any project would move forward on the site, which is kitty-corner from Minneapolis-based Target Corp.?s Northern Campus.
The site, which has no assigned address, includes eight vacant parcels of land. The city of Brooklyn Park previously approved a development plan for the ?Gateway? project calling for 1.2 million square feet of office space, more than 500 units of housing, a 200-room hotel and some retail space.
Dan Fasulo, managing director with New York-based Real Capital Analytics ? a company that tracks global investment sales ? said he has not seen many land deals in areas like the Twin Cities because there?s still not much appetite for new development.
?The financing is not there for any of these huge mixed-use projects, unless you?re sitting in the middle of Manhattan,? Fasulo said.
Nationally, Fasulo notes that the Minneapolis-St. Paul area is considered a secondary market for investors. In most cases, he said, land is being unloaded at a fraction of the prices it would have traded for five years ago.
?We?ve seen massive discounts,? Fasulo said.
Across the country, Fasulo said his group tracked $5.4 billion in land deals in 2011. That?s only about 15 percent of the $34.9 billion in land sales in 2007. For land transactions, Real Capital Analytics tracks deals of $2.5 million or more for land that has secured approvals for commercial development.
Ted Gonsior, a broker with the Minneapolis office of Colliers International, represented TCF in the deal. Gonsior declined to comment. A representative of TCF Bank could not be reached for comment.
Holding vacant land for future development can be complicated for developers. Vacant land generates no income to offset the carrying costs of holding a site.
In September 2010, Hoyt told Finance & Commerce that his group paid $10 million for the site in 2006. The group had a $5 million mortgage with TCF. Hoyt?s group bought the site from the Living Word Christian Church, which had once planned a campus on the site. At the time, Hoyt said his group included 21 investors.
It?s not clear how many of the former investors are part of the new ownership group.
Ted Bigos of Golden Valley-based apartment owner Bigos Management Inc. was an investor in Hoyt?s group but said he was not involved in the new deal.
?Representatives from the former investment group bought it back. I don?t know who that includes, but that?s what I was told,? said Cindy Sherman, planning director for the city of Brooklyn Park.
Sherman said the city has already approved a development framework for the site.
?There?s an approved development plan for the property called Gateway ? it?s ready for redevelopment,? Sherman said.
Sherman said a prospective developer would still need to go through the site plan review process by submitting building and landscaping plans.
Last summer the Minnesota Department of Transportation completed a nearly three-mile extension of Highway 610, a new connection between Highway 169 in Brooklyn Park to County Road 81 in Maple Grove. Highway 610 runs along the northern border of the Gateway site. Target has also announced plans to expand its nearby Northern Campus.
Fasulo said that investors buying land today are banking on improving fortunes for commercial real estate.
?This is kind of the time when you would start to prepare for the next cycle,? Fasulo said. ?As far as new development, I don?t see the demand there yet. Maybe for some rental apartments.?
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