Nate has written a couple of times about the new bar downtown, Barfly, in the old Skyway Theater building. I haven’t been there yet, but it sounds like if I don’t go soon, I won’t get a chance. An article in the Star Tribune on 8 Nov 2004, talks about the owners of the building fighting with each other over its fate. One of them wants to demolish the whole building and up put up a 40-50 story condo tower. The other, who owns Barfly is against it. Personally, I think the Skyway Theater building is incredibly ugly. I’m not a huge fan of the idea of a new condo tower, but I would not be sorry to see the building that’s there now go. I used to go to the Skyway Theater once I was regularly coming downtown from rural/suburban Farmington. The last movie I remember seeing there was Jacob’s Ladder with Tim Robbins. I remember being fascinated with the way its seats were arranged. They were built more up and down than backwards from the screen. So due to space limitations, it had stadium seating before stadium seating was big. It was an interesting theater, but its time has passed. I’ve generally been against tearing down old buildings to put up new ones, but I was only slightly sad when they tore down the Central Library, and I won’t shed a single tear for the Skyway Theater building if it goes the way of the dodo.

Clicky clicky for further information about the story:

Movie theater melodrama
Terry Fiedler, Star Tribune
November 8, 2004 REAL1108

Jim Graves, the developer of the Le Meridien hotel on Block E, envisions a sleek 40- to 50-story condo tower at what’s now the Skyway Theater building in downtown Minneapolis.

“We think the [Skyway] building is an eyesore,” Graves said. “It is not workable aesthetically or functionally.”

There is a major hitch in his plans, however. Graves doesn’t own the whole building, and the other owner, real estate investor and nightclub owner David Kabanuk, doesn’t have any interest in selling. Kabanuk also is dead-set against Graves’ alternative plan, which would include putting up a wall between their spaces and razing Graves’ 43 percent of the building.

“I don’t think it’s possible,” Kabanuk said. “You can’t tear down half of the IDS building.”

Graves said he’s been told that it is feasible and on Oct. 8, he and his partners filed a lawsuit in Hennepin County District Court seeking, among other things, the right to build the wall and demolish the space.

Moreover, Graves said he has contacted the owners of the Teener building and the Shinder’s building next to his space, and there’s a possibility he could buy those properties once he got the OK to demolish his Skyway Theater space. Together, the properties could provide a large enough footprint for a tower.

Graves and his partner, David Sanders, bought the 719 Hennepin Av. piece of the Skyway building (a little less than 43 percent of the total) for about $700,000 in October 2001. Graves regarded it as a blighted property, prime for redevelopment, a sentiment shared by city officials, and he planned to build a hotel once he acquired the rest of the building.

Graves thought he had an agreement to buy the remainder of the building, but in March 2002, Kabanuk was the highest bidder in a bankruptcy proceeding, paying $1.05 million and besting Graves’ bid by $100,000.

Graves said he has been making overtures since then, including an offer to sell his portion to Kabanuk, to no avail.

Kabanuk said he doesn’t plan to sell and has made substantial improvements in the building. This summer Kabanuk opened a nightclub called Barfly in the Skyway building. He also owns the Tropix nightclub downtown.

Kabanuk would entertain the idea of buying out Graves, but he said he hasn’t received a proposal. Graves disagrees. Adding to the tensions of the dysfunctional marriage is a disagreement over Kabanuk’s management of the building for parties.

City officials have gathered the sides together, hoping an accommodation could be reached, but both parties continue to dig in their heels.

Graves said his condo proposal makes economic sense because demand for urban core condos remains high and interest rates relatively low. At a price Graves estimates at $120 million, the tower would be nearly twice as costly as the Le Meridien and his biggest project to date (he’s also an owner of a Residence Inn downtown). Such a project certainly would have the potential to be a plum for the neighborhood and downtown.

Kabanuk is open to the idea of redevelopment, but he sees nothing wrong with the Skyway at present.

“To say this is not a viable building is just incorrect,” he said.

Terry Fiedler is at tfiedler@startribune.com.

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