With all of this recognition, new development, and increased growth, we wanted to catch up with the voices of TPT's Lowertown 2011 program, all prominent neighborhood figures, to hear their thoughts on the fast growth these past three years in the neighborhood. Our first interview was with David Fhima, executive chef at FACES Mears Park. The second interview, seen below, was with John Mannillo, commercial real estate developer and chair of the Capitol River Council Development Reviews Committee.
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| John Mannillo |
I met John for our interview at the Pioneer Endicott building, and we chatted while David Williams, the Corporate Leasing Manager, gave us a tour of the restored space. As we walked through the building, John supplied us with fascinating historical information. Can't wait to share it with you, Enjoy!
Having arrived to St. Paul in 1975, John Mannillo saw Lowertown while it was a "dark, sort of depressing area of buildings that were underutilized or vacant." Thankfully, as previous St. Paul mayor George Latimer stated, "John Mannillo really saw the potential of Lowertown long before urban planners did." With this future vision in mind, John purchased the Pioneer and Endicott buildings in January of 1978 for $4 million from the Davidson brothers, who had owned it since 1909. The occupancy rate at this time was around 80%, reaching a high of 99.3% at one point during John's ownership.
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| From past tenants of the building: a popcorn maker, a sandwich shop sign, a board signed by the early owners. |
As we walk through the halls of Pioneer Endicott, John points to each room and tells us who the previous occupants were. Hairdressers, an eyeglass shop, convenience stores, a post office, banks, a drugstore, and more. He even tells us about the owners of each shop, explaining that everyone in the building was like one big family. There was actually a monthly publication, 'Around The Corridors', which John himself wrote for six years. Around the time of the 99.3% occupancy rate, 1979-1980, tenant Toltz, King, Duvall, Anderson and Associates (now known as TKDA Engineering) wanted to expand by adding another floor to their already four-floor firm. They were a growing company, and John wanted to accommodate to their wishes, but was not able to. The firm moved to the American National Bank, now the US Bank Building.
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| Office at Toltz, King, Day and Anderson, 1973. Pioneer Building Source |
At this point, interest rates hit an all time high (20%), and the building was losing money due to the now vacant four floors. As luck would have it, however, John soon found himself on an airplane with the "...building manager from across the way, who was the Vice President of First National Bank. We were sitting there and he said to me, 'would you consider selling the building?' Because they had a computer corporation ... that was mostly in the empire building, and they needed more space. So I said okay and we made a deal." In 1981 Mannillo sold the building to First National Bank for $5.6 million.
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| Computer Systems Inc. 1968, small portion that was in the Endicott Building. source |
The deal ended up turning into a sale leaseback. "They [First National Bank] hired a management company in Minneapolis who they had a relationship with and then they hired me to run it and do it and do the renovation. At the time you could use historic tax credit, at that time the Federal credit was 25% ... It was a sale leaseback, so they bought it from me, turned around and sold it to another partnership who could use the tax credits, and then leased it back for 25 years. And my job was to continue to manage it."
At this point in the tour my brain is filled with new historical information, and I need a moment to comprehend it all. Thankfully, John decides to tell a funny story about what happened next:
The occupancy rate was down to 80%, which made it easier to move current tenants around while doing renovations. This renovation, by the way, was likely the largest historic renovation at the time for tax credits, and took 10 months to complete, with around the clock work in three different shifts. The total came to $14.5 million. Anyway, at one point during this renovation, one tenant, a hair dresser, refused to move. He honestly would. not. move. So, John and his crew came in with a crane from the street, took out the window, and removed him. Then they fixed it up, and the tenant moved back in and was happier than ever!
I immediately realize that the tenant's reaction is probably a very familiar one; people do not like change, especially at first. But once it's over and done with, they are glad it happened. In my opinion, that seems to be the case with much of the renovation and reconstruction of Lowertown. John immediately validates my thoughts: "People didn't want the change, but when it was all done, they were happy."
Back to the story!
Turns out, the problem with a sale leaseback, is that after the lease begins to run out, no one wants to continue putting money into the project. The responsibility for reinvestment, in this case, was the bank's, and they didn't own it. So, the building slowly declined to the point where the last few tenants moved out. Then, "a fella who bought the First National Bank, called Mike Kelly from Chicago, bought the building for basically very little ... was going to look at, basically one point, just tearing it down ... they tore down the chimneys on the roof this building, like 30 of them ... it was sort of falling down because of lack of maintenance. Finally enough people got involved and said it had to be saved [hurray!!!!] ... From there Richard Pakonen and his Partner [Clint Blaiser], bought it and they're doing what they're doing. And it makes a lot of sense." We agree!
John had plenty more stories and fun facts, but, for the sake of your precious time, I've turned that information into a different blog post. I hope that this 'story' has given you a deeper insight into the history of the Pioneer Endicott buildings, and has allowed you to feel a bit closer to our little gem that is Lowertown.
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