by Jack Hoeschler, 2018

What is now known as the St. Paul Hotel had its humble beginnings in 1856 as the private home of one John Summers who invited visitors to stay.  Eventually, the Summers’ residence became the Greenman House, a real 60-room hotel finished in 1871.  It burned down in 1878.

Summers then teamed up with John Baugh, an Eastern hotelier, to build a larger and more modern hotel which they named, The Windsor.  It continued in operation until 1880, when ownership shifted to a Charles J. Monfort, who managed it until 1904.

For a couple of years, the hotel was converted to an arcade and theater. In 1908 Lucius P. Ordway acquired the property to build a new luxury hotel.

By the 1970’s, hotels like the St. Paul had lost patronage to chain motels near airports and Interstate highways. Hotels remodeled in the 1950’s now looked antiquated.

Robert E. Short, bought and tried to redevelop the Hotel Leamington in Mineapolis and thought he could do the same with the St Paul Hotel. People had memories of the Golden Age of F. Scott Fitzgerald and the grand hotel ballroom parties, but in reality, the hotel’s false ballroom ceiling and detailing was substandard.  After all, the place was an old railroad hotel. Its rooms were small in terms by then current market standards.  Short’s vision didn’t materialize.

In 1979, Clarence Frame was a vice-president of the First National Bank, which had foreclosed its mortgage on the hotel. David Lilly, Dean of the University of Minnesota Business School and former CEO of Toro, called me to discuss what to do with the historic building. In 1982 he and friends, Gilman Ordway, Sally Ordway Irvine and Betty Musser, had been approached by Clarence Frame to act as investors in a redevelopment idea.

Clarence also attracted from St. Paul’s North End, a practical-minded developer with whom the investors were unfamiliar.  David Lilly, meanwhile, wanted me to act as the investors’ representative to help the project forward.

The goal was to use small-issue tax exempt revenue bonds, but this financing source restricted overall expenditures to $10 million.  If the project ran as little as a $1.00 over budget, the tax exempt status of the bonds would be lost.  

The first step was to hire an architect.  We received bids from firms in Chicago, New York, and Boston, but the best proposal came from Ben Thompson, a St. Paul architect. His father had been the President of First National Bank and his uncle was a prominent gentleman farmer of thousands of acres in southern Minnesota.

After attending boarding school, Ben went to Yale’s School of Architecture.  Following four years in the Navy during WWII, he landed in Boston.  In 1946, Ben and six friends from Yale persuaded Walter Gropius, a late disciple of the Bauhaus design in Germany and then on the faculty at the Harvard Graduate School of Design, to form The Architects' Collaborative (TAC) in Cambridge, Massachusetts.

In 1953, Ben founded Design Research International, which was the first U.S. importer and retailer of clothing and textiles produced by the Finnish firm, Marimekko. He built a five-story, avant-garde, all-glass structure to showcase modern home furnishings sold by Ben’s new company. Crate & Barrel now occupies the building in Cambridge.

Ben was a marketing genius, but a notoriously difficult collaborator.  He disregarded budget limits when he thought it was necessary, especially in the case of the St. Paul Hotel project. Our no-frills developer had different ideas. For example, he took one look at Ben’s design for a marble front desk and urged Formica instead.   The investors perceived the developer as a Philistine of the worst order.

By default I became the marriage counselor between the developer, on the one side, and the investors and Ben, on the other. Ben, of course, didn’t care that the developer opposed extravagance—surely Ben’s investor friends could foot the bill.

In the course of things, I told David Lilly that our arrangement wasn’t working. It seemed that the developer role would have to be assumed from our appointed fellow,  but I couldn’t do so without David’s involvement.  The other investors knew nothing about this.  David refused, however, because he was about to become the Financial Vice President of the University; we had to enlist someone else as developer .

Meanwhile, the St. Anthony Main project in Minneapolis was underway, initiated by Bob Boisclair, and subsequently run by Louis Zelle. The architect of the project was . . .  Ben Thompson.  St. Anthony Main was a festival market place, developed in the 1970’s with Ben as the idea man.  It was a hot property.

Louis fired Ben however, because of cost overruns. David Lilly went to Louis and asked him to take over the St. Paul Hotel if the existing investors would just walk away. 

Louis agreed.  He promptly fired Ben Thompson from the hotel project and hired the Hammel Green & Abrahamson firm, which designed a fabulous, high-end luxury hotel.  But they made one big error. 

They located the high-end restaurant in the basement. Moreover, lighting, furnishings—even voices—were soft and quiet. The ambience was so intimate, everyone felt they were dining alone.  The restaurant died because people wanted “noisy” and “crowded,” which signaled “a happening place.” Accordingly, the St. Paul Grill was created—and on the first level.

When Louis took over financially, the original investors exited—each leaving a substantial outlay behind. And my services were no longer needed. . .

In ensuing years, however, Louis lost money on the hotel too, so he sold it to the Saint Paul Companies, which by then had merged with Travelers. Travelers eventually sold the hotel to the establishment’s longtime manager and the hotel became a success. 

Such a progression is typical in real estate.  The first and second owners/investors lose money; even go bankrupt. A third owner then buys in at a low enough price to make money on the project.