On St. Paul’s West Seventh Street, new owners plan to take a German-style beer hall built in 1935 into the future.

Their big plan is simple: sweep the floors, wipe the tables and find a good German restaurant to serve food and beer.

Beyond that, owner Craig Cohen said he has no desire to alter history, which has been carefully preserved in the long-vacant basement of the Jacob Schmidt Brewery’s Rathskeller building.

Cohen, who is also redeveloping the neighboring Keg House into a row of indoor and outdoor restaurants dubbed the Keg and Case Market, will acquire the Rathskeller building from the city of St. Paul for $1 — provided he can find financing for its redevelopment.

Meeting as the St. Paul Housing and Redevelopment Authority, the St. Paul City Council approved the sale on Wednesday, as well as the transfer of $1.29 million in tax increment financing funds to help support the $7 million project.

BETTER FUTURE AHEAD?

The sale all but cements a better future for one of the last unclaimed pieces of the century-old Jacob Schmidt Brewery, once one of the largest employers in St. Paul.

The last effort to brew alcohol there dried up in 2002, and a short-lived attempt to run an ethanol plant within the brewery was shuttered in 2004.

A decade later, artists moved in. In 2014, Dominium — a developer of affordable housing geared toward artists and “creative” workers — debuted 247 units of income-restricted apartments in the Bottlehouse and Brewhouse, two iconic buildings on the massive brewery campus.

For the empty Rathskeller building, the sale has been years in the making. The Fort Road Federation, a neighborhood-based non-profit development company, acquired the Rathskeller building for redevelopment in 2011. The city’s HRA at the time provided $1.9 million to the Federation to buy it and the adjacent Keg House property.

The Federation then sold the Keg House property to Schmidt Keg House Holdings in 2014 for $550,000, and the proceeds were deposited into an escrow fund to be used toward the building’s redevelopment. In recent years, the Federation has used the funds to replace the building’s roof and removed lead-based paint, asbestos and polluted soils.

Roughly $2 million of city, HRA, Met Council, and state Department of Employment and Economic Development funds have already gone into the development. The Federation returned the Rathskeller building to the HRA in 2015 to reduce holding costs, but remained involved in maintenance and pre-development work.

In December 2015, the HRA Board expanded a nearby tax increment financing district associated with the Koch-Mobil site by the future Victoria Park.

The district, which effectively borrows money from future tax proceeds generated within its own borders to fund site improvements, produced $1.4 million in a “pay-as-you-go” TIF loan to the Federation.

The Federation spent years looking for commercial tenants to move into the building, which has multiple vacant offices above the basement of the Rathskeller building. In stepped Cohen, the managing partner of Rathskeller Renaissance LLC, who had previously acquired and renovated three buildings along West Seventh Street.

Cohen, who is renovating the Schmidt Brewery’s old Keg House across Webster Street into the Keg and Case Market, said the marketplace is fully pre-leased.

The Keg and Case Market will welcome its first customers in the spring of 2018, he said.

“We have 32 stalls for smaller vendors, and some of those stalls could even have multiple vendors within stalls,” Cohen said.

Among his larger, anchor tenants, he’s envisioning two sit-down restaurants, a coffee shop called 5 Watt Coffee and Sweet Science Ice Cream.

The historic Rathskeller office building spans three levels, including the basement and a plaza-like patio between the old Bottlehouse and Brewhouse buildings.

He hopes to move tenants whom he could not situate in the Keg House into the Rathskeller building, including a German restaurant in the basement beer hall and a European-style cafe in the courtyard. Construction could start within the year, he said.

The basement Rathskeller has great historic features, Cohen said.

“It’s pretty spectacular,” he said. “The best use of the space would be for a restaurant, and ideally a German beer hall-style restaurant.”

The Federation isn’t going far, either. They’ll be relocating their offices to the Rathskeller and will continue hosting the annual German Fest throughout the historic brewery. Related Articles Beer will once again flow from the site of the historic Schmidt brewery

St. Paul’s Schmidt Brewery gets funds for upgrades

On Wednesday, the HRA agreed to terminate the development agreement, including tax increment financing (TIF) assistance, with the Federation and transfer it to Cohen’s partnership. Before closing, the property transfer requires that Cohen secure all the necessary financing.

Cohen’s business venture will effectively inherit $1.29 million in TIF funds, intended to help close the gap in financing for what’s projected to be a $7 million redevelopment project. Commercial loans, historic tax credits and development fees are expected to make up most of the difference.

According to a report from city planning staff, “no TIF proceeds will be disbursed until the project has been completed and all TIF-eligible costs have been certified.”